Australian Migration Can Lead To Skills Shortage

27 Aug 2010

Industry analysts warn that large cuts to migrant numbers can lead to skills shortage and lead to wage blowouts.

The housing construction industry is experiencing an undersupply of labour and lack of dedicated migration program for residential sector.

But it also says migration targets may not be enough to maintain a working age population.

"There's no doubt there is a shortage of labour there," Housing Industry Association (HIA) chief economist Harley Dale told AAP.

"It's not as acute as it has been at some periods in the past simply because industries were recovering from what was a very weak 2008/2009, but we have pretty clear evidence that there are widespread labour shortages."

A recent HIA survey found eight of 13 housing trades were under-supplied in the June quarter.

"I think we will get a situation where we're going to continue having a challenge providing sufficient skilled labour," he said.

Australian Bureau of Statistics (ABS) figures released on Thursday show new capital investment fell unexpectedly in the June quarter, but investment plans for 2011 still look strong.

Mining investment is expected to increase by between 40 and 50 per cent over the year.

Australia's migration program is focused heavily on skilled migration.

However, a separate ABS report released in June found humanitarian migrants were more likely to work as labourers or tradespeople than skilled migrants.

The report said that,"Almost a third of humanitarian program migrants were employed as labourers and 18 per cent were employed as technicians and trades workers," the report said.

Mr Dale said an overall cut of more than 30 per cent in net migration was a concern.

"We wouldn't want to see immigration targets that ultimately meant we undershot what we need to maintain a working age population," he said.

Another major challenge was to create a dedicated migration program for the residential sector.