High airfares are fueling Australia’s labor shortage despite rising PR visas


The high cost of global travel at the moment is fueling Australia’s labor shortage, the country’s trade minister has said, with the jobs market the tightest in nearly 50 years as the Covid crisis s attenuates.

Trade and Tourism Minister Don Farrell said in an interview with Bloomberg News in Los Angeles on the sidelines of a meeting of Indo-Pacific trade ministers on Friday.

Since the country dismantled its strict pandemic border regime earlier this year, demand for such visas has been high, but would-be workers are deterred by “capacity and cost”, he said. he declares.

Expensive airfares are “a barrier to getting back to normal in terms of staffing,” Farrell said. A lack of flights, with airline capacity yet to return to pre-pandemic levels, is also deterring workers, he said. must somehow solve this problem.”

The minister ruled out the government subsidizing workers’ airfares, saying companies that relied on such employees received financial support during the pandemic to stay in business and retain staff. Many working travelers – known as “backpackers” – who filled labor shortages before Covid came from the United States and Europe, Farrell said, adding that the cost airfare from the United States to Australia had roughly tripled compared to the pre-pandemic period.

Travel demand has soared as countries lifted border restrictions, catching many airlines by surprise.

Tickets from the UK over the northern hemisphere summer rose by almost a third, according to online travel agency Kayak, while flights from Australia were around 20 % more in April than they were in 2019, according to a study by the Mastercard Economics Institute. At the same time, carriers have been reluctant to return their entire fleets to service in case the increase in demand is temporary. Rising fuel prices and inflation also played a role.

Restaurants cannot open

After closing its borders during the pandemic, Australia is now targeting migrants, raising its permanent immigration cap this month to allow 35,000 more workers to enter the country each year, up from 16,000 previously. The unemployment rate currently sits at 3.4%, the lowest in nearly five decades, and is expected to fall further even as the central bank continues to raise interest rates to cool demand and slow inflation. .

“There are labor shortages in almost every sector of the economy,” Farrell said Friday. “We can’t really recruit enough people to open, for example, restaurants.”

Before the border closed in 2020, nearly 400,000 international students and 250,000 holidaymakers worked in Australia each year, many of them in hotels and restaurants.

Farrell said he expects airfare compression to improve as airlines take on more planes, but that will take time. Qantas Airways Ltd. is seeking to remobilize a number of aircraft, he said, with many jets belonging to the flag carrier and other airlines parked in the central Australian desert as global travel has collapsed during the pandemic . The dry climate was ideal for storage and maintenance.

No Chinese tourists

Australia’s tourism industry has yet to rebound, he said, with lack of flight capacity being just one of the problems. China was once the biggest source of tourists, but its Covid Zero approach means borders remain effectively closed and Chinese are not traveling abroad.

Farrell said it also had an impact on Australia’s education sector, which relied heavily on Chinese students, especially colleges.

“I don’t believe we’re going to see a return to the top of Chinese tourism or education anytime soon,” he said. “We just have to accept the proposition that we are not going to see a return to what happened before the pandemic. What that means is that we have to speed up travel from other parts of the world.

Farrell was in the United States for a meeting with his counterparts from 13 other countries to kick off negotiations on the Indo-Pacific Economic Framework. The initiative, from which India withdrew, is an effort by President Joe Biden’s administration to deepen ties with Asian nations across a range of issues such as trade, climate change, supply chains, and more. procurement and taxation. It is also one of the US levers to counter China’s growing influence, although US officials have stressed that they are not asking partners to choose between Washington and Beijing.

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