16/11/2011 - 10:20

Migration acts as pressure valve

16/11/2011 - 10:20


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The flexibility that skilled migration delivers to the labour market is often overlooked in the debate over solutions to the skills shortage.

The flexibility that skilled migration delivers to the labour market is often overlooked in the debate over solutions to the skills shortage.

SPEAKING at a business summit in Honolulu last weekend, Prime Minister Julia Gillard rolled out a line of argument that has been a popular staple for Labor politicians and union leaders.

She said business leaders needed to focus more on training and education rather than asking for more migrants to address their labour needs.

“It is not acceptable to me that I can see a mining CEO who says: ‘We’ve got this huge project in the north-west of the country and we can’t get anybody to come and work on it – and we need more immigration and more skilled labour’.

“And I can find in the suburbs of Perth pockets where youth unemployment is in double digits and those kids haven’t got a chance.

“We’ve got to do better than that and make sure they get where the jobs are, with the skills they need.”

Business executive and Infrastructure Australia chairman Sir Rod Eddington provided a degree of support for the prime minister when he spoke at a business function this week.

“The private sector has to take some of the blame here because a lot of our big companies used to run apprenticeship programs – some still do – in conjunction with our Tafes and universities,” Sir Rod said.

“But I think the private sector has invested a lot less in the skills training over the last 20 years than it did prior to that.”

This line of argument has some merit, but it is simplistic.

Improving education and training opportunities for the unemployed is just one of many potential solutions to the skilled labour shortage.

Encouraging greater workforce participation is another goal, for older Australians, parents, and disabled people. Employers need to be responsive to the needs of these groups if they want to tap into this source of labour; for instance by offering more casual or part-time work arrangements.

Boosting the productivity of employed workers is yet another partial solution to the country’s skilled labour requirements. If employers can get more output from their current staff, for instance by adopting smarter work practices, they will not have the same need for extra recruits.

All of these strategies – focused on training, productivity and participation – are commendable. But they all take time, they all draw from a finite pool of labour, and they require careful planning to align training programs with the needs of industry.

That is inherently difficult in a fast-moving economy. Planning the labour needs of an individual business is hard enough; planning across the state or national economy is extraordinarily difficult, especially when plans keep on changing.

Let’s take a few examples to illustrate this.

Geraldton, for instance, has been on the brink of an iron ore mining and construction boom for years. But the city is still waiting for the Oakajee port and railway project to proceed, and most of the big mining developments are still on the drawing board.

On the east coast, Gladstone could be the epicentre of an unprecedented construction boom, driven by at least three massive coal seam gas projects. Yet these projects still face major planning and regulatory hurdles.

It’s a similar story for Woodside’s James Price Point gas project near Broome. Community and political opposition could delay the project, and possibly even block it.

Collectively, the five projects listed above would employ tens of thousands of workers during their construction. That’s a very large number in the context of the Australian labour market.

In fact, all of the mega projects around Australia – including Gorgon, Wheatstone, the iron ore mines and port expansions in the Pilbara – need thousands of workers during the construction phase.

It simply isn’t possible to turn the domestic labour market tap on and off to meet their requirements.

That’s where skilled migration comes in. It’s the pressure valve that enables businesses in Australia to get the labour they need, without taking jobs away from locals, and just as importantly without adding to labour inflation by bidding up wage rates.

That’s why properly structured and flexible skilled migration programs are a win-win.



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