Willing workers are a priority

A fall in the unemployment rate to 4.2 per cent in December, its lowest level since the global financial crisis in 2008, adds a new dimension to the pre-election positioning of both major parties. For the government, the lower jobless figures underpin its claim to a strong economic bounce-back from the pandemic and for the need to encourage a new wave of students and migrants to come to Australia to provide workers for unfilled jobs. On the other hand, a sustained fall in unemployment and pressure on wages from supply shortages will add to pressure on the Reserve Bank to bring forward its move to lift interest rates from emergency levels to ward off inflation. For Anthony Albanese, the lower-than-expected unemployment rate punctures a carefully cultivated narrative that jobs and skills training should be given to Australians, not foreign imports.

The latest unemployment figures released by the Australian Bureau of Statistics show how tight the labour market is. The number of employed persons rose by 64,800 and the underemployment rate fell 1.9 per cent to 6.6 per cent. Mr Albanese outlined the ALP case for employment in an opinion article on Monday. After completing a week-long trip through Queensland, the Opposition Leader said the lesson was clear that Australia is too reliant on overseas workers and labour shortages are acting as a handbrake on Australia’s economic recovery. “The tourists are starting to return and the businesses are ambitious to get back to work. But many can’t find enough staff to operate at full capacity, even without the absenteeism caused by the Omicron variant,” Mr Albanese said. He said the pandemic had “magnified” Australia’s problems with skill shortages in industries such as nursing, aged care, science and engineering, and the long-term solution was to train more Australians to meet our labour needs.

The Prime Minister wants foreign students and backpackers to help fill shortages in the health, aged care, agriculture, retail, hospitality, food and transport sectors. Working holiday-makers will be eligible for a $630 rebate on their visa if they arrive in the next 12 weeks, while students can get a $495 refund if they arrive in the next eight weeks. The Prime Minister’s decision to waive visa fees for the two classes of migrants is aimed at encouraging 175,000 workers to Australia before the election due by May. Mr Morrison is attempting to engineer a return to the situation that existed pre-pandemic, as well as to sharpen the contest with Labor.

It is easy to agree with Mr Albanese’s sentiment that skilled jobs should go to Australians who need them but the labour market and welfare system are more complicated than that. The hard reality for Labor is that overseas workers are needed most for jobs that Australians have shown themselves unwilling to take. Attracting seasonal workers from the Pacific Islands is critical for the agriculture sector and an extremely valuable part of the nation’s broader regional interests. The reverse side of bringing skilled workers to Australia is the fact that highly skilled Australians routinely head off overseas to build their careers, often returning home to make a bigger contribution than would otherwise be the case. There is always room for better training and education to be made available, particularly if it has an industry focus that provides workers that companies want to hire. The more difficult domestic challenge is to encourage people out of long-term welfare dependency and into the workforce.

Business groups support both approaches. They want a return of foreign workers, backpackers and students, and are calling on government to tackle welfare as well, pointing to the more than 200,000 Australians who entered the welfare system during the first round of Covid-19 lockdowns and remain reliant on taxpayer support.

Debate over how best to respond to skills shortages and an absence of willing workers holding back business is further complicated by the current spike in infections of Covid-19, which has forced many people into isolation. Mr Morrison conceded the limits to commonwealth powers on this issue following the national cabinet meeting on Thursday. State and commonwealth leaders agreed there would be no change to the seven-day isolation requirement for close contacts. Mr Morrison also announced a decision to retain current arrangements for close contacts in essential workforces, opting to not expand the list of essential industries. The bigger picture is that the Covid emergency will pass, and when it does the need for workers will still be greater than ever.