Labour shortfalls in various industries and vocations throughout the country are normal in the Australian economy.  This is due to a variety of factors including:

• Ageing population.
• Negative birth rate.
• Extended periods of economic growth.
• Government policy and social development that has resulted in a lack of local skilled trades people and professionals.
• The inevitable outcome of this employment gap is a drop in the capacity and productivity of Australian business and hence a reduction in national growth and profitability.

Recent reports have warned that Australia’s shortage of skilled workers has become so chronic, the economy and company profits will be shackled in the future. Prominent economic forecaster BIS Shrapnel says it believes the economy will struggle to maintain growth of 3 per cent a year, with the tightening labour market set to act as a permanent constraint. "Australia has entered a new era of constrained growth," said BIS Shrapnel senior economist. (Death of skills is death to profits, The Age, June 26th 2006)

The recent Grant Thornton international business owners survey of more than 7,000 firms found 50 per cent of Australian businesses believed they were constrained because of the lack of skilled staff. Robert Quant, chairman of Grant Thornton in Australia, said it was clear local firms were suffering because they simply could not find enough skilled staff.

"Business owners now regard this as the main constraint on expansion and feel they are starting to hit rock bottom as far as the availability of skilled staff is concerned." (Half of firms 'have skills shortage', The Age, May 16 2006)

As business feels the pinch as a result of the skills shortage, Australia’s capacity to compete on a global scale is also diminished. However, as Tom Gorman the President of Ford Australia recently commented, “If we bring resources from outside Australia, that ultimately makes Australia more competitive” (Little help to close skills gap, The Age, Ian Porter, May 11 2006). Surveys on the nature of skills shortages are routinely conducted on a Federal and State Government level, the results of which are passed on to the Department of Immigration and Citizenship (DIAC).

In response to these ever-expanding shortfalls in the Australian labour market, DIAC allows a quota of skilled migrants and temporary workers to enter the country each year. This provides businesses in a range of fields with the opportunity for the sponsorship of overseas workers on a four-year temporary business visa.

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