Daniel Wild Discussing Australia’s Worker Shortage Crisis on 6PR Mornings

On April 27, IPA Deputy Executive Director Daniel Wild discussed IPA research on Australia’s worker shortage crisis and the government’s migration review on 6PR Perth Mornings with Gary Adshead.

Below is a transcript of the interview.

Gary Adshead:

In 20 minutes’ time, the Home Affairs Minister Clare O’Neil will tell us why Australia’s migration programs need a massive overhaul. She’s got in her hands a 190 page report, which is a review. There’s a lot of reviews going on, aren’t there? Crikey. Since this government’s come in, review, review, review. Anyway, there’s a new review that’s going to be released today, which looks at the issue of migration.

And of course, the problem that we have fundamentally here is a lack of workforce. More specifically a lack of skilled workforce to do the sort of jobs that we need to be done, and whether it be people to build the houses that we desperately need because of the homelessness issues. So they’re going to talk about overhauling Visa systems and everything to make it more palatable for people coming here to stay and the ability to stay and to work more. But, and here’s the but, should the federal government be looking closer to home before they start looking overseas? Are there issues that perhaps could be sorted out here in Australia before they go overseas? Here’s a little bit of the Prime Minister Anthony Albanese, who’s been speaking today ahead of the release of this report. Have a listen.

Prime Minister Anthony Albanese:

The truth is that the migration system that we inherited was broken. There are over a million people waiting for Visas in this country. What we need to do is to make sure that we identify the skills we need, identify the regions where we need additional workforce, and tailor our migration system so that it benefits those people who come to Australia, but more importantly as well, so that it benefits our national interests.

Gary Adshead:

All right. Now the Institute of Public Affairs is saying that this report and this review misses an obvious opportunity that’s right here in Australia. Let’s talk about it with Daniel Wild, the Deputy Executive Director of the Institute of Public Affairs, who joins me now. Thanks for your time, Daniel.

Daniel Wild:

Good morning. Nice to be with you.

Gary Adshead:

This is something we have talked about and that is getting people who have retired back in the workforce. Just explain your theory now.

Daniel Wild:

Well, that’s right. We have a worker shortage. There’s no doubt about it. Across Western Australia, for example, there’s around 50,000 job vacancies. That’s double what it was pre Covid. And about one in five businesses across WA can’t get the workers that they need. So if you are walking down your local shops and you’re going past cafes, chemists, butchers, supermarkets, one in every five of those shops that you walk past cannot find the workers that they need. There’s a big issue here, but the solution is right in front of us. We have pensioners, veterans and students who want to get back into the workforce but aren’t doing so because of the very unfair tax and red tape barriers on doing so.

For example, if you’re a pensioner and you earn just $226 a week, you then start losing 50 cents on the dollar. That’s about one and a half days a week, and then you get taxed at 50 cents on the dollar through lost pension payments. That’s why here in Western Australia and across the country, only about 3% of our pensioners work. In New Zealand where they don’t have these barriers, 25% of their pensioners are in work. So yes, migration can play an important role, it has done so throughout our history and will continue to do so, but we’ve got thousands of pensioners, veterans, and students who want to get back into the workforce. And our perspective is our political leaders need to focus closer to home first rather than looking abroad.

Gary Adshead:

You’re saying that the work bonus rule that changed, I think it was later last year in and around pensioners being able to earn an additional four grand without it affecting their pension. You don’t think that went far enough?

Daniel Wild:

No, it didn’t go far enough. Across Australia, since that reform came in, we’ve seen the worker shortage reduced by just over 1%. So it has not gone far enough. What our political leaders need to do is, again, look at New Zealand where they have removed the loss of welfare payments. So pensioners and veterans should be able to earn as much as they want without losing their welfare payments. Now, of course, they would pay tax on the income that they earn just like every other worker. And what that would mean, of course, is if you are working more, you pay more GST, you pay more income tax, you pay more payroll tax. That revenue then gets reinvested in our schools, roads and hospitals and help pay down the debt. So our perspective is remove the tax and red tape, let as many of the pensioners, veterans, and students work should they choose to do so.

Gary Adshead:

Now, in terms of the considerations that I reckon are going to come out off the back of this migration review, we look at international students that can come here, but they’re restricted in themselves, aren’t they, in terms of how many hours they can work a week? Would you accept that that could be completely waived, or do you think that we need to be, again, looking at those people living in Australia already?

Daniel Wild:

Well, look, it’s a part of the mix. But again, I come back to the point. We’ve got to be looking here in Australia. There’s such a massive opportunity. And the issue that we have, whether it’s in WA or across the country, is we’ve got an acute shortage of housing. For example, I think the average rent across Perth is now $582 a week. I mean, if you’re a student or a part-time worker or a pensioner, you can’t afford that. You just can’t afford the housing. This is having an impact. We’ve also got pressure on our schools and on our hospital system. We need to make sure that governments are adequately developing our economic and social infrastructure before we are bringing in a greater migration intake.

And like I say, if we have people here that are willing and able to work, then we should get them into the workforce, which will not add any extra pressure to our infrastructure, but will provide a very big benefit to them themselves. Because don’t forget, work is such an important source of dignity, of social connection, of community participation, and many of the elderly individuals in our community thrive on those opportunities and the dignity that it provides.

Gary Adshead:

Now, clearly the government would say, “Well, the real area of concern is skilled migrants.” You say that they can work hand in hand, they can do both.

Daniel Wild:

Look, you can do both. There’s a couple of points I’d make here. Look, the first is that we know that the shortage of workers that we’re facing is mostly in the services sector. This is hospitality, accommodation, healthcare, and so forth. What we need to do is rather than having a migration review that’s only focused on the migration component, we need to have a broader review, which asks where are the shortages and who are the individuals that can fill those shortages here in Australia? Now, I accept that not every single pensioner or student who wants to work will be the right fit for the jobs that are there. Once you’ve gone through that list, you then say, “Okay, we have this many jobs left over. Let’s focus our migration intake on filling those jobs.”

But the first priority is to find out what are the skills that Australians have? How can we match those Australians into the jobs that are there? Secondly, if they don’t have the right skills, how can we train our workforce to get those skills? And then thirdly, if we can’t do it through those first two mechanisms, then we look to migration.

Gary Adshead:

All right. Thank you very much for sharing those ideas with us. Appreciate it, Daniel.

Daniel Wild:

My pleasure. Thank you.

Gary Adshead:

Daniel Wild there. He’s from the Institute of Public Affairs, the Deputy Executive Director. It’s over to you. Are you someone who has retired recently or some years ago and you think to yourself, if I wasn’t going to get a hit on my pension, I would get into the workforce again if it wasn’t going to have an impact on me? And I know that I did point out that there was obviously some concerns around all this because it was only last year that the labor government federally did make the change to allow aged pensioners to be able to get another $4,000 per financial year without it affecting their pension. They could go out and earn another 4,000. Should it just be you can go out and earn whatever you can earn? Would you get back into the workforce if that was the case, that there wasn’t restrictions around how many hours you would work or how many days you would work before it would start to impact on your pension? Let us know the answer.

He’s right about that to New Zealand experiment where they’ve decided to heck with it. We just need workers right now, so we’re just going to free up pensioners to not even have to think about how it might impact their pension. We’ll pay them their pension. We’ll get them out there in the workforce.

This transcript with Daniel Wild talking on 6PR from 27 April 2023 has been edited for clarity.