“Australia’s persistent worker shortage crisis is a handbrake on vital economic growth with job vacancy levels remaining almost twice that of three years ago,” said Saxon Davidson, Research Fellow at the Institute of Public Affairs.
Data released today by the Australian Bureau of Statistics shows there are over 390,000 job vacancies across the nation, and one in five Australian businesses cannot find the workers they need. Australia’s job vacancies have remained over 350,000 since May 2021.
“While it is encouraging that job vacancies have reduced slightly, the job vacancy level still remains 72 per cent above the pre-covid mark from February 2020,” said Mr Davidson.
“Today’s figures show that piecemeal reforms are not delivering the impact Australia’s economy needs. It is time the federal government removed all tax and red-tape barriers preventing Australian pensioners, veterans, and students from working to unlock a vast pool of local workers.”
Earlier this week, the Employment White Paper confirmed the federal government would seek to make permanent the minor changes made to the pension work bonus last year. These reforms only allow age pensioners and veterans to earn $226 per week before facing an effective marginal tax rate of 69 per cent.
“Although welcome, this measure does not go far enough to properly address Australia’s worker shortage crisis,” said Mr Davidson.
“Pensioner labour force participation has only increased by 0.2 per cent since these minor reforms were enacted, which is a clear demonstration that comprehensive reform is needed once and for all.”
“Currently only three per cent of Australian pensioners work compared to 25 per cent in New Zealand, where barriers do not exist. Leading surveys show 20 per cent of Australian pensioners would consider re-joining the workforce if these barriers were removed,” said Mr Davidson.
Recent analysis by the Institute of Public Affairs found if tax and red tape barriers preventing pensioners, veterans and students from working were removed, job vacancies in each geographic zone across the nation could decrease by over 60 per cent.
“Australians have been aware of our ageing population for a considerable period, yet governments of all political stripes have failed to undertake serious reforms to remove the barriers preventing those who want to work from getting work,” said Mr Davidson.
“Economic analysis by the IPA has found that Australia’s entrenched worker shortage crisis is costing Australians $32 billion in foregone wages and the federal government $7 billion in foregone income tax revenue,” said Mr Davidson.
“Getting pensioners, veterans and students into the workforce is a simple and effective policy measure that is good for them and good for Australia.”
To read the IPA’s worker shortage research click here