Skills shortages are impacting productivity

Federal Parliament finally resumed this week with the Albanese Labor Government taking its position on the Speaker’s right after a nine-year hiatus.

The Albanese Government has already announced a Jobs Summit and one of their first Acts to be introduced, is the legislation to create the new agency Jobs & Skills Australia.  These are actions welcomed by HVIA. 

It is not just the Government that has the skills shortage front of mind.

This week, Ms Allegra Spender MP, the new independent member for Wentworth, used a column in the Australian Financial Review for a well-timed call to action on this important issue.

In her editorial, Ms Spender said that Australia has an acute worker shortage and critical skills deficit.

“Last month’s ABS data shows there are more than 480,000 unfilled jobs in Australia. With unemployment at a 48-year low, and COVID-19 absences continuing to cripple businesses, an immediate domestic solution is unlikely,” Ms Spender said.

“For the businesses I speak to, the most pressing issue is skills and staff shortages. The Commonwealth must lead from the front in addressing this crisis.”

Ms Spender called for an increase to the permanent skilled migration intake to above 200,000 – up from 109,000 – for the next two years.

“It means providing a permanent residence pathway for all those on Temporary Skills Shortage and Temporary Graduate visas,” she said.

“It means raising the share of skilled migrant visas that are employer-sponsored.”

The skills shortage is high on HVIA’s list of priority actions for the new government.

HVIA’s 2022 Federal Election manifesto, themed A strong heavy vehicle industry – vital for a resilient Australia, set out our priorities across four key areas: safety, manufacturing and productivity, sustainability, and skills and jobs.

HVIA has called for streamlined processes for bringing in skilled migrants to address critical skill shortages in the heavy vehicle industry – reducing the bureaucracy and costs for HVIA members.

HVIA Chief Executive Todd Hacking said that with the heavy vehicle pipeline ballooning out to near two years in many cases, the lack of skilled labour is a drain on productivity.  

“While well-documented supply chain disruptions aren’t helping, the biggest impediment is skilled workforce shortages,” Mr Hacking said.

“The skilled migration system was designed when the unemployment rate was double what it is now and with an unemployment rate at 3.5% – everyone that wants a job, has one.” 

HVIA is pushing for 5 practical reforms.  These are:

1. Ensuring the Short-Term Skilled Migration (Visa 482) should include a pathway to permanent residency. 

2. Altering the Skilling Australia Fund payment to instalments are after the sponsored employee is in work- reducing the huge upfront cost barrier

3. A current and temporary change in the rigidity of the Labour Market Testing;

4. De-coupling family members from the skilled migration cap; and

5. Greater flexibility in the locality of the sponsored worker, allowing the worker can be placed where the work is and not tied to a specific geography.

“Currently, if the employer used the 482 Visa, and wants the relationship to continue, and the sponsored worker wants to make Australia home, there is no discretion for this to occur,” he said.

By moving the payment of the Skilling Australia Fund, (usually the most expensive fee of the visa process,) to the back end of the process, not the front – you reduce the upfront cost substantially.

“This is a simple, practical measure which does not alter the sum of money being paid to the States but would really help reduce the cost barrier. Mr Hacking added.

Reducing the rigidity of the Labour Market Test – even temporarily, will save three to six months.

Mr Hacking said visas often lock a person into a specific location which prevents employers from utilising the employee based on shifting demand.

“We agree with Ms Spender that increasing the cap is necessary, but the Government needs to also provide additional resources for processing applications and needs to de-couple families, who are currently counted within the cap quotas, well. 

“The Government is making great gains in restoring Australia’s place on the international stage, and this is a great opportunity to make it known that we are back to normal and open for business.”

“We still have a big job to do to educate more of our elected officials about the scale of Australia’s vital heavy vehicle manufacturing industry,” Mr Hacking said.

“While the last few years have gone a long way to building more awareness of the essential role of our industry, more needs to be done to ensure our interests are given appropriate consideration and help – and less red tape.”