Australian immigration needed to deal with future skills shortages

A new report suggests that there could be a skills shortfall in Australia equivalent to 1.4 million workers by 2025. The report recommends increasing levels of immigration and raising the retirement age to deal with future skills shortages.

The Workplace Futures report at the Victoria Summit in Melbourne on 17 November 2009 had the following to say:

  • Federal and State Governments should take steps to make it possible to recruit older workers and people from disadvantaged groups.

  • There is likely to be strong population growth due to a high birth rate and immigration to Australia. However, the ageing population will mean that there will be an overall reduction in the number of people in work in Australia. Labour shortages are likely to be worse than between 2006 and 2008.

  • The predicted labour shortage just in the State of Victoria by 2025 is likely to be 440,000 workers. This is based on current retirement and migration rates.

  • Darin Ritchie one of the authors of the report states that based on current workforce trends the participation rate nationally in 2025 will go down from 65.2 percent to 61.8 percent. He went on to say that "To meet moderate levels of labour-demand growth, Australia's participation rate would need to be 68 per cent."

"To address this workforce deficit, Australia needs to raise the average retirement age, increase the workforce participation of disadvantaged groups, increase migration, or offset labour demand through productivity growth."

The Australian Bureau of Statistics forecasts population growth of 1.6 per cent, jobs growth of 1.9 per cent, and an unemployment rate at 4.5 per cent. The report says that "The prominence of demographic change and skill shortages has recently been overtaken by the economic downturn of the last 12 months." "With unemployment increasing over that period, it would be easy to assume we no longer have a labour or skills shortage problem. However, skills shortages still exist in many industries, and the reality of Australia's ageing workforce means we face a structural deficit of workers over the next 15 years."

The report by the Victorian Employers Chamber of Commerce and Industry was based on three months of interviews with representatives of government, business, education institutions and unions. The report recommends that the Victorian government raises or eliminates the workers compensation age limit and that they should consider employing overseas students to meet current and future skills and labour needs.