BUSINESS wants urgent action to head off long term labour shortage A major report by Western Australia’s peak employer group has called for urgent government action to boost the population and the workforce which it says will see WA require as many as 400,000 additional workers over the next decade.
The 120-page report by the Chamber of Commerce and Industry of WA entitled Building Human Capital reviews current and future labour availability and predicts the state will not have the capacity to sustain the economic boom and fulfil its long term potential unless the WA and federal governments move without delay to improve the labour supply outlook.
The report proposes an action strategy covering 12 areas, including measures to lift immigration considerably, widen the skill categories for temporary migrant work visas, expand education and training, and introduce work incentives such as tax cuts and child care assistance.
The Chamber says labour shortages are the biggest challenge facing all sectors of WA business and if left unchecked they have the potential to become entrenched and to undermine the state’s future economic growth and prosperity.
CCI chief executive John Langoulant said there was no time to lose.
On current projections, the state would not have the workforce needed to service the $100 billion investment in the pipeline for WA.
“If we don’t have people to fill the jobs, we can’t expect to sustain this boom into the future,” Langoulant said.
“To ensure the ongoing success and prosperity of our small, medium and large businesses, it is imperative employers have access to a reliable, flexible and well-trained workforce on the scale necessary for growth.”
“Currently there are simply not enough people to go around, and our modelling shows this is not going to change,” he said.
“In fact, it’s likely to get worse.”
The CCI report says the WA economy is operating at near full employment. Recent ABS data showed there were only 1.35 potential applicants for every job vacancy in WA in the 2007 September quarter.
The report says the ageing of the population is becoming a major issue.
Immigration levels and rising birth rates would not keep pace with retirements and another push was needed to boost the workforce through immigration.
The Chamber is calling for a well planned and co-ordinated national approach to ensure there will be sufficient people entering the labour market.
Its report makes recommendations in 12 areas, including Increasing Australia’s permanent immigration intake and addressing Australia’s ageing population.
Simplifying the 457 visa program by reducing the regulation and red tape imposed on business.
Extending temporary migration schemes to include semi-skilled workers from a wider range of professions. Providing greater incentives for people to enter or remain in the workforce.
Lowering personal income tax rates, including cutting the top marginal tax rate to 30%.
Allowing child care to be salary sacrificed.
Providing further education and training to segments of the workforce, including older workers and the long term unemployed, to raise their productivity.
Maintaining the current industrial relations reforms which have delivered greater flexibility and productivity in the workplace.
The WA government to embrace the National Reform Agenda.
CCI identified sectors of the local population where there was scope for higher participation in the workforce.
These included older workers or those close to retirement age, the long term unemployed and women who have left the workforce to raise a family.
Research by the Productivity Commission has found Australia performs strongly in international labour participation rates. However there is room for improvement.
For prime aged males (25 – 54 years) Australia ranked 25th among 30 OECD countries in 2005, more than five per cent lower than the top performing countries.
CCI also believes greater effort needs to be made to make Perth and Western Australia a more vibrant and dynamic place to live and work. This requires the state government to remove the current restrictions on retail trading hours, greater investment in social infrastructure and the creation of a vibrant social environment.
Langoulant said failure to tackle the state’s continuing labour shortages would constrain business investment and economic growth, threaten the state’s ability to deliver major projects on time and on budget and weaken WA’s reputation as a place to invest and do business.
The State’s future growth and prosperity depended on governments moving swiftly and concertedly to address the issues.
Chamber of Commerce and Industry of Western Australia