Australia plans migration reboot to address looming worker shortages

SYDNEY – Australia is considering a push to accept large waves of migrants as its borders reopen, with the federal government facing pressure to bring back skilled workers and address the nation’s low population growth.

The sudden closures of its international borders last year brought a swift end to Australia’s migration programme, which previously involved granting up to 160,000 permanent visas each year. For the first time since the Second World War, Australia experienced a net outflow of migrants as large numbers of students and workers left without being replaced. The total migrant outflow came to about 97,000 people last year, with a further outflow of 77,400 expected this year.

This loss of migrants has left businesses desperate to fill jobs as the economy reboots. Official data showed the population in the year to March grew by 35,700 people – or about 0.1 per cent – to 25.7 million people, compared with a pre-pandemic average increase of 1.4 per cent a year.

The Australian Chamber of Commerce and Industry has called for the skilled migrant intake to be lifted to 200,000 a year to ensure that the country avoids shortages of labour and expertise. Australia granted 140,000 permanent visas in 2019-20, of which 95,843 were skilled visas and the remainder were mainly family visas.

The chamber’s chief executive, Mr Andrew McKellar, said the current lack of migrants had led to dire skill shortages and “crippled businesses across the country”.

“From construction workers to chefs, engineers to educators, and mechanics to managers, approximately one in three skilled occupations could be facing shortages if we don’t shift the dial on migration soon,” he wrote in the Australian Financial Review.

“Despite this challenge, the pandemic has provided us with a unique opportunity to reset permanent skilled migration.”

Australia is now starting to reopen its borders as its vaccination rate climbs. Earlier this week, fully vaccinated New Zealanders were allowed to enter without needing to be quarantined. Vaccinated visitors from Singapore will likewise be allowed from Nov 21. Travel is restricted to states, such as New South Wales and Victoria, which have agreed to the new arrangements.

The reopening has added to calls for Australia to reboot its migration programme.

Infrastructure Australia, a government advisory body, has predicted there will be a shortage of 105,000 workers by mid-2023 who will be crucial to ensuring that Australia can achieve its big-spending infrastructure building projects.

The NSW premier, Mr Dominic Perrottet, has also called for a boost to skilled migration as the state reopens, saying he “believes in a big NSW”. Officials in the state have reportedly advised the premier that Australia should bring in two million people over the next five years to strengthen the economy.

The federal government has signalled it supports a quick resumption of the migration programme.

The treasurer, Mr Josh Frydenberg, said last month that low population growth will have an impact upon the economy,including the ageing population and other demographics.

“These are obviously issues that I’m thinking through and the Government is thinking through, both in terms of the size and the composition of our migration programme,” he said.

Despite the border closures, Australia still accepted 160,000 permanent migrants last year after granting visas to large numbers of temporary visa holders and other applicants who were already in the country. Of these permanent migrants, about 22,000 each came from mainland China and India. The next highest source countries were the United Kingdom, Philippines and Vietnam.

The plans for a migration boost have raised perennial concerns that an influx could dampen wage growth and lead to further congestion and housing pressures.

But others are warning that Australia may struggle to attract migrants as it competes with other nations such as Canada that have already flagged big new intakes.

Demographer Liz Allen, from the Australian National University, said Australia’s “lack of goodwill” towards temporary migrants during the pandemic – including denying them financial support – may affect attitudes of potential migrants. In addition, she said, diplomatic tensions with China and the impact of Covid-19 in India will affect migrant flows from Australia’s two largest source countries.

“Australia needs to reset after the devastating economic and demographic impacts of Covid,” Dr Allen wrote in The Sydney Morning Herald. “But I don’t anticipate immigration increases will occur in the near future, not for want of trying on Australia’s part but because it has lost its sparkle.”

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