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Australia – Agreement to open door to Indonesian workers

21 November 2012

Unskilled Indonesian workers who speak little English could be used to fill labour shortages in Australia under a trade, investment and economic co-operation agreement negotiated between business groups from the two countries.

According to the daily Australian newspaper the Financial Review, the plan under discussion should allow short-term migrant workers with limited English skills should be allowed to enter Australia if they are accompanied by a skilled Indonesian supervisor. The approach is modelled on a scheme used in New Zealand to recruit farm workers from the Pacific Islands.

The agreement says that labour shortages in parts of Australia are undermining economic growth and Indonesia’s youthful population could provide a “dynamic workforce”.

The proposal for a guest worker program is likely to be highly controversial, especially among unions, and illustrates the practical difficulty of establishing the closer economic integration with Asia advocated by the government’s ‘Australia in the Asian Century’ white paper.

The Australian Chamber of Commerce and Industry, the Indonesian Chamber of Commerce and Industry, the Indonesia Australia Business Council and the Australia Indonesia Business Council have agreed to the 100-page paper. It makes detailed proposals about how to improve economic links, a tactic designed to speed up negotiations between the nations’ trade ministers.

Two-way trade between Australia and Indonesia was worth about AUD14.8 billion in 2011. Forecasts say that Indonesia’s economy will overtake Australia’s economy at market exchange rates within a decade. Both countries concede economic ties have been underdone.

Indonesian government officials have previously stressed that they want Indonesian workers to have access to Australia to help find jobs for their huge population and to improve the skills of Indonesians who would then return after working in Australia. In return, Australian professionals would have easier access to Indonesian jobs.

Australian officials and business people understand they will have to make concessions such as in labour movement to overcome public concerns.

“Reasonable restrictions and limitations will need to form part of this policy for ensuring security and integrity of the policy, however, free and fair movement of skilled persons should be the ultimate goal,” the report says. Other recommendations include reductions in trade restrictions, abolition of all foreign investment restrictions and harmonised health and safety standards.

The business groups say their agreement on many sensitive issues should help the governments negotiate faster than usual. They are hopeful of a deal by 2014.

Barriers to two-way people movement would be removed in agriculture, food processing, agriculture training, standard setting, mining, engineering, environmental management and skills development in mining, energy, engineering and the environment.

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