Home' Future Building: The Australian Infrastructure Review : July 2011 Contents futurebuilding 25
Volume 2 Number 1
Skills crisis at tipping point
shortages, and need to work as a team with industry
to create solutions. ‘There is also a need for clear,
transparent and reliable planning processes to
allow industry to assess the current state of demand
and to accurately forecast demand from major
projects in the development pipeline,’ he says.
‘Solutions that can be derived from a
collaborative approach between government,
industry, schools and our tertiary institutions are
most effective in a global, highly mobile economy.
This work has already commenced, with some
encouraging results through a range of state and
federal initiatives over recent years, including a
renewed focus on apprenticeships and internships.
An important starting point will also be greater
attention to mathematics, physics and science
in secondary schools, to ensure the talent pool
can easily transition to tertiary study in the next
The trouble is, Australia’s infrastructure sector
needs more help now – not just in coming years or
decades – to address short-term skills shortages.
Ridout says Australia needs a new approach to
the development of workforce skills, and argues
that population strategy is a key consideration. ‘The
task is enormous, and all options need to be on the
table,’ she says.
The critical question is whether workforce skills
can be developed quickly enough during a mining
boom and at a time when new infrastructure is
required to serve a growing population, while playing
catch-up on the existing backlog of road, rail and
social infrastructure projects. Plenty of anecdotal
evidence suggests it cannot.
Unaddressed, the long-term damage from the
skills shortage could be significant. Former Treasury
Secretary Ken Henry gave a chilling glimpse of
the effect that declining labour force participation
will have on the economy over coming decades,
in a speech last year that drew on the 2010
Henry said the proportion of the workforce with
the highest rates of labour force participation (aged
15 to 64) will fall from 83 per cent in 2010 to 73
per cent in 2050. A fall in labour participation was
a factor behind Treasury’s projections of average
annual GDP growth of 2.7 per cent over the next 40
years, compared with 3.3 per cent over the previous
40 years. Many will suffer if significantly slower
economic growth becomes a permanent feature.
The solutions are obvious: a small-population
country such as Australia needs higher levels of
skilled immigration and a bigger population to
offset falling labour participation rates in coming
decades. Better education and training will improve
Australia’s pool of skilled labour by upskilling the
existing workforce. But that alone will not offset
sharply lower labour force participation from
the country’s most productive workers in coming
The long-term solution requires a blended
response that includes early attraction of talent into
badly needed trades and professional disciplines – as
well as a sustained programme of skilled migration
to reduce the impact of an ageing population and
declining participation rate.
But in the short term, Australia must look at
an increased, expedited and streamlined use
of 457-style migration programmes to capture
Australia’s share of the global workforce.
Tony Featherstone is a former managing editor
of BRW magazine.
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