Regional Australia hit the hardest by worker shortages, new report shows

Australia’s unprecedented worker shortage crisis is a handbrake on vital economic growth, with communities in regional Western Australia and regional Queensland most heavily impacted, Saxon Davidson, Research Fellow at the Institute of Public Affairs (IPA) has commented.

Mr Davidson’s comments were made in line with the release of an IPA geographic analysis of worker shortages across Australia, measuring the severity of worker shortages across 35 geographic zones. 

The report found that:

• Four of the five geographic zones most severely impacted by worker shortages are in regional Western Australia and Queensland.

• Removing red tape and tax barriers preventing pensioners, veterans, and students who want to work from entering the workforce would potentially decrease job vacancies by at least 62 per cent in each geographic zone across the country.

• The federal government’s pension work bonus reform, introduced in December 2022, has failed, with job vacancies declining by only three per cent, and the number of pensioners in the workforce has increased by only 0.1 per cent since implementation.

“Critical industries across regional Australia are being hit the hardest by Australia’s unprecedented worker shortage, yet our city-based political leaders continue to act as if the problem does not exist,” Mr Davidson continued.

“It is beyond time that the federal government finally removed all tax and red tape barriers currently preventing pensioners, veterans, and students from working. This would create more jobs and more government revenue without placing further pressure on social and economic infrastructure.”

Previous IPA analysis has also established that the worker shortage crisis is costing Australians $32 billion in foregone wages, and the federal government $7 billion in lost income tax revenue.

“This is revenue that could be invested in roads, schools, and hospitals, or be used to help pay off our spiralling national debt to the benefit of all Australians,” he added.

“Instead of taking the lazy approach of committing Australia to a record migration and international student intake over the coming period, which will put further strain on housing and failing infrastructure, the federal government should be focused on getting more Australians into work.”

To download the IPA’s research, click here.