Australia’s future requirements for labour will drive increases in demand for sustained and growing immigration. In an Occasional Paper, 'Population and Australia's Future Labour Force', released by the Academy of the Social Sciences in Australia, two of Australia’s leading experts on immigration and labour supply argue that strong demand for labour will be driven by rising living standards, the growth of the healthy aged population, the resources boom, construction of new infrastructure and changes in the ways we live our lives because of environmental and technological demands.

Between 1980 and 2005, Australia’s labour force grew by an average of 1.9% per annum, current growth is 1.2% per annum and, given demographic trends, the rate of growth would fall to 0.7% by 2021 and 0.5% by 2051 even if annual net migration remained at its present high level. The paper’s authors, Peter McDonald of the Australian National University’s Australian Demographic and Social Research Institute (ADSRI) and Glenn Withers, Head of the Economic Planning Advisory Commission in the previous Labor Government argue that future labour demand cannot be met without increased immigration. They go on to say that Australia is not well prepared for this new direction.

They recommend that the Australian Government should establish an independent inquiry to determine the best planning and policy approaches to the role of immigration in meeting future labour force needs for both skilled and unskilled labour. This should be part of, and extend, the skill planning for education and training recommended above with domestic population needs and opportunities being met as a co-condition for immigration policy. Among other recommendations, McDonald and Withers call for a forward-looking population policy that incorporates both domestic population growth and migration, acknowledges their impact on Australia’s economic, social and environmental goals, and design population and complementary strategies accordingly. Complementary polices should include education and training, infrastructure and housing, and energy and the environment. Strict limits on general unskilled worker entry to Australia should be maintained, whether on a temporary or permanent entry basis, but a tightly administered and pro-development Pacific Compact for small island nations should be developed that facilitates movement into Australia along with essential complementary labour and business development policies.

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Paper - 'Population and Australia's Future Labour Force'