Australia raises immigration target amid labor pressures and global talent race

SYDNEY (Reuters) – Australia on Friday increased its intake of permanent immigrants to 195,000 this fiscal year, up 35,000, in a bid to help businesses and industries grappling with widespread staff shortages and reduce reliance on short-term workers.

The COVID-19 pandemic closed the country’s borders for nearly two years and, combined with an exodus of holiday workers and foreign students, has left companies struggling to find employees to stay afloat.

“It doesn’t make sense to bring in people, keep them for a few years and then get a new batch to adapt to the Australian working environment,” Prime Minister Anthony Albanese told reporters on the sidelines of the Government Jobs Summit in Canberra.

“We want people…get a mortgage, raise a family, join the Australian family. Immigration is part of our story.”

The increase will take effect for the current fiscal year ending June 2023 and will bring Australia’s immigration target largely in line with the annual cap of 190,000 that was in effect between 2013 and 2019.

That level was reduced by 15% to 160,000 just months before COVID-19 hit in an effort to ease urban congestion. The government did not give any details about the current figures.

The newly elected center-left Labor government held the two-day summit, inviting business groups and unions to help find solutions to key economic challenges. Read more

Australia’s unemployment rate is now at a 50-year low of 3.4%, but a labor shortage has contributed to rising inflation that has lowered real wages.

“COVID presents us, on a plate, with an opportunity to reform our immigration system that we will never go back to again. I want us to take this opportunity,” Home Affairs Minister Claire O’Neill told the summit.

Skilled Labor Race

Australia has been competing with other advanced economies, such as Canada and Germany, to attract more highly skilled immigrants, with increased demand exacerbated by an aging population.

Canada said last month it was on track to surpass its target of granting permanent residence to more than 430,000 people this year, more than double Australia’s, while Germany plans reforms to make itself more attractive to skilled workers.

But the explosion in visa processing times in Australia has left about a million potential workers in limbo, exacerbating the staff shortage crisis. Read more

“We understand that when people wait and wait, the uncertainty can become uncontrollable,” Immigration Minister Andrew Giles told the summit. “This is not good enough, and reflects the visa system that was in crisis.”

In an effort to speed up visa processing, Giles said the government will spend A$36.1 million ($25 million) to increase its staff capacity by 500 people over the next nine months.

Companies welcomed the government’s efforts.

“We are in a global competition for the best talent in the world, and the more barriers we remove from the system, the more opportunity we have to attract the best people,” said Ines Willox, chief executive of the Australian Industry Group.

($1 = 1.4725 Australian dollars)

(Additional reporting by Ringo Jose and Lewis Jackson). Editing by Richard Boleyn

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