Australia to boost migrant intake as labour shortages hurt businesses

Severe labour shortages that began in 2020 have worsened as the economy has recovered. PHOTO: AFP

SYDNEY - Australia is set to lift its intake of migrants to a record 200,000 arrivals a year to try to combat a drastic shortage of workers.

Despite the reopening of borders earlier this year, the severe labour shortages caused by their closures in 2020 have worsened as the economy has recovered.

Australia's unemployment rate is at 3.5 per cent - the lowest level in almost 50 years - and is expected to fall to below 3 per cent. But this welcome sign of the nation's strong economy also reflects a growing scarcity of workers that has forced some businesses to take on less work or even close due to a lack of staff.

To combat the problem, the federal government is reportedly considering lifting the annual migration intake to between 180,000 and 200,000, from the current cap of 160,000. Last year, the largest sources of permanent migrants were China and India - with about 22,000 each - followed by the United Kingdom, the Philippines, Vietnam, the United States and Nepal.

Australia's main workforce shortages are among IT workers, doctors and nurses, and hospitality, trade and manufacturing workers.

The Business Council of Australia has called on the federal government to make it easier and quicker for skilled migrants to be hired and to gain permanent residency.

The council's chief executive, Ms Jennifer Westacott, said authorities needed to quickly address a growing backlog of visa applications because "we simply don't have enough people to do things".

"We need to move from short-term, ad hoc migration to a long-term planned system," she wrote in The Australian Financial Review on Monday.

The shortage of workers has helped to fuel the fastest growth in wages since 2014. Official data released on Wednesday (Aug 17) found wages grew 2.6 per cent in the past year, but this rate is soon expected to exceed 3 per cent.

The Australian Chamber of Commerce and Industry said this week that boosting the migrant intake was crucial to ensuring businesses can meet their current demand. It has supported lifting the intake of permanent skilled migrants to 200,000 a year for at least the next two years.

"As the global race to attract skilled migrants heats up, we cannot risk getting left behind," said the chamber's chief executive, Mr Andrew McKellar.

"Businesses of every size in every sector are reporting significant barriers to getting the skilled workforce they need, forcing them to operate below capacity or close their doors entirely."

The government has not committed to a new migrant target but is expected to discuss the need to lift the cap at its upcoming Jobs and Skills Summit. The summit, to be held on Sept 1 and 2, follows an election campaign commitment by the Prime Minister, Mr Anthony Albanese, who promised to convene a meeting of unions, employers, civil society and state and federal officials to discuss Australia's economic challenges.

Skills and Training Minister, Mr Brendan O'Connor, said he wanted to make it easier for the skills and qualifications of migrants to be recognised. He proposed providing new arrivals with "bridging training" rather than forcing them to study again.

"We do have to be more sophisticated in measuring people's competencies," he told The Sydney Morning Herald.

"Everywhere we look there are shortages: the traditional trades, advanced manufacturing, retail, tourism, the tech industry, aged care, doctors, nurses."

Union leaders have supported moves to bring in migrants, but urged the Government to invest more in skills training to ensure that the country was not using foreign workers as a substitute for educating and training the domestic workforce.

The Treasurer, Dr Jim Chalmers, said last week that the Jobs and Skills Summit would examine improving skills and education, as well as migration.

The new migration levels are expected to be finalised before the Albanese government releases its first budget in October.

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