CANBERRA, AAP – Skills shortages are top of mind for business owners who vote as Australia’s jobless rate eyes fresh lows and vacancies go unfilled.

Closed borders have added to the skills gaps that Australia faced before the pandemic, and pledges of job creation are ringing hollow across the campaign trail for many.

The latest Australian Institute of Company Directors (AICD) sentiment index released on Thursday shows labour shortages are a top economic challenge.

Some 60 per cent of directors nominated skill shortages, followed by global economic uncertainty and climate change.

“Skills is an area that is critical in this campaign, and in this economy,” AICD managing director Angus Armour told AAP.


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Technology across all industries, small professional firms, health care, aged care and hospitality face significant gaps, according to directors in companies, charities and other organisations.

“Small businesses and big business are facing serious skills shortages,” he said.

Mr Armour said one business services firm spent more than a year trying to fill one vacancy, and thousands of dollars building a case with immigration officials, but were rejected because the skilled Canadian they wanted to bring in was over 35.

“Immigration is only one part of the answer, and it’s an important part particularly for short-term gaps,” he said.

“But we continue to miss the trick in terms of educating Australians in ways that will given them sustainable work in the future.”

For Labor, the answer is more vocational training and a stronger university system.

Labor’s plan for fee-free TAFE for students studying in industries with a skills shortage includes 45,000 new places.

Some 20,000 extra university places are pledged over 2022 and 2023, with a priority on skills gaps in clean energy, advanced manufacturing, health and education.

Prime Minister Scott Morrison has pledged 1.3 million jobs will be created within the next five years, and has plans for advanced manufacturing, critical minerals and digital transformation.

“My priorities are jobs, jobs, jobs, jobs and jobs,” he said in Tasmania.

Wooing bosses at a business lunch in Western Australia, where resources firms are battling skill shortages, Mr Morrison said Australia must build up the skills of its own population.

“That’s why we are investing so much in training,” he said.

Steve Coughlan, one of the founders of international mining contractors Byrnecut Group, asked how Australia could compete for more skilled migration when the resources industry was facing shortages globally.

Mr Morrison said immigration would pick up as Australia moved out of the pandemic, and there would be more opportunities for skilled migration, particularly in the west, but it would take time.

“I’m hoping to see more people moving internally within Australia,” he said.

Chamber of Commerce and Industry WA (CCIWA) chief economist Aaron Morey says there are labour shortages across the regions and in the metro area, and trades roles remain in high demand.

Nine in ten businesses in the Pilbara, Mid West/Gascoyne and Great Southern regions cited skills shortages as a barrier to their growth, according to the latest CCIWA survey.

Businesses in these regions continue to face difficulty attracting both seasonal and skilled workers.

COVID-19 isolation requirements are creating additional challenges for businesses looking to fill rosters.

Almost two-thirds of regional WA businesses are responding to the labour crisis by training additional staff, including taking on trainees and apprentices, and 60 per cent are boosting wages, CCIWA found.

The National Skills Commission’s March Internet Vacancy Index has recorded an increase in job advertisements across all occupational skill levels for the third consecutive month, to stand at 282,400.

Online platform SEEK says jobs ads hit the highest level in SEEK’s 25-year history in March, and are almost a third higher than a year earlier, but applications per ad are declining as demand outstrips talent.

The official jobless rate for women dropped to 3.7 per cent in March, the lowest since May 1974.

For men it was steady at 4.2 per cent, the second lowest level since November 2008.

In the short term, the Australian Chamber of Commerce and Industry (ACCI) says further easing of close contact isolation rules for household contacts in NSW and Victoria will ease workforce shortages.

ACCI chief executive Andrew McKellar says acute staff absenteeism has continued to place a significant burden on businesses, alongside the worst worker shortage in almost 50 years.

The International Labour Organisation, an agency of the United Nations, says many countries are experiencing a persistent skills gap.

A “skills anticipation” strategy is recommended to prepare for future needs.

Such a strategy would involve training providers, young people, policymakers, bosses and workers getting access to better educational and training choices.