No time to waste in solving long-term

Tasmania’s unemployment rate is low, but there are some worrying trends and we cannot afford to rest on our laurels, argue Cedric Hodges and

LAST week’s labour force data released by the Australian Bureau of Statistics for September 2021 showed that Tasmania’s unemployment rate is 4.8 per cent – nationally, this figure is 4.6 per cent – odd when much of the country was in lockdown in September.

It’s not easy to tell how the labour market is performing in a pandemic. Temporary lockdowns often see hours stripped back, rather than people losing jobs. And those who do lose their jobs are confined to their living room, so they won’t necessarily be looking for work, meaning they are excluded from the labour force statistics.

An array of indicators are useful to test how a labour market is performing. In Tasmania, employment sits at a record high. The number of those working full-time is elevated by historical standards. Underemployment is also low – Tasmanians are more satisfied with the hours they’re working than they have been for a long time. Tasmania’s labour market is performing a bit better than the unemployment rate may suggest.

Currently, job vacancies sit at near-record highs, and almost one in five Tasmanian businesses expect to increase staff in the near term.

But advertising for work is one thing, getting the right worker is another. Since Covid began, businesses have been grappling with a lack of suitable applicants, indicating a skills mismatch in the labour market.

This isn’t exactly a new issue for Tasmania. Our labour pool is small, and historically we have relied upon those beyond our borders (both interstate and overseas) to provide specialist skills and prop up the state’s labour reserves.

In fact, before Covid, interstate and overseas migration accounted for roughly 80 per cent of our total population growth for the year – providing direct access to new (and in many cases) highly skilled workers. But with borders largely shut, we are learning the value of the saying “you don’t miss something until it’s gone”.

Employers are missing out on suitably skilled applicants and struggling to fill vacancies. Local businesses are missing out on the extra demand generated by new migrants. We are missing out on future capacity from our workforce

as migrants (who are generally younger) contribute a muchneeded shift in our age profile.

Tasmania has the highest proportion of residents aged 65 and above in the country – currently more than 20 per cent of the population – as older Tasmanians retire, we have fewer and fewer workers available to replace them.

But getting young people to either stay or come to the state has proven difficult. When times are tough, the easy response is to leave our shores in search of better opportunities. This created a real ‘brain drain’ on the economy, particularly in certain periods in the 1980s and 1990s.

Since 1975 Tasmania’s population has grown by more than 130,000 people – yet, we have fewer residents aged between 15 and 34 now than we had back then. And with overseas migration shut off (and interstate migration not picking up the slack), things aren’t exactly getting better.

However, there are many ways we can shift our population narrative and lower our reliance on others to fill the labour market void. But doing it in a way that maximises both economic and social outcomes is tricky – a balance needs to be struck between bringing additional people into our state and doing so without overheating parts of the economy. For example, house prices are (arguably) unsustainably high in some areas, and a sudden population increase could make things even worse.

We need to grow our population in a targeted way. For the immediate term, the state’s best bet is by attracting interstate workers seeking a tree-change. Longer-term, the best remedy is the creation of meaningful jobs that keep more young people here.