On April 27, IPA Deputy Executive Director Daniel Wild discussed IPA research on Australia’s worker shortage crisis and the government’s migration review on FiveAA Afternoons with Jade Robran.
Below is a transcript of the interview.
Do you think Australia’s migration system is broken? A review released today says a major reform is needed to attract skilled workers to drive economic growth in our country, or we risk being left behind the rest of the world. Here’s Home Affairs Minister Clare O’Neil, who addressed the Press Club a short time ago.
Today, I want to have a conversation about migration, which is direct and honest. In each of these historic instances, migration helped us become a more prosperous and secure Australia because the system was designed to meet the challenges of the moment. And that is not true of our system today.
I would challenge anyone in this room to explain what national problems our migration system is seeking to solve. Our migration system is suffering from a decade of genuinely breathtaking neglect. It is broken, it is failing our businesses, it is failing migrants themselves. And most important of all, it is failing Australians.
There you go. Do you agree with Clare? Is it broken? How do we fix it? Joining us now is Daniel Wild from the Institute of Public Affairs. Good afternoon, Daniel.
Good afternoon. Nice to be with you.
You too. Now you think that we should be looking in our own backyard, is that right?
Well, I think we should be, in terms of the worker shortages that we’re facing. In South Australia, for example, there’s around 23,000 job vacancies, which is more than double the pre-Covid level. And so there’s no doubt we’ve got a real significant worker shortage problem. But we also know there’s a lot of pensioners and veterans who would like to get back into the workforce but are not currently doing so because of the financial disincentives that they face.
For example, right now, if you earn $226 a week as a pensioner, you then stand to lose 50 cents in every dollar thereafter, which is why only about three out of a hundred pensioners in South Australia are currently working, compared to about 25% in New Zealand where they don’t have the same tax and red tape barriers.
So yes, migration has played an important role in our history and it will continue to do so, but we’ve got a ready-made answer right in front of us, which is to get more pensioners and veterans into work if they choose to do so.
There are some fundamental flaws in the system, isn’t there?
Look, there certainly are. And look, what’s really interesting is that we’ve had a survey that’s come out recently from the National Seniors Association that’s found about 20% of pensioners in South Australia would like to work if those financial disincentives were removed. And what’s interesting about that is, that’s around 44,000 pensioners, which is double the number of job vacancies.
Now, I’m not saying that every single pensioner is going to be matched to the jobs that are available, but at a minimum we need to start by looking at what potential we have here at home.
We also know that more migration will exacerbate some of the infrastructure challenges that we have, in terms of schools, roads, and hospitals. We know that the median rent across Adelaide has jumped by about 13% over the last year. So it’s about $480 a week and you just can’t afford that. If you’re a student or someone working part-time or on a lower income, you simply cannot afford, in many cases, to buy a house or even rent a house at the moment in Adelaide. So we need to be rebuilding our social and economic infrastructure before we bring in a large number of migrants.
Why does our government have their head in the sand? There is a very simple solution here.
Well, look, they’ve got their head in the sand because it’s an easy solution to expand the migration program. This is the issue that we face. Because look, if you bring in a greater pool of migrants, yes, you’ll get a temporary sugar hit in terms of expanding your economy, but it doesn’t do anything to improve the lived experience of the average person.
And look, what happened was the federal government did make some very small changes in December of last year. But they haven’t worked because the total number of job vacancies has declined by only 1% since those changes were brought in. So they’ve given up on that and they’ve said, we’re just going to do the short-sighted lazy approach of expanding our migration program.
Now, like I say, yes, migration can and has played an important role in our national story and history. But we’ve got a ready-made solution, whether it’s students or veterans or pensioners, many of whom would like to work but don’t work because of the really significant financial disincentives that they face.
What about middle-aged Australians and younger ones coming through? Do we still have that lazy, just put your hand out mentality still?
Look, there is a bit of that, I think. A lot of people have had it so good for so long. Our last sort of major recession, Covid notwithstanding, was in the early 1990s. So a lot of people just haven’t experienced tough times like we had in the past. And look, we’re very fortunate as a nation to be able to take care of people. But I think there is sometimes a bit of an attitude that doesn’t necessarily always put work first.
But at the same time, I don’t think governments are doing everything they can to make sure Australians are getting first access to jobs. Look, if we can’t straightaway match people to a job, then we should look at training and skilling up our own people here.
You mentioned younger people, and this is really a cause for concern. What we know is only about one in two young Australians, who are on the youth allowance, are currently working. And that’s a real concern because, as we all know, getting into a job is not just about money, but it gives you critical social skills. It teaches you to get up out of bed in the morning, get to work on time, the social skills you need to get along with colleagues. It’s absolutely critical. So the fact that only one in two young people on the welfare they receive are working, is a real cause for concern.
Most definitely. Daniel, thank you so much. And then we have this push coming from Victoria to up those benefits as well. So that’s going to disincentivize people to want to go out and get work if they’re getting paid even more to stay at home. Makes no sense.
We spoke to Daniel Wild, who is the Deputy Executive Director at the Institute of Public Affairs who pointed the finger at the government in regards to, well, just lightening the laws surrounding older Australians because as we know, they get punished, basically. If older Aussies want to go back to work, their pension gets taxed at a really high rate, then they’ve got to deal with Centrelink and it goes on and on and on. So a lot of people are just, “You know what? I am fed up, it is easier for me not to work and to stay at home”, even though there is a large majority out there that really would like to.
This transcript with Daniel Wild talking on fiveAA from 27 April 2023 has been edited for clarity.