Australia needs extra 1.4million skilled workers by 2025


AUSTRALIA faces a potential skills shortfall equivalent to 1.4 million workers by 2025 unless the workforce participation rate increases, according to new research that recommends raising the retirement age and boosting skilled migration.

The Workplace Futures report, to be presented to the Victoria Summit in Melbourne today, urges federal and state governments to lift barriers to older workers and disadvantaged groups participating in the workforce.

Despite predicting strong population growth based on the continuation of high birth and net migration rates, the paper warns the ageing population will mean a decline in workforce growth, exacerbating labour shortages to levels worse than between 2006 and 2008. The paper, prepared by the Victorian Employers Chamber of Commerce and Industry, says the shortfall in the state by 2025 could potentially be 440,000 workers, if retirement and migration rates remain at current levels. One of the authors, Darin Ritchie, said yesterday that if workforce trends did not change, the projected participation rate nationally in 2025 would drop from 65.2 per cent to 61.8 per cent. “To meet moderate levels of labour-demand growth, Australia’s participation rate would need to be 68 per cent,” he said. “This could potentially leave a shortfall of 1.4 million workers.

“To address this workforce deficit, Australia needs to raise the average retirement age, increase the workforce participation of disadvantaged groups, increase migration, or offset labour demand through productivity growth.”

The forecasts are based on Australian Bureau of Statistics population growth projections of 1.6 per cent, jobs growth of 1.9 per cent, and an unemployment rate at 4.5 per cent. “The prominence of demographic change and skill shortages has recently been overtaken by the economic downturn of the last 12 months,” the paper says. “With unemployment increasing over that period, it would be easy to assume we no longer have a labour or skills shortage problem. However, skills shortages still exist in many industries, and the reality of Australia’s ageing workforce means we face a structural deficit of workers over the next 15 years.”


Based on three months of interviews with representatives of government, business, education institutions and unions, the paper recommend policy changes, including the Victorian government raising or eliminating the workers compensation age limit.

Federal and state governments should work with universities to assess the potential for using overseas students to meet current and future skills and labour needs.

This could include increasing the ratio of postgraduate research in overseas student enrolments and improving job opportunities for graduate overseas students.

Wayne Kayler-Thomson, the chamber’s chief executive, said encouraging older and disadvantaged workers by removing barriers to training would lift workforce participation rates.

Source: .The Australian November 17, 2009

Ewin Hannan From:


Leave a Reply