Making up for lost immigration

Since the end of the worst of the pandemic, industry groups, companies, small business, service providers and professional bodies have been urging the commonwealth to open the door to skilled immigrants to plug worker shortages. Doing so would boost productivity, economic activity, demand, confidence and taxation revenue. With unemployment falling to 3.4 per cent, such calls have intensified. The OECD has noted that Australia is grappling with the second-worst skills crisis in the developed world. KPMG modelling shows the nation has half a million fewer skilled foreign workers than it did before the pandemic. KPMG chief economist Brendan Rynne says the collapse in net migration over the past two years has left national income $80bn lower than it would have been otherwise.

The NSW Treasury forecasts a shortfall of 304,000 workers in that state alone by 2025-26. Writing on Monday, NSW Treasurer Matt Kean has a point when he says he has heard a lot about the Albanese government’s jobs summit on September 1 and 2. But the sound NSW needs to hear, he says, is “passports being stamped’’. Tens of thousands of skilled workers are waiting to be approved to come to Australia to work, Mr Kean says. In addition to skilled workers, he argues, there is room for a new category of visas for low-skilled staff to address the “worker drought’’. From truck drivers to teachers, engineers to aged-care workers, opportunities for semi-skilled workers as well as professionals are wide open across the economy.

The issue will be top of the list of industry groups at the jobs summit. But it also has its own momentum. That is important, especially after Anthony Albanese sought to lower expectations that the summit would prove as transformative as Bob Hawke’s deal with unions that delivered the prices and income accord of 1983.

The Australian recognises the growth dividend of a bigger Australia. But at this stage, boosting immigration is more about catching up. KPMG analysis of official data shows Australia recorded no increase in skilled migration in 2021-22. A net loss of 12,000 permanent migrants occurred as permanent visa holders left after Covid travel restrictions were lifted. Federal budget papers anticipate it will take until 2024-25 for net migration to return to pre-pandemic levels of 235,000. By then, the net migration deficit would be 600,000, Dr Rynne says, requiring net migration to be boosted to 300,000 a year until 2030 to return to the pre-Covid trajectory. With other nations also seeking workers, the time to act is now.