Report shows Australia needs more skilled migration

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The Academy of Social Sciences in Australia (ASSA) has released a report stating that Australia's growing labor requirements cannot be met by the native workforce and current levels of immigration.

From 1980 to 2005, the labor supply in Australia grew by 60 percent with the economy centered around the expectation that this labor supply would continue, particularly by younger skilled workers.

However, the major factors in this increase - the full entry of the baby-boomer generation into the workforce and a large increase in female labor force participation rates - will not be significant in the future, according the ASSA study entitled 'Population and Australia's Future Labour Force'.

In fact, by 2006, Australia's labor force growth had fallen to a 1.2 percent per-year average after the previous 1.9 percent annual growth average reported from 1980 to 2005.

The report estimated that with labor force participation rates constant at July 2007 levels and net migration remaining high at 160,000 immigrants per year, labor force growth will still continue to fall to 0.7 percent by 2021 and less than 0.5 percent by 2051.

The study stated that in the next 20 years, the only potential labor force supply sources are increased labor force participation rates and immigration. The Australian government is actively trying to increase workforce participation within the native population but this source is expected to be small compared to Australia's requirements for continued growth.

The "logical conclusion" from the evidence stated in the report is that Australia's future labor requirements will depend on more immigration.

However, Australia is already actively encouraging immigration. Preliminary net migration statistics for June 2007 showed 177,600 people immigrating to Australia, the highest annual level ever recorded.

For labor force growth to be sustained at one percent per year, immigration would have to rise to 227,000 people by 2021 and 316,000 people by 2051.

Population and annual net migration with assumed 1% growth per year, 2006-2051. Source: ASSA
YearPopulation (millions)Annual Net Migration

68 percent of immigrants to Austrlia during 2006-07 came under its General Skilled Migration (GSM) program. A points-based system, the GSM assesses individuals based on age, past-experience, and qualifications.

The GSM, while highly successful, needs to increase its intake, according the study. The report also recommended that the government draft a long-term skills requirements plan with the possibility of bringing in lower-skilled migrants for occupations with emerging shortages, such as the hospitality and transport industries.