SKILLS SHORTAGE CONUNDRUM

Article by James Salmon courtesy of the West Australian.

Australia has half a million jobs up for grabs but is finding it near impossible to fill most of them.

JAMES SALMON investigates why the labour crisis crippling the nation – and especially WA – has no easy fix and how COVID is not the only culprit to blame.

It’s planting day on the Rose family’s broccolini farm in Myalup, just north of Bunbury. But Graham Rose and his son Matthew have another pressing matter to attend to. They are hard at work building a 40-man camp to house the seasonal workers from East Timor and Vanuatu who pick their prized brassica.

Ten four-room dongas, bought from a mining site in the Pilbara, are now dotted across one of their paddocks. The hope is that the new camp, which has cost more than $1.5million and comes with a communal kitchen and living area, sewerage system and electric generator, will finally be ready in a month.

“We’re building a mini village,” Graham, 62, said. Like many farmers, the Roses could not find enough workers to pick their crops when the borders were slammed shut. At one stage, about 60 per cent of the broccolini was left to rot in the ground — costing the family farm up to $1m.

But now, with the borders open again and more seasonal workers filtering in from overseas, they are grappling with another major problem. Soaring rent and the lack of affordable accommodation is making it even more difficult for businesses to attract workers, particularly in the regions. Being unable to find affordable places to live for staff is one of the lesser-known factors driving Australia’s skills shortage, thought to be the worst for almost 50 years.

Despite being a global issue, Australia has the second most acute skills shortfall in the developed world after Canada. Singled out by former prime minister Scott Morrison as the “single biggest challenge facing Australia’s economy today” , it is a key element of the economic “s. . . sandwich” inherited by his successor Anthony Albanese.

The end of lockdowns and border closures has spurred on the economy but has also left more businesses crying out for staff. At the same time, having managed to keep COVID at bay for much of the pandemic, the spread of the virus is causing chaos for businesses , with staff regularly calling in sick or forced to isolate at home. The situation is becoming more urgent by the day.

There are now almost a half-amillion jobs up for grabs. This marked a surge of 14 per cent since February, meaning vacancies have more than doubled since before the pandemic.

There were more than 65,000 vacancies in WA, up from 27,600 in February 2020, just before the borders were shut. Every major industry has been hit, from mining companies in the Pilbara, to wineries in Margaret River. Restaurants, shops and cafes have been forced to reduce their opening hours, close down on certain days of the week or close entirely.

There are fears that many who left the hospitality industry are unlikely to return. “Many are now working 9-5 jobs and no weekends, and have decided they don’t want to come back,” Restaurant & Catering Association chief executive Belinda Clarke said.

Meanwhile, miners have blamed the lack of workers, for a fall in iron ore shipments, with a shortage of engineers, drillers, and train and truck drivers. Companies are offering six-figure salaries to mining camp kitchen hands. Chicken Treat offered up to $130,000 for a store manager in South Hedland.

Broome coffee shop The Good Cartel offered barista jobs paying $92,000. A chronic lack of staff in hospitals is also jeopardising our health, leading to long wait times for operations or ambulances.

All this helps explain why Premier Mark McGowan has embarked on a global recruitment drive, taking in Rome, London, Dublin and Doha, before heading to Japan and South Korea later this year.

The WA Government is scrambling to fill more than 500 occupations , ranging from traditional roles such as dentists, engineers and nurses , to more niche occupations like beekeepers, cartographers, deer farmers and horse breeders.

Persuading foreigners to become honorary Sandgropers would be hard enough at the best of times, with stiff competition from the Eastern States and countries around the world all scrambling to attract foreign talent. But after making it clear during the pandemic that outsiders were very much not welcome, some believe Mr McGowan will have his work cut out.

“We effectively kicked a lot of these people out of the country, and now we’re asking them to come back,” The Australia Institute’s chief economist Dr Richard Denniss said. In a sense, Australia has become a victim of its success during the pandemic.

With unemployment of 3.9 per cent — its lowest in almost 50 years, thanks in part to the $89 billion Job-Keeper program there are fewer people looking for jobs.

Shutting the borders insulated the economy in the process but it also involved ejecting hundreds of thousands of migrant workers. For a country increasingly reliant on a steady stream of foreign labour, this has left a huge void in the labour market.

Federal and State governments are now rolling out the red carpet for foreigners by offering various incentives. But they are still trickling into the country in small numbers.

Treasury forecasts in the March Budget revealed that net overseas migration — which was an anaemic 41,000 last year having fallen for the first time since World War II in the first year of the pandemic — is not expected to hit pre-pandemic levels until the middle of the decade.

Business leaders have called on the Albanese Government to take urgent action, including increasing the annual cap on skilled migrants from the current level of 160,000.

The McGowan Government also revealed on Thursday it hopes to treble the number of foreigners it sponsors to work in WA each year, urging the Commonwealth Government to increase the number of places in the State Nominated Migration program to 10,000. But efforts to bring in more migrants so far have been bogged down by bureaucracy.

Painfully slow visa processing times have delayed the arrival of foreign workers and caused a huge backlog to build up.

Some visa applicants have been forced to wait for 12 to 18 months. The issue was raised by State and Territory leaders during Mr Albanese’s first National Cabinet meeting as Prime Minister last month. He assured State premiers that staff from the Department of Home Affairs had already been diverted from other jobs to focus on visa processing. But some believe the application process itself also needs to be streamlined, with Australia’s visa system described as one of the most complex in the world.

“There’s too much paperwork,” Mr Rose said. Business leaders have also urged government to clear away some of the red tape which makes it difficult for them to hire foreign workers in the first place.

This includes scrapping the requirement to advertise locally for a certain period of time before they are allowed to look further afield. “The whole process is costly, time consuming and bureaucratic,” Australian Chamber of Commerce and Industry chief executive Andrew McKellar said.

He warned this bureaucratic quagmire means Australia is being “beaten to the punch” when it comes to attracting foreign talent by countries with more streamlined visa regimes like Canada. “We have a lot of ground to make up after shutting the international borders for two years,” he said. Of course, bringing in more foreign labour is just part of the solution.

More needs to be done to mobilise Australian workers, whether by making it easier for women to return to work after having children , or by training more young people.

This will involve tackling deeprooted challenges. It is sometimes easy to forget that Australia has suffered from a skills shortage for decades: it cannot all be blamed on COVID.

Slow population growth and an ageing population have been a factor . So too, has the hollowing out of Australia’s manufacturing industry, as it has become increasingly reliant on shipping in goods from overseas.

Meanwhile, many businesses have become hooked on bringing in workers from overseas, rather than training staff themselves. “Employers have got into habit of not offering people secure work with a career path,”

Dr Denniss said. “We have to ask why some of the least-developed countries in the world are training our doctors and nurses for us.”

Mr Albanese has already committed $1.2b to create 465,000 free TAFE spaces in areas where there are skills shortages, such as hospitality , tourism, child care and nursing .

He has also promised to generate up to 20,000 extra university places over this year and make sure one in 10 workers on major government projects is an apprentice , trainee or cadet.

But some business leaders are disappointed he has not extended the wage subsidy scheme introduced by the Morrison government during the pandemic to encourage firms to take on additional apprentices. The Boosting Apprenticeship Commencements package ended on Thursday.

“The business case for trade apprenticeships was very challenging for firms. But these wage subsidies were generous and made a big difference,” Mr McKellar said.

The Prime Minister’s $5.4b plan to make child care cheaper for families also forms a central part of his strategy to address the skills shortage. The hope is this will encourage more mothers to return to work, or to switch from part-time to full-time roles.

But Mr Albanese is also facing calls to encourage pensioners to return to the workforce. New Liberal leader Peter Dutton has pressed the Albanese Government to allow pensioners to earn more money without seeing their pensions being cut back — borrowing an idea championed by WA mining magnate Gina Rinehart and rejected by the Coalition.

Currently pensioners can earn $300 a fortnight before their pension payments are reduced, but Mr Dutton wants the income threshold to be increased to $600.

The Australian Chamber of Commerce and Industry has estimated it could attract as many as 400,000 older Australians back into the workforce. Of course, much also hinges on what is being done at State level. The McGowan Government’s $195m Reconnect WA package includes a raft of initiatives, including slashing TAFE fees and providing free short courses for in-demand roles, such as a drilling program. But the Premier is also hoping the State’s enviable lifestyle, bountiful sunshine and stunning beaches will prove irresistible to migrants.

He has even insisted higher wages and cheaper homes make it a “no-brainer” for those living on the eastern seaboard to move west. Only time will tell whether Mr McGowan’s confidence in the pulling power of his adopted State is justified, or wishful thinking..