26 May 2016
Prime Minister Turnbull announced the Australia-Singapore ‘Comprehensive Strategic Partnership’ (CSP) on 6 May last, just a few days before he called the 2 July election.
Cynics will suspect the timing and also see the Singapore announcement as something of a consolation prize. The much bigger FTA fish for the Turnbull government was the elusive agreement with India. This was originally promised by the end of 2015 but Special Trade Envoy Mr Robb this week said only that a deal is now possible around mid-2016.
With the CSP announcement, Mr Turnbull can now claim a second FTA on top of the Trans Pacific Partnership (TPP) to match the three North Asian FTAs of his predecessor Mr Abbott. As the Turnbull government’s FTA ‘success’ is trumpeted as a key part of its re-election campaign, this ticks the public relations box.
There are three significant Australian immigration commitments in the Australia-Singapore CSP that probably signal what is coming in the much larger India agreement.
1 Australia’s commitments to ‘waive’ labour market testing (LMT) in the 457 and the 400 visa program
Labour market testing (LMT) means employers have a legal obligation to look for suitably qualified and experienced Australian citizens and permanent residents, and show that none are available, before employers can access temporary visas for foreign workers.
In the 457 visa program, Australia has committed to ‘waive’ LMT for all Singaporean nationals and all ‘intra-corporate transferees’, ie all other foreign nationals who are employees of Singapore-based businesses transferring to an Australian branch of the Singapore-based business.
This LMT waiver will apply to persons in all 651 occupations on the 457-eligible list, including tradespersons and professionals, and Singaporean students studying in Australia.
In the 400 visa program, Australia has similarly committed to ‘waive’ LMT for all Singaporean nationals visaed as ‘installers and servicers of machinery and equipment’.
Australia has also committed not to apply any numerical caps to the number of visas granted to the above categories covered by the 457 and 400 visa commitments.
The LMT waivers and the commitment to no caps will be binding international obligations which effectively cannot be reversed by future Australian governments.
As with the TPP and the China-Australia Free Trade Agreement (ChAFTA), these irreversible concessions on the 457 and 400 visas were not publicly disclosed by Prime Minister Turnbull in his lengthy media conference on the CSP. Neither were they disclosed by Immigration Minister Dutton in his media release on immigration measures in the CSP package or the DFAT CSP ‘Fact Sheet: Immigration’ posted on DFAT’s website.
As with the TPP, it was Labor’s Senator Penny Wong who extracted the CSP visa information from DFAT officials at Senate Estimates. This included an admission that ‘the outcomes are broadly consistent with our approach on the TPP’.
Singapore makes up only a tiny fraction of the 457 program – just under one per cent. But that is not the point, which is the incremental removal by stealth of Australian Parliament and government control over key aspects of its main temporary migration programs.
2 Work and Holiday visa program
This program will at least be reciprocal, unlike the one-sided ChAFTA program that provided work and holiday 462 visas to 5,000 young Chinese. The Singapore agreement commences with 500 per year on each side, with increased numbers to be negotiated over time.
The official CSP documentation provides a very misleading description of the 462 visa on which the 500 Singaporean nationals will come to Australia. The DFAT CSP Fact Sheet on Immigration says the 462 visa allows visa-holders to ‘undertake short term work and/or study to supplement their holiday and cultural experience’.
This downplays the role of the 462 visa as a work visa. The fact is the 462 visa allows young foreign nationals to work for the entire 12 months stay in Australia. Many do so or work for most of their stay. The only notional work restriction is 6 months with the one employer, but Immigration policy allows many lawful ways around that visa condition which is poorly regulated anyway.
For example, 462 visa holders working not as direct employees but as so-called ‘independent contractors’ or ‘ABN workers’ can lawfully work for the same employer for 12 months straight, provided they do a few days work ‘on paper’ for someone else. This practice is widespread in industries such as construction and contract cleaning. It undercuts wages and conditions of Australian employees, and contributes to visa-holder exploitation and tax evasion by employers and their visa workers.
From November 2015, the Coalition government has also allowed 462 visa holders in ‘Northern Australia’ to work 12 months with same employer in certain sectors: construction, mining, agriculture and tourism, plus aged and disability care. ‘Northern Australia’ includes all of the Northern Territory and those areas of Western Australia and Queensland above the Tropic of Capricorn – and is a prime target for investment under the Australia-Singapore CSP.
A prudent Australian government would place a moratorium on any more Work and Holiday visa agreements with other countries, until this temporary visa program has been thoroughly cleaned up. The abuses of this visa program have been well documented in the media and a Senate inquiry for more than two years. Instead the Turnbull government will probably continue to use the program as a bargaining chip in trade and investment deals.
3 A Pilot Internship Program for Singaporean Students
This immigration measure is a new feature in an Australian FTA package and is potentially a far-reaching one.
The DFAT CSP documentation says ‘a pilot internship program will aim to give 100 Singaporeans studying in Australia more internship opportunities with leading Australian companies’ but gave no more details.
Senator Richard Colbeck, Minister for Tourism and International Education, provided this:
‘Singapore and Australia have agreed a pilot internship program which will aim to give 100 Singaporeans studying in Australia more internship opportunities with leading Australian companies….
‘The agreement also provides opportunities for Singaporean students to gain work experience in Australia.
‘Australia will be seeking to include similar agreements in other trade arrangements to enhance our opportunities to grow international education – further building on the National Strategy for International Education 2025 released last week.’
A pilot program for only 100 Singaporeans in Australia might sound minor. But the Minister’s words imply we can expect something similar for India shortly, with others to follow. Based on overseas student numbers, Australia could be offering India up to 500 additional internships, not just 100.
So far no Turnbull government Minister has explained what the Australian government will actually do to meet the agreed aim of more internship and work experience opportunities in Australia for Singaporeans; or crucially whether the ‘internships’ and ‘work experience in Australia’ will involve paid or unpaid work.
The Turnbull government currently has a problem on its hands with its proposed PaTH ‘internships’ for unemployed young people. Under these arrangements, young people would be paid $4 an hour on top of their social security payment to do an internship placement with a prospective employer.
It could have another problem with these internships for overseas students if the Professional Year Program (PYP), outlined below, is any guide to the Coalition’s intentions.
Senator Colbeck said the internships arrangement will be reciprocal, and ‘more than 700 Australian students will study and undertake internships in Singapore in the first three years of the New Colombo Plan (2014-16).’ The number of Australian students undertaking internships (vs study) in Singapore is not known, nor are the terms and conditions of these Singapore-based ‘internships’ including whether they will be paid or unpaid.
Domestic political considerations in Singapore may influence the scale and nature of these internships for Australian students. As in Australia, there is considerable community concern in Singapore about government policies allowing foreign workers access to the domestic job market.
As one member of the Singapore elite said, ‘It’s your PMETs, the professionals, managers and executives and technical people who worry that foreigners are prepared to come in to work for less pay and they (Singaporeans) are marginalised’ (Ambassador-at-Large Chan Heng Chee, chairman of the Lee Kuan Yew Centre for Innovative Cities, interview with Singapore Prime Minister Lee, 2 August 2015).
Professional Year Program (PYP)
The PYP is an Australian government-endorsed scheme and has operated since 2008 for overseas student graduates from Australian universities who cannot make up sufficient points for a points-tested skilled permanent resident visa. These graduates are granted a 485 temporary visa and do a program of around 44 weeks duration. The PYP fee ranges from around $9,000 to $12,300 per participant.
The program includes an ‘unpaid internship’ of around 12 weeks, for a minimum of around 220-240 hours or so. Given that participants actually pay money to do the PYP, the ‘unpaid internship’ is really an internship that the participant pays for – between $2,500 and $3,400 (based on 12 out of 44 weeks, or 27% of the total PYP fees).
The PYP is currently only available in accounting, IT and engineering. Around 2,000 485 visa-holders undertake the PYP each year, the majority (over 60%) in accounting followed by IT. According to a 2010 survey, around 70% of PYP graduates find professional-level employment, often with the company providing the Internship.
The PYP program is highly contentious because of the 12 weeks ‘unpaid internship’. It will be even more so if the government intends to expand these programs as part of its international education strategy, commencing with Singaporean students and commitments written into international economic agreements. This will set up even more intense competition with Australian graduates for entry-level graduate jobs. Employment outcomes for Australian graduates have been deteriorating. Between 2008 to 2015, the proportion of new bachelor degree graduates in full-time employment 4 months after graduating has fallen from 85% to 67%.
This apparently is exactly the Turnbull government’s plan. One ‘Key theme’ in its National Strategy for International Education 2025 is: ‘employability – to provide greater opportunities for work, integrated learning and internships for international students’.
The Coalition government should have a fight on its hands over its shift in international education provision to more work-based arrangements, with no regard for adverse impacts on Australian graduates. It will have its first fight if it expands ‘internships’ for international students and graduates, especially if they are unpaid as in the PYP.
Bob Kinnaird is Research Associate with The Australian Population Research Institute and was National Research Director CFMEU National Office 2009-14.
An earlier version of this blog was first posted on John Menadue’s blogsite Pearls and Irritations.