Three fast fixes for the Jobs Summit - Grattan Institute

There’s no shortage of ambition heading into this week’s Jobs and Skills Summit. The challenge for the Albanese government is to find some easy wins.

Here are three ways it can get runs on the board.

With business screaming out for more staff, debate has turned to boosting Australia’s permanent migrant intake.

But a larger intake alone would do little to tackle widespread skills shortages because three-in-four migrants who are granted skilled visas are already in Australia. Even if a larger intake attracts people from offshore, more migrants will also add to demand, creating further need for workers.

One big benefit of a larger migrant intake would be a $38 billion revenue boost to federal and state governments combined over the next decade because skilled migrants pay much more in tax than they draw in government services.

But any increase in Australia’s permanent migrant intake must be paired with a renewed commitment to boost housing supply in our major cities, otherwise more migrants will mean higher rents for low-income Australians.

The summit should also focus on making it easier for companies to attract high-skilled migrants from abroad to hard-to-fill roles.

Low-hanging fruit

That means raising the minimum salary threshold for sponsoring temporary skilled migrants to at least $70,000, while allowing employers to hire temporary skilled migrants for jobs in any occupation, provided they are paid the same amount as Australians doing similar jobs. But proposals from the ACTU to raise the threshold above $90,000 a year risk cutting out many younger skilled workers who form the bedrock of permanent skilled migration.

Permanent employer sponsorship should be open to workers in any occupation provided they are paid at least $85,000 a year – median full-time earnings in Australia. This would better target visas to people with the most valuable skills, simplify the sponsorship process for firms and migrants, and offer a clearer pathway to permanent residency for many temporary migrants.

The other low-hanging fruit is making better use of our existing talent pool.

Australia has some of the highest levels of education for women in the world, but we sit at 38th place when it comes to women’s economic opportunities.

The high cost of childcare creates barriers for women to take up more paid work. Federal and state governments are rolling out initiatives for more affordable early learning and care. However, these policies will only help if we have the workforce to meet the growing demand for services.

Poor pay for educators is a major barrier to attracting and retaining workers in the sector. When an educator can earn more working at Bunnings, is it any wonder that half of those with relevant qualifications are not working in the sector after 10 years?

Making it easier to run equal remuneration cases at the Fair Work Commission and committing to support a pay rise for educators would help stabilise the sector and unlock increased women’s participation.

The other big barrier to women working more is the disproportionate share they carry of unpaid work.

Australia has some of the most gendered divisions of labour in the Organisation for Economic Co-operation and Development. Indeed, we lag only Japan and South Korea in the gap in hours of unpaid work done by women compared to men, and the mirror gender gap in paid work hours.

Australia invests less in paid parental leave than most other OECD nations.

Yet, there is growing evidence from other countries that more generous and gender-equal leave schemes are an important catalyst for greater involvement in care by men and work for women. A commitment to increase total leave to 26 weeks, with a six-week minimum for both parents in couples, could start to drive society-shaping change.

Take quick wins

Finally, despite recent gains in participation, older people are less likely to work in Australia than in many comparable economies.

Relaxing the age pension income test, as the federal Coalition proposes, could encourage older Australians back into the workforce, but would double-down on the already-generous giveaways to older Australians.

Therefore, loosening the age pension income test should be paired with a commitment to raise the superannuation preservation age from 60 to 65, which, over time, would at least double the workforce participation impact from the proposed policy, while saving the federal budget $7 billion a year by 2055.

The agenda for Thursday’s summit is meaty.

Prime Minister Anthony Albanese should take quick wins where consensus emerges. Fast action on migration and women’s and older-age workforce participation would show the government is serious about delivering an agenda that helps meets short-term challenges while also yielding a longer-term economic dividend.

Danielle Wood

Chief Executive Officer
Danielle Wood is the CEO of Grattan Institute, where she heads a team of leading policy thinkers, researching and advocating policy to improve the lives of Australians. She also leads Grattan’s Budgets and Government Program.

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Danielle Wood – CEO