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9 May 2023
Australia’s building industry is still grappling with a shortage of skilled tradespeople, according to a report by the Housing Industry Association (HIA). The report analysed 13 housing construction trades and found that each trade is still facing a shortage, although the overall shortage has moderated since reaching a peak in June 2022. The worst impacted trades include bricklaying, carpentry, other trades, roofing, and ceramic tiling. The shortage is evident across all regions, with Regional SA and Regional Queensland being the most affected.
The shortage of skilled tradespeople has been driven by a backlog of housing projects and disruptions to skilled migration flows caused by the pandemic. The shortage remains despite the recent slump in new housing projects, which, combined with a return in net migration, is expected to see the trade shortages ease throughout the second half of the year. Despite the ongoing shortage, trade prices have stabilized since the middle of last year.
HIA Economist Tom Devitt says the shortage of trades will ease as more workers arrive from overseas, and the demand for and the supply of skilled tradespeople approach equilibrium again. Devitt also notes that the effects of consecutive rate hikes by the Reserve Bank of Australia (RBA) have yet to reach the Index. As the volume of work currently underway remains large, the RBA’s actions to date are expected to result in a more significant easing of the shortage of trades later this year, as well as some more declines in the prices of trades.
The shortage of skilled tradespeople is expected to ease over the remainder of the year, as more workers arrive from overseas, and the demand for and supply of skilled tradespeople approach equilibrium again. However, in the longer term, HIA Economist Tom Devitt says that the importance of both skilled migration and training should not be underestimated. Devitt notes that immigration policy needs to be integrated with an overall population policy and based on need as opposed to an artificial gap on permanent migration. This is particularly important as migrant workers will be increasingly needed as Australia’s population continues to age.
As for potential solutions, the HIA is pushing for several changes to boost the number of skilled tradespeople coming up through apprenticeships and improve apprenticeship completion rates and outcomes. The organization is calling for $100 million over three years to establish a national online resource to deliver an ongoing industry mentoring program for building apprentices. The HIA is also seeking the introduction of an apprentice wage subsidy program to assist employers in overcoming the productivity deficit and risk of taking on apprentices, particularly in Years 1 and 2. Additionally, they are seeking a new wage subsidy to offset the difference between junior and adult apprentice wages and to help provide adults with equitable access to apprenticeship training opportunities. Finally, the HIA is pushing for changes to enable apprentices to transfer the apprenticeship incentive between employers and retain the incentive should they move to a new host or employer.
A review released last week made 38 recommendations to overhaul Australia’s migration system. Potential reforms include abolishing the skills shortage list and enabling Jobs and Skills Australia to determine the occupations that are in need, boosting the minimum wage that can be offered to skilled workers on employer-sponsored visas, overhauling the points test that helps to determine which applicants are most desirable and establishing a pathway to permanency to ensure that Australia does not lose people on temporary skills visas when their visas run out. These changes, if implemented, could help alleviate the shortage of skilled tradespeople in the country.
In conclusion, the Australian construction industry is still facing a shortage of skilled tradespeople, which has been driven by a backlog of housing projects and disruptions to skilled migration flows caused by the pandemic. However, the shortage is expected to ease over the remainder of the year as more workers arrive from overseas. The HIA is advocating for several changes to address the shortage of skilled tradespeople, including measures to improve apprenticeship completion rates, wage subsidies, and a national mentoring program for building apprentices.