Boosting workforce would help economic momentum

As new assessments suggest the US economy is already in recession amid the highest inflation (8.6 per cent) and the biggest sell-off in shares and bonds in decades, it is important that Australia continues to capitalise on the strong economic momentum this side of the Pacific. That is why The Australian welcomes Skills Minister Brendan O’Connor’s two-pronged strategy to bring in more skilled workers from overseas to address labour shortages and to improve training in growth sectors of the economy such as blue-collar trades, IT and healthcare. We agree with the Albanese government’s goal to focus on training Australians to fill vacancies, but more immediate action is needed to avoid productive enterprises being held back by a lack of workers. An orderly, post-pandemic program of skilled migration should already be well established, with bipartisan political support. The process needs to be selective in terms of skills, character and language skills.

In February, the Business Council of Australia called for the 160,000-a-year cap on permanent migration to be lifted to 220,000 for the next two years. Australian Bureau of Statistics data, released last week, showed the number of job vacancies reached a ­record 480,000 in May, a rise of 14 per cent since February and more than double pre-pandemic levels of about 225,000. As BCA chief executive Jennifer Westacott says, the nation does not have enough workers to fill the shortages, “hamstringing businesses across the economy, from the local cafe to global investors employing thousands of Australians”.

In an exclusive interview with The Australian on Monday, Mr O’Connor said he did not believe there was a binary choice between training Australians and supporting migrant workers. Both were needed to help the economy grow, he said. While the government, unions and employers will discuss the issue at the jobs summit in September, there is no good reason to delay restoring the nation’s immigration schemes.

The consequences of not doing so are detrimental to the economy at a time it is facing challenges from rising interest rates and inflation. As Ms Westacott pointed out when job vacancy figures were released on Thursday, a shortage of workers “puts a handbrake on businesses (that) want to expand and innovate, boost their productivity and pay sustained higher wages”. The shortages forced customers to face long waits when travelling, diners could not get reservations at their favourite restaurants and services could not be accessed. At the same time, the infrastructure pipeline could not be delivered without engineers, construction jobs could not begin without surveyors. In response to the job vacancy figures, Jim Chalmers said the shortage of farm workers, as well as higher transport and fertiliser costs, were “driving prices up in our supermarkets’’. It was important to deal with labour mobility and labour shortages, the Treasurer said. While detrimental overall, the upside of worker shortages is that economists expect unemployment will fall from its current 3.9 per cent, move closer to 3 per cent and stay at that level into next year. Minimising dole payments will return a fiscal dividend to the budget and taxpayers.

Increasing skilled immigration and improving domestic skills training are both vital. The latest census shows more school leavers are opting for TAFE courses rather than university. That is not necessarily a bad development. Universities need to provide sufficient medical staff, engineers, teachers and other professional graduates, but young people who are better suited to practical training and apprenticeships than to academic study will also find plenty of career opportunities.