Albanese Government

Albanese Government’s Response to Labour and Skill Shortages

Labour skills shortages are continuing to slow the process of Australia’s post-pandemic recovery. 

Australia’s skill shortages have become a persistent problem since the global shutdown and continue to be a key issue for the Australian manufacturing industry for both state and territory level.

Current labour market rating, around 850,000  Australians are employed within the manufacturing sector and there is a high demand for more employees with skills priority list.

The years 2020-2021 saw a skill shortages in overseas migration in every state due to the pandemic. However, reopened borders mean migration is set to increase and alleviate some pressure placed on the employment of current labour market rating.

To assist with the kick-start of the job market, the incumbent Labor government has promised change and subsequently announced its plans to address the skilled migration and visa backlog that is slowing the process of economic recovery for the future demand rating and promises for subsequent government policy responses.

Read more about how the industry’s employment projections and how DayJobs can help you here.

Albanese Government Announcement 

In his first National Cabinet meeting, Anthony Albanese announced plans to amend the skilled migration and a visa backlog.

The Prime Minister acknowledged the need to assist companies struggling to run their businesses due to labour skills shortages. 

The Labor leader said there is an “extraordinary backlog” of visas. He continued to announce that some skilled visa applicants have been waiting between 12 to 18 months to be able to join the workforce, negatively affecting all stakeholders.. 

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Premiers in Western Australia and South Australia have voiced their concerns about labour shortages and the impact it has on the state’s economies,  noting that skilled migration is key to economic recovery in relations to the labour market analysis.

South Australian Premier Peter Malinauskas said, “there needs to be a reopening of skilled migration as a country.”

As the manufacturing industry contributes around $100 billion to the Australian Gross Domestic Product (GDP) annually, a further skills shortage could see a cataclysmic impact on the nation’s economic growth and in the Australian labour market.

Due to this, it is at the forefront of the Albanese government’s agenda. 

Mr. Albanese has suggested more short-term migration to fill the supply and demand gap in Australia skill shortages for future demand rating and for national skills needs.

Australia’s Push to Address Skills Shortage: A Focus on Visa Backlog and Domestic Manufacturing

The Australian Bureau of Statistics reported that the the unemployment rate for April 2023 was 3.7%.

Current labour market data analysis, 140,000 skilled visa applications are waiting to be processed, according to the Department of Home Affairs.

To remedy this, the Albanese government has temporarily moved staff into the department to help clear the backlog of visa applications and skill shortages.

Immigration Minister Andrew Giles says processing the “backlog” of visas is at the forefront of the Albanese government’s plans to help the economy recover from the Australia’s skills shortage.

Mr Albanese has also recognised the skills shortage in manufacturing over the past few years and has vowed to “rebuild” and domesticate the industry for skilled workers such as personal service workers and construction managers.

Future Projections

Workforce Share in Manufacturing

The manufacturing industry accounts for approximately 6.3% of Australia’s workforce.

Employee Numbers (2019-2021)

The Australian Parliament data indicates that from February 2019 to February 2020, the number of employed people in the manufacturing sector increased from 866,000 to 922,800. However, from February 2020 to February 2021, there was a decrease to 902,000 employees, a 2.3% drop. This doesn’t exactly match the mentioned figures of 14,000 fewer employees in 2019-2020 and a recovery of 9,000 more staff in 2020-2021.

Labour market data analysis claim about a decrease in employment is substantiated by ABS data showing a 1.3% or 11,600 workers’ reduction in manufacturing employment over the year to August 2020.

Structural Steel and Welding Growth

There is a projected growth of 2.1% in Structural Steel and Welding for the next year, according to the Labour Market Insights. This opens for more trades workers and opportunities for training funding as well as apprenticeship incentives for suitable applicants.

Funding and Resources for Recovery

  • The Albanese Government has passed a $15 billion manufacturing fund to help the Australian workforce.
  • In the 2022-23 budget, an additional $750 million was invested into the Modern Manufacturing Initiative, along with $200 million as part of the Regional Accelerator Program to bolster the industry.
  • The government committed $15 billion to the National Reconstruction Fund to support the manufacturing sector, marking one of the largest investments in manufacturing in Australia’s history.
  • Additionally, $500 million in unspent manufacturing grants were redirected to a $15 billion industry fund by the Albanese Government.


The Albanese Government has taken proactive measures to address the persistent labour and skill shortages that have been hampering Australia’s post-pandemic economic recovery. Recognizing the significant role of the manufacturing sector in the nation’s economy, the Albanese government has prioritized clearing the visa backlog to facilitate skilled migration and boost employment.

If you are open to sponsoring international employees, Dayjob will source applicants and assist with the entire process – from screening interviews to visa applications. If you have any questions about our service, please take a look at our website or contact our friendly team here

Interested in how we can support your role as an employer? Click below to learn more.

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