The pressure is on the Albanese Government in the upcoming Jobs and Skills Summit in September to address the skills shortage crisis that is hitting the motor industry hard. Executive Director Stuart Charity of the Australian Automotive Aftermarket Association describes the challenging situation,
“We went into the COVID-19 years already with skills shortages and then border closures, so we couldn't get skilled migration. Economic uncertainty meant that businesses weren't bringing apprentices through in the same sort of numbers and we've also had other sectors, like mining, poaching our qualified technicians.”1
The motor industry is struggling to find skilled workers, with an estimate of nearly 40,000 job vacancies across Australia, the majority of those being in the repair sector.2 This has resulted in customers waiting weeks and sometimes months for a service or repair. Small businesses are struggling under the demand, with not enough skilled workers available to make a profit.3 The competition for skilled labour is also driving the cost of wages up, coupled with the rising costs of inflation, which further adds to the pressures on the industry.
Businesses are doing what they can with their limited resources, but they are going to need the support of the Government. MTAA CEO Richard Dudley contends,
“Automotive businesses are doing everything in their power to address skills shortages. Almost without exception, auto businesses are paying well above award wages, they are incentivising remuneration packages and work-life arrangements, seizing every assistance measure and opportunity to hire. For example, the current apprentice subsidy contributes a near 40% increase in auto apprentices nationally. But it's not enough to overcome the gap filled by skilled migration.”4
So what can be done?
The long-term solution is the upskilling of Australian workers. We need reforms to support businesses to take on apprentices through tax breaks or subsidies that relate to the training and retention of apprentices.5 Action also needs to be taken in order to make apprenticeships more attractive to the younger generation, with the ability to fast-track learning and skills development.6
In the short-term, the answer has to be the hiring of skilled migrant workers. However, changes need to be implemented by the Government in order to streamline the process and make it more affordable and easier for small businesses to sponsor and hire migrant workers. Stuart Charity explains,
“The only short term solution is to get some skilled migrants in and we need to fix the system. We've got a situation where it takes between six and 12 months, or even longer, to get someone in it – which could cost up to $25,000 per employee…The system is so complex that it's almost impossible to navigate yourself. So you've got to use an immigration lawyer. There's got to be a better way to do this.”7
The Summit will be an opportunity for industry stakeholders to lobby the Government to make the automotive industry a priority and address the barriers to hiring skilled migrant workers. A crucial step for the Government is to add automotive roles to the Priority Migration Skilled Occupations List (PMSOL). The Government also needs to make it more affordable to sponsor overseas workers, such as decreasing the levies charged or subsidising the cost of getting legal advice. Removing the need for Labour Market Testing, at least in the interim to address the current shortages, would help reduce the delays in businesses being able to fill vacant positions. Dudley argues if the shortage of skilled workers in the automotive industry is not made a priority immediately, then it could hinder the nation’s economic recovery.8
We will await the outcome of the Jobs and Skills Summit in September. If you have inquiries into sponsoring an overseas worker, the MTA Workplace Relations Team can assist in providing resources to help you but we recommend seeking advice from Migration specialists.
[2] Skills shortage in automotive industry reaches 'crisis' levels, as businesses close - ABC News
[3] Ibid.
[4] MTAA_Media_Release_-_Skilled_migration_23_June_2021.pdf
[5] 4 Solutions to Address Automotive Skill Shortages (autorecruiter.com.au)
[8] MTAA_Media_Release_-_Skilled_migration_23_June_2021.pdf