Working Paper No. 09-04

Working Paper No. 09-04

A 21st Century Solution to Skill Shortages in Australia

Victor Quirk

November 2009

Centre of Full Employment and Equity
The University of Newcastle, Callaghan NSW 2308, Australia
Home Page: http://e1.newcastle.edu.au/coffee
Email: [e-mail]

Abstract and outline.
This paper argues for specific, major, institutional reforms capable of building a highskilled internationally competitive labour force in Australia. It argues for replacing the current policy of maintaining labour underutilisation as a productivity driver, with a national system of counter-cyclical public sector employment (Job Guarantee) and skills formation infrastructure, organised on a regional basis. The first section introduces the issue of Australia‟s deficient skill formation capacity. Sections 2 & 3 summarise deficits in key labour market institutions, the Job Network and the tertiary education sector. Section 4 highlights the chronic failure of the private sector to provide supervised opportunities for novices to undertake skilled work . Section 5 argues that the state has a unique responsibility to act, while section 6 proposes necessary components of an institutional framework. The conclusion addresses the political question of opposition to full employment.

1.

Australia’s deficient skill formation capacity.

Skills shortages are now well recognised by Australian industry as compromising their ability to innovate and compete in global markets (AIG 2008, KPMG 2008).
68.1% of CEO respondents to an Australian Industry Group survey published in April
2008 said skills shortages had impacted on their business in the preceding year, and estimated that it would require 180,000 to 240,000 extra skilled full time employees to meet their needs (AIG, 2008:22-23). 60.2% of the firms reportedly affected by skills shortages said they were restricting their capacity to innovate (AIG, 2008: 28). Given that a minimum of 9% of

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