Labor’s China-Australia Free Trade Agreement Safeguards

Labor will seek to amend the Migration Act 1958 to introduce safeguards around the China-Australia Free Trade Agreement’s provisions on temporary skilled migration.

The safeguards will deal with three areas of concern over the China-Australia Free Trade Agreement (ChAFTA) negotiated by the Coalition Government.

Investment Facilitation Arrangement: ChAFTA includes an Investment Facilitation Arrangement (IFA) Memorandum of Understanding which allows special migration agreements to be negotiated for Chinese-funded infrastructure projects worth $150 million or more. The IFA MOU does not guarantee that the Australian Government will require employers on these projects to advertise the jobs to local workers before they turn to overseas workers.

Movement of Natural Persons: ChAFTA’s Movement of Natural Persons chapter provides that Australia will allow certain categories of Chinese workers to enter Australia with no labour market testing – no requirement for sponsoring employers to advertise the jobs to local workers. The categories which are of concern are contractual service suppliers and installers and servicers.

Mandatory Skills Assessments: The Coalition Government has agreed as part of ChAFTA to remove mandatory skills assessments for a range of Chinese trades workers including electricians, mechanics, carpenters and joiners.

These safeguards are complementary to ChAFTA – they will not require renegotiation of the Free Trade Agreement.

This means that ChAFTA can enter into force at the earliest opportunity, allowing Australia’s exporters to realise the benefits of the agreement while also ensuring local jobs are supported.

Investment Facilitation Arrangement

Labor will amend the Migration Act to include new provisions setting out safeguards for work agreements, including work agreements under ChAFTA’s Investment Facilitation Arrangement.

Work agreements are negotiated between the Immigration Minister and employers and allow the use of 457 visa workers. The requirements and processes for work agreements are currently largely a matter of Ministerial discretion and are set out in Departmental guidelines and policy rather than in legislation or regulation. Labor’s new provisions will set out legislated safeguards for these agreements, reflecting the fundamental premise of the 457 program – that it is for addressing skills shortages, where employers cannot find local workers, rather than for bypassing local workers.

The safeguards will require employers under work agreements to carry out labour market testing – which requires advertising the jobs for local workers before turning to 457 workers. 

Employers under work agreements will also have to ensure that the base rate of pay for 457 visa workers is higher than the Temporary Skilled Migration Income Threshold.

The safeguards will also require the Minister, in deciding whether to enter work agreements, to consider whether: 

  • the agreement will support existing jobs or help create new jobs for Australian citizens or permanent residents (Australian jobs test);
  • the employer has shown there is a labour market need to use overseas workers;
  • the employer has adopted a training plan setting out how it will train local workers to address skills shortages;
  • the overseas workers will have appropriate qualifications, knowledge and experience to be able to transfer skills to local workers; and
  • the employer has adopted an overseas worker support plan showing how it will provide its 457 workers with workplace induction programs, information on workplace entitlements and rights, contact details for trade unions, migrant assistance organisations and occupational health and safety regulators, and information on health, emergency, community and welfare services.

The Minister will also be given the power to impose additional conditions in work agreements. These may include requirements for minimum numbers of local workers to be employed and ceilings on the number of overseas workers to be employed.

Movement of Natural Persons

Labor’s amendments will make a number of changes to the Temporary Skilled Migration Income Threshold (TSMIT) to ensure that the 457 program remains focussed on skilled workers, to protect overseas workers from exploitation and to maintain Australian wages and conditions.

The TSMIT is the minimum base salary which must be paid to 457 visa workers. It is designed to ensure the temporary migration system is used for genuinely skilled jobs, not for entry-level positions or relatively less-skilled workers.

The TSMIT is currently $53,900 and is set by the Minister for Immigration through a legislative instrument made under the Migration Regulations 1994. Under the former Labor Government, the TSMIT was indexed annually in line with wages growth to ensure it remained an effective safeguard. The Coalition Government has not indexed the TSMIT since it came to office in 2013.

Labor’s amendments will: 

  • increase the TSMIT to $57,000 (indexing it for growth in average wages over the last two years);
  • provide for the TSMIT to be automatically indexed in the future to movements in Average Weekly Ordinary Time Earnings; and
  • set the TSMIT directly in the Act.

Labor’s changes to the TSMIT will help ensure ChAFTA’s Movement of Natural Persons provisions covering contractual service suppliers are not used to undermine the focus of the 457 program on skilled workers and local skills shortages. They will also ensure that overseas workers have enough income to support themselves and their dependents while they are in Australia.

Labor’s safeguards will provide the Minister with flexibility to tailor work agreements and TSMIT requirements to the needs of individual industries. They will not disrupt existing arrangements in sectors such as meat processing or tourism.

Mandatory Skills Assessments

The Coalition Government has exchanged side letters with the Chinese Government under ChAFTA agreeing to remove mandatory skills assessments for a range of Chinese  trades workers including electricians, mechanics, carpenters and joiners.

Labor’s changes will ensure that 457 visa workers in trades occupations are still required to obtain the relevant occupational or trades licences needed to work in these trades under State or Territory regulation.

A new criterion will be added to the existing “primary criteria” for 457 visa applicants.

Under this new criterion, people applying for 457 visas in occupations where licences or registrations are required in Australia will need either to hold the relevant occupational licence or to show the Immigration Department that they have the skills and experience required to obtain the licence.

Labor will also add new conditions to existing 457 visa conditions for overseas workers (visa condition 8107). 

These new conditions will require visa holders in licenced occupations: 

  • not to perform the occupation until they obtain a licence;
  • to obtain the licence within 60 days of arriving in Australia;
  • to provide the Department with a copy of the licence;
  • to comply with any conditions imposed on the licence;
  • not to engage in work that is inconsistent with the licence; and
  • to notify the Department of any changes to their licence or to any conditions imposed on the licence. 

These new criteria and conditions will create incentives for 457 visa workers and their sponsoring employers to obtain the relevant licences as quickly as possible. They will tackle the concern raised in submissions to the Joint Standing Committee on Treaties inquiry into ChAFTA that removing mandatory skills assessments as part of the 457 visa application process could see overseas workers being employed as unlicenced electricians and other trades.

The new visa conditions will also improve the ability of the Immigration Department to monitor compliance with occupational licencing requirements and to coordinate its compliance activities with State and Territory occupational licencing regulators. This responds to the Business Council of Australia’s submission to the JSCOT inquiry which said:

“The government will need to continue to coordinate closely to ensure systems at Commonwealth and state and territory levels are aligned. On the skills assessment requirements in particular, the authorities should coordinate closely to ensure all visa holders in categories exempted from automatic skills testing meet all licencing requirements by regulatory authorities before working in Australia.” (BCA submission, page 21).

Breaches of these visa conditions would be a serious matter and would provide grounds for a visa to be cancelled and for sanctions to be imposed on the sponsoring employer.

Labor's China FTA Safeguards – At A Glance



Further details


Labour market testing

Support Australian jobs

Employers seeking work agreements (which allow employers to use overseas workers) must show they have attempted to find local workers before turning to overseas workers.

Australian jobs test

Support Australian jobs

Immigration Minister must consider whether work agreements will support or create local jobs

Labour market need

Genuine need to use overseas workers

Employers seeking work agreements must show they have a labour market need for overseas workers.

Training plans

Train local workers

Employers with work agreements must adopt training plans showing they will train local workers to address skills shortages.

Skills transfer requirement

Train local workers

Immigration Minister must consider whether overseas workers under work agreements will be able to transfer their skills to local workers.

Overseas worker support plans

Tackle exploitation of overseas workers

Employers with work agreements to adopt overseas worker support plans showing how they will support 457 visa workers including by providing information about workplace entitlements and access to local community and government services.

Additional conditions

Support Australian jobs

Minister may impose additional conditions on work agreements including minimum number of local workers to be engaged and ceiling on number of overseas workers to be engaged.


Support Australian jobs

Minister to publish register of work agreements and report to Parliament on impact of work agreements.


Increase minimum base rate of pay for 457 visa workers to $57,000

Support Australian wages and conditions

Increase Temporary Skilled Migration Income Threshold from $53,900 to $57,000, restoring two years of indexation increases not passed on by Coalition. Index TSMIT to wages growth. Flexibility for Minister to tailor TSMIT to circumstances of specific industries.


Overseas trades workers to show Immigration Department they can meet trades licencing requirements when applying for visa.

Maintain skills and safety standards.

New visa criterion for 457 visa applicants will provide that in occupations where a licence or registration is required, the applicant must obtain the licence or show the Immigration Department they meet the requirements for obtaining a licence before being granted a visa.

Overseas trades workers to obtain Australian trades licence within 60 days of arriving and not to work until they obtain licence.

Maintain skills and safety standards.

New visa conditions will apply to 457 visas providing that in occupations where a licence or registration is required, the visa holder must not work until they have obtained the license, must obtain the licence within 60 days of arriving in Australia, must not engage in work inconsistent with the license, and must notify the Department of any changes to their licence including any conditions on the licence.


You can access a printable PDF version of this fact sheet by clicking here. You can access a printable PDF version of the At A Glance table here as well. The exposure draft amendments can be accessed here and the exposure draft explanatory note can also be accessed here.