Economists and bank representatives have forecast bright skies ahead for Australia as various key economic indicators point to a strengthening economy and business confidence"

• The National Australia Bank Business Confidence Index rose 4 pts to plus 19 points in February
• Business Conditions rose 5 points to plus 8 points in both trading conditions and profitability
• Total Job Advertisements in Australian Newspapers rose 14.9%
• Total Job Advertisements on the internet rose 19.6%
• The National Australia Bank expects the reserve cash rate to rise to around 5.25% in by late 2011
• Close to 200,000 jobs created between August and January
• Unemployment rate at historically low 5.3%

After poor figures in January, the new figures are heartening. Warren Hogan, chief economist at ANZ is quoted in The Australian as having said “the economy was rebounding at a pace that few expected even as recently as a few months ago, and the Reserve Bank of Australia may need to back up last week's interest rate hike with a back-to-back one-quarter of a percentage point hike in April.”

The Australian Dollar received a boost from the positive news reversing an otherwise downward trend as traders responded to the expectation that the news would prompt further reserve bank cash rate hikes.

The share market also made gains on the news. The benchmark S&P/ASX 200 rose for the eighth consecutive day, closing up 12.2 points, or 0.3 per cent, at 4820.1.

These figures show Business Confidence in Australia at its highest levels in four months. But this must be taken in context of the global situation and as Wesley Legrand at Grand Private Equities was quoted in the Wall Street Journal as saying “The domestic situation looks good in isolation, but we have to see what global influences come to bear.”

Official employment figures are due for release on Thursday. When there is an increase in economic activity and a higher demand for skilled workers, the General Skilled Migration scheme allows foreign workers to fill skilled labour shortages. Workers who meet certain criteria can come into Australia on temporary visas or as permanent residents.
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The Hon Julia Gillard MP - Deputy Prime Minister, Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion released the new report on 5th March in an address to Skills Australia. The report was compiled by Skills Australia to advise the government on the best ways to meet the workforce demands of the Australian Economy.

Their stated strategy was that “Australia has the workforce capability it requires for a productive, sustainable and inclusive future, and that Australian enterprises have the capacity to develop and use the skills of their workforce to maximum advantage for the benefit of industry and the community.” The report identified a number of workforce threats and opportunities facing Australia which has an already long recognized major skill shortage which will be further exacerbated by

1. Economic recovery causing higher labour demands;
2. An ageing population reducing the labour force;
3. Localised labour hoarding; and
4. A lack of workforce participation.

In her delivery of the report Gillard acknowledged the role played by imported skilled labour in meeting some of the shortfalls but declared “The price of inaction then is demand for skills continuing to outstrip supply, an over reliance on imported skilled labour but enduring localised unemployment. This trifecta is absolutely not in Australia’s best interest.”

The government’s response has been three fold

1. Support for large infrastructure projects and localized projects
2. Local employment coordinators in high risk areas
3. Education and training in the form of the government’s self named “Education Revolution” promoting greater literacy, numeracy and vocational learning and the introduction of a new National Curriculum.

DIAC has not as yet made any publicised comments on the report or advised of any impact or policy changes it may have on Skilled Visa applications. We will keep you up to date if they do.

View the full Australian Workforce Futures Report

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