Australia sees an opportunity in global crisis

SYDNEY: Australia is reconsidering its seduction of skilled migrants as the jobless rate rises at home, yet analysts see sound economic reasons to keep the flow of workers coming and even opportunity in the firing frenzy abroad.

The tidal wave of global job shedding could be a rare opening for Australian recruiters to tap top talent and plug skill shortages that have plagued business here for years.

“There’s going to be an extraordinary pool of experienced people looking for work and a real chance for Australia to fill gaps in sectors like health and engineering, which are crying out for them,” said Stephen Roberts, an economist at Nomura.

“For economists, the case for skilled migration is cast iron, but as unemployment creeps higher, policy makers will surely come under pressure to cut back, and that would be a shame,” he added.

Economic success has turned Australia into a major importer of people. Eighteen years of uninterrupted economic growth has generated a serious need for labor – everything from bricklayers to brain surgeons.

And being twice as big as India but with just 2 percent of the population, Australia is not short of elbow room. Which is why Australia’s annual intake of skilled migrants has more than doubled since 2000, so that it takes more per capita than any other developed country, apart from Canada.

As recently as May it announced plans to take a record 133,500 skilled migrants in the fiscal year that will end in June, a bold target for a country with a work force of only 10.7 million.

The influx of newcomers met little opposition as the economy expanded strongly and the unemployment rate fell to a three-decade low of 3.9 percent last year.

But the global recession has changed all that. The jobless rate is already at a two-year high of 4.5 percent and is expected to hit at least 6 percent by the end of the year, so pressure to shut the doors to foreigners can only grow.

Sensing trouble ahead, the Labor government said last month that it would review its migrant intake. The immigration minister, Chris Evans, said that cuts would be modest at first but made it clear that the government was sensitive to any souring in public opinion.

“There’s no doubt in my view that there’s a strong link between the economic cycle and people’s attitude towards immigration,” Evans said.

Australia has been less than open in the past. From 1901 to around 1973, it restricted nonwhite immigration so much that it became known as the White Australia policy. There was a flare-up of anti-migrant feeling in the late 1990s when the One Nation party ran on a platform of restricting Asian migrants, though it never really gained traction.

The opposition Liberal/National coalition also intends to make jobs its main line of attack this year, ensuring that unemployment stays in the headlines.

Still, an outright political attack on immigration seems unlikely, as the opposition is traditionally the party of business, and business is all for skilled migration.

“We think it would be very foolish to react in a knee-jerk fashion and just slash the migrant intake,” said Nathan Backhouse, manager of trade and international affairs at the Australian Chamber of Commerce and Industry.

“Many industries are still desperate for trained workers and we will be advocating strongly that migration levels be maintained,” he said.

In fact, Backhouse was optimistic that the government had essentially accepted the case for continued high levels of migration, choosing instead to focus more on the skills that had been in truly short supply.

That is because just five occupations, including cooking, accounting and hairdressing, took up half of all the visas granted in the past three years. No fewer than 28,800 accountants came down under, compared with only 300 sorely needed carpenters.

Now 60 occupations ranging from health care to computing, construction and engineering would be put on a new “critical skills list” to receive preferential visa treatment.

These migrants are in such demand that they are either sponsored by an employer or can walk into a position right off the plane, making it hard to argue that they are stealing jobs from locals.

And the talent available abroad should be better than ever, with many of the world’s leading companies cutting staff. Even technology giants like Microsoft and Google are considering layoffs and a lot of highly educated finance professionals are going to be looking for entirely new careers.

Such migrants also tend to be well paid, adding to consumer spending, housing demand and tax receipts in Australia.

A study by the consulting firm Access Economics estimated last year that the 2006-2007 migrant intake would benefit government finances to the tune of 535.6 million Australian dollars, or $356.5 million, rising to 1.2 billion dollars a year within a decade.

Even if unemployment rises in the short term, Australia, like many developed countries, still faces a looming shortage of workers, with four million baby boomers set to retire by 2025.

Australia’s working-age population usually grows by about 180,000 every year, but trends already in place mean growth could be just a 10th of that through the entire 2020s.

Already the average age of workers on oil rigs is 55, while that of electrical engineers in mining is 53.

“We hear endless complaints from firms about the lack of suitable labor, and that’s not going to change, even if unemployment rises a couple of points,” said Rob Henderson, the chief economist at nabCapital. “The sensible thing to do is to maintain the migrant intake. We’ll just have to see if policy makers keep their nerve.”

By Wayne Cole, Reuters,Monday, January 19, 2009