With unemployment at a 33-year low and many businesses anxious to fill specialist vacancies, the Labor government announced an additional 6,000 places for its skilled migration programme this year, bringing the total number of visas to 108,500.

Immigration and Citizenship Minister Chris Evans said the move was crucial to Australia's economic future.

'Employment-sponsored visas are the highest priority because they put a migrant worker directly into a skilled job,' he explained.

The government also intends to increase the number of visas under its working holiday programme, which attracts young backpackers from Commonwealth countries for work in the catering and fruit-picking industries.

Mr Evans said the package could provide thousands of additional workers in the short term and help ease inflationary pressures, and expected the tourism and primary industry sectors particularly to benefit from it.

Australia has been growing at more than 4 per cent annually, and is facing a huge shortage of skilled labour, pushing up wages and stoking inflationary pressures.

Rising prices fuelled by the country's buoyant economy have forced Canberra to raise interest rates recently to curb inflation.

Mr Evans said he would set up an external group comprising industry experts to monitor the effectiveness of the skilled migration programme. The group would submit a final report in April.

The temporary work visa system, also known as the 'subclass 457 visa programme', has not been without its shortcomings.

Some foreign workers under the programme have found themselves working in sub-standard conditions for below union pay rates. Reports of exploitation of workers have also poured in.

But, even if the 457 visa does not guarantee permanent residency, many foreign workers who hope to stay in Australia for the long term see it as an opportunity to gain a foothold on Australian soil, and hence are willing to take greater risks.

The latest move is designed to put the skilled migration programme on a sounder footing, the government says.

rogmaynard@compuserve.com