• The federal government has flagged that it wants to begin bringing in foreign workers to fill job vacancies, particularly in regional areas, with a parliamentary committee recommending it reserve space on flights for skilled migrants and loosen hiring rules.
• However, with 40,000 Australians still stranded abroad and unemployment still high, Labor MPs have slammed the Morrison government’s plan as”simply outrageous” and accused it of abandoning local workers as JobKeeper expires.
• With the government having focused much of its recovery effort on construction though, it may need to ramp up migration in order to absorb extra housing stock, according to property analyst Louis Christopher.
• Visit Business Insider Australia’s homepage for more stories.

As the Australian economy looks to be gaining momentum, so too is its migration debate over when the country should reopen to foreign workers and what role they should play in the recovery.

Unemployment is falling at an unexpectedly quick rate, dropping to 5.8% in February, according to the latest ABS figures published on Thursday. The progress appears well ahead of Treasury forecasting that had pointed to a 6% jobless rate by Christmas.

However, while boasting of that there were more jobs now than there were in March 2020, the Prime Minister said there were still large gaps in the labour force, including 50,000 jobs that can’t be filled in regional areas.

“We have seen that there are jobs, even when high rates of unemployment were in place during the pandemic, that Australians have not gone and done,” Scott Morrison told media on Thursday.

“That is a challenge which is holding the rest of the economy back and so it is not only impacting on those producers directly, but it is impacting on the broader working of the economy and is holding back job creation for Australians in so many other parts of the economy.”

Morrison acknowledged that previous government solutions had failed to fix the problem and encourage Australians to take up farm work. This has, at least in part, been the consequence of the sometimes abominable treatment of farm fruit pickers and others.

Some of those vacancies, Treasurer Josh Frydenberg argued, will eventually be filled by locals as the JobSeeker rate falls and Australians are forced to move interstate. The government also believe the termination of JobKeeper at the end of this month will also push people out into the regions, but acknowledges that foreign workers will ultimately be required.

“We are going to be looking obviously to the first opportunity to bring the skills into the country that we can,” Frydenberg said.

Jobs at risk but progress is being made

The idea is already facing staunch opposition with two million Australians either still out of work or not working as many hours as they’d like.

At the same time, modelling suggest the end of JobKeeper will forcing businesses to cut loose between 110,000 and 200,000 workers at the end of this month.

With some sectors, such as tourism, claiming up to 80% of their workforce will be let go, critics argue there there is too much potential slack in the labour force to risk bringing foreign workers so soon.

Whether these fears are miscalculated or on the money won’t be known until mid-June when the first official figures will quantify the full extent of the damage.

For now, strong hiring figures suggest progress is still being made, according to job site Indeed.

“The good news is that job postings have improved, against their baseline, for most of the ‘worst performed’ occupations over the past two weeks,” Asia-Pacific economist Callam Pickering told Business Insider Australia.

“Many of the ‘worst performing’ occupation groups also have job postings that are higher than their level pre-crisis, while others are only slightly down.”

Australia is divided over post-pandemic migration

The Morrison government nonetheless appears ready to forge on.

Coalition members of the parliamentary committee on migration handed down an interim report on Thursday, recommending “the Government reserve places on flights and in quarantine for skilled migrants” and that businesses no longer be required to advertise jobs locally before they can hire a foreign worker. Small business meanwhile shouldn’t have to meet any of the requirements known as labour market testing, according to the group.

Highlighting the stark divide, Labor members of the same committee issued a dissenting report slamming the report as “simply outrageous – ill-conceived and appallingly timed”.

“Astoundingly, while millions of Australians are searching for work, the priority for Government members is to put Australians at the back of the queue,” they wrote, arguing that the changes would encourage businesses to bring in foreign workers “virtually cost-free” rather than train locals.

They also slammed the proposal to reserve seats on inbound flights at the same time that 40,000 Australians remain stranded overseas.

“You couldn’t make this stuff up… government MPs seriously think this is good policy. Shame on them for selling out Australian workers and those looking for a job.”

Migration is set to become a major policy debate

While Canberra might be divided on path forward, migration is likely to start dominating policy conversations once again.

Just last week, Prime Minister Scott Morrison told the AFR Business Summit that temporary migration was necessary for Australia to recover in the years to come.

“Rather than taking Australian’s jobs, we need to instead appreciate how filling critical workforce shortages with temporary visa holders can actually create jobs elsewhere in the economy and, in particular, sustain growth and services in our regional economies,” he said. “This issue will not go away after the pandemic.”

In some ways, the Morrison government may have already forced itself into a corner. The Coalition has based much of its economic recovery around the building sector, with programs such as HomeBuilder having already created a construction boom, according to property analyst Louis Christopher.

“I think that absolutely the intent of the government is to ramp up migration, which will also help absorb a lot of the surplus stock that is going to be coming into the housing market due to the builder grants,” the SQM Research founder told Business Insider Australia.

“That might happen sooner than what you’ll expect. If we get the regional hub open with Singapore, and New Zealand, and perhaps other Pacific countries, we may well see that start to open up from mid year onwards.”

Australia is already missing somewhere in the realm of 200,000 migrants, having shut international borders for the last 12 months.

It’s a situation that planning expert Shane Geha says can’t continue much longer, comparing it being “seven kilometres offshore with one oar”.

“We need the population growth and the GDP growth, we need the skills base and we even need the unskilled base for agriculture and mining and tourism to also flourish. We really desperately need to find a quick solution to get migration going again,” he told Business Insider Australia.

“If this continues, the economy will simply stop. In the end, all the services that are filled by migrants, that man the lower end of the economy, in tourism, agriculture, restaurants, and hotels, they will all go, they will all disappear.

While both sides of the political aisle would recognise this, it’s just the timing that remains up for debate.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.