New ABS Data Confirms No End To Worker Shortage Crisis

Written by:
27 June 2024
New ABS Data Confirms No End To Worker Shortage Crisis - Featured image

“The nation’s ongoing worker shortage crisis highlights the immediate need to remove tax and red tape barriers stopping Australians who want to work, instead of pursuing a failed migration strategy, which is exacerbating the cost-of-living stress mainstream Australians face,” said Saxon Davidson, Research Fellow at the Institute of Public Affairs.

New data released today by the Australian Bureau of Statistics shows there are still over 352,000 job vacancies across the country, 55 per cent higher than before the pandemic, despite current record migration levels being justified on the idea it would solve Australia’s worker shortage crisis.

“The continuation of this crisis clearly shows the Albanese government is, at best, incapable, or, at worst, unwilling to respond to this crisis. Today, worker shortages are costing Australians $32 billion in foregone wages, and the government $7 billion in foregone tax revenue,” said Mr Davidson.

“It is clear the federal government’s solution of mass migration has not worked. Recent IPA research revealed that in the year to March 2024, only 40,000 net jobs were filled despite the fact that over a million migrants entered the country.”

IPA analysis has clearly shown that removing the red tape and tax barriers facing Australian pensioners, veterans, and students is the most effective way to address this issue.

From 1 July 2024, Australian pensioners and veterans will face an effective marginal tax rate of 66 per cent should they earn over $226 per week. This occurs as a 50 per cent claw back is applied on their pension for every dollar earnt over $226 with normal tax rates on top. Similarly, students face an effective marginal tax rate of 79 per cent should they earn over $288 a week.

“For our pensioners and veterans, should they work just a day and a half on the minimum wage, they are hit with exorbitant tax rates which simply doesn’t make work pay. We are all missing out on the skills and experience this cohort can bring to our workplaces,” said Mr Davidson.

In New Zealand, pensioners who choose to work pay tax on their combined pension and income at a tax rate as low as 10.5 per cent, and their pension is not reduced for simply working. This is why one in four pensioners work in New Zealand, compared to only three percent of pensioners in Australia.

“The federal government has failed to deliver the appropriate reforms to solve Australia’s worker shortage, which has been left unattended for three years. We need our government to finally adopt the New Zealand pension tax model to get Australia working again,” said Mr Davidson.

“This model is the primary reason why New Zealand did not have a worker shortage crisis during and since the pandemic. If our federal government adopted this model for our pensioners, veterans, and students, Australia could have 520,000 extra workers entering the labour force.”

“With 352,000 job vacancies nationwide, it is utterly short-sighted to rely on unplanned mass-migration to fill these vacancies when there are Australians ready and willing to work. The present policy settings are only adding to the housing and cost of living crisis,” said Mr Davidson.

To download the IPA’s research on Australia’s worker shortage crisis click here.

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