Prime Minister Anthony Albanese has doused expectations that next week’s summit will be the watershed moment for labour and skills shortages in Australia, but pressure is mounting here and abroad to make haste on gaping holes.
Australia is down more than half a million skilled foreign workers post- v pre-pandemic, with NSW alone projected to be short 304,000 employees by 2025-26 if it’s business as usual at the border. The view from Down Under is not good, so Crikey went in search of greener pastures across the ditch in New Zealand — only to find our Kiwi counterparts are also in a spot of bother.
The country’s unemployment is at a near-record low of 3.3%, but as policy director and economist for the New Zealand Council of Trade Unions Craig Renney told Crikey, this figure doesn’t speak to underemployment or employer demand.
“Functionally we have low unemployment, but employers are telling us on a daily basis that they’re having enormous challenges recruiting and accessing skills,” he said. “They keep telling us there’s not enough talent. There are still some 19,000 people who want more work. That’s about the same size as the population of Wellington city.”
How is New Zealand tackling the labour shortage?
In terms of announceables, NZ has doubled its working holiday intake and offered a fast-tracked path to permanency for 310,000 temporary migrant workers. No such enticement was extended to Pacific workers on the Recognised Seasonal Employer (RSE) scheme, although 2000 more positions were added to the program.
NZ demographic and economic expert from Massey University Professor Paul Spoonley said that the country’s overreliance on “labour trained elsewhere” has been the root cause of poor productivity and low retention.
“A lot of employers rely on cheap migrant labour. Not cheap in the sense of low wages but cheap in the sense that someone else has invested in their educational training,” he said.
Migrants are often better skilled than the NZ labour force but they’re not Kiwi-fit, lacking local links, lingo, and know-how. That leaves employers underwhelmed and employees unsatisfied.
“There’s a real paradox here,” Spoonley said. “Employers often complain that migrants are not job-ready but there’s little acknowledgement that an employer actually needs to make a contribution to ready them for the New Zealand workforce.”
A lot of people come to NZ but, historically, many more leave. Renney puts it down to the nation’s attractive-from-afar appearance. Wages are good, lifestyle looks great and the landscapes are glorious, but once boots are on the ground the cost-of-living reality hits home.
“There’s a really enviable package here of clean, green New Zealand, but that image hides a lot of problems — you get here and you realise just how expensive everything is,” said Renney, recalling how he “almost cried” when he first went to a Kiwi supermarket 10 years prior.
Australia v New Zealand
Compare the pair: taxes and wages in NZ are lower than Australia while cost-of-living is comparatively higher, so the money left in the Australian hip pocket is more. Problem solved? No. When Australia does well, NZ does better. “As Australian economies get hot, so too do labour markets in New Zealand,” said Renney.
The competitive symbiosis of the two labour markets only complicates cross-Tasman career courtship. “In New Zealand, we keep saying ‘Let’s get some good keen Aussies’, but they want to hire some good keen Kiwis, so it doesn’t really work. We’re all in the same boat,” said William Morrison, a sheep and beef farm operator on New Zealand’s North Island who’s currently understaffed and overstretched.
“I said to my wife a few months ago ‘Thank goodness we have stable staff’.” But that changed overnight, he said. “I’m two staff down and haven’t had a day off in four months.”
If only it was a simple matter of printing more humans (NZ Reserve Bank Governor Adrian Orr quite literally ruled this out), or wrong skills in the wrong place. There was some effort made during the pandemic to redistribute and retrain grounded industries. Airline pilots were deployed from the cockpit to the tractor cab, but “success” stories such as these were outliers.
As in most high-income countries, labour shortages in NZ predate the pandemic. Renney says the country risks cementing a “less resilient economy” if it does not address underlying structural issues of productivity, pollution, and poverty.
“We need to look through the current challenges and say, yes, wages will go up a bit, but if we simply go back to where we were, we’re buying all the problems we had before.”
Economic power imbalace between employer and employee has been the result ofneo-lib policy for years (both major parties)
the social and wealth divide continues to grow apace.
Conservati e governments around the world have acted in concert with employers to keep workers in their box for years. It has manifested itself as stagnant wages. They still havent worked out that it was counterproductive and want to persist.
I think it goes much deeper than employer/employee power imbalances. There has been a concerted effort particularly in the last 9 years to underfund education in all areas except the private school sector. Both tertiary and TAFE funding has been decimated. Most employers are not prepared to train staff and want everyone skill ready. This is a situation which was bound to happen. Very, very short sighted and a result of neoliberalism in the extreme.
Iibban,
Could not agree more.
Many years ago I worked in a design office. I used a slide rule all day. Each calculation took about a day. I was replaced by a computer. Fortunately I had a broad based skill set and moved easily onto a new carer path.
Currently we have substantial underemployment due to outsourcing vocational education to employers. One of my mates (Training Officer ret.) refers to the current lot as half tradies with a ute. We have adopted the US model where individuals do not get a comprehensive skill set just a very narrow specific skill. Say, like a person in the office who is very skilled at operating say a photocopier only, and the photocopier is replaced with a new piece of technology. Cannot do anything else so that person is redundant, unskilled and unemployable.
This is a failure of Government at the behest of employers not to provide comprehensive education and skills development for Australians. Helps keep wages down and reduces labour mobility.
Interesting as we are debating aspects of carbon reduction at the same time. Guess what – more people means more carbon production. Not to mention the brain drain from from third World countries – One of the background reasons Russian Historian Milosevic gives for the Russian response to NATO in Ukraine.
We need to set an example other than adopting the traditional imperialism we brought with us from white Europe. No we got ourselves into this situation so stop “Blackbirding” skilled personnel from third world countries.
Australia needs to stop taking the easy way out, educate our own populous and provide the skills we need and whilst doing that help educate our neighbors and support them in their development.
WOW! Well that was a Clanger. The Russian Historian is Roy Medvedev. Sorry about that.
No miracles here in NZ. We are currently travelling around the north island. Every strip shopping centre will have at least a couple of personal and emotional notices in the windows of recently closed shops, detaining how they have finally decided to end the struggle, mostly as they cannot get staff for love or generous money. A lot of these businesses are 15-–25 years old, and it makes you wonder how many of the others around them are also on their last legs and drafting their window notices.