Wage growth, skilled migration in focus as Australia kicks off jobs summit

SYDNEY, (Reuters) – Wage growth and skilled migration are set to dominate the Australian government’s jobs summit as Prime Minister Anthony Albanese urged compromises between employers and unions to tackle the country’s key economic challenges.

Amid widespread staff shortages and a clamour from businesses to raise the country’s immigration intake, Albanese on Thursday said Australia would create 180,000 more fee-free seats for students looking to gain technical skills in a A$1.1 billion ($752 million) package.The recently-elected centre-left Labor government is hoping to find solutions for soaring inflation and the fall in real wages during the two-day meet, with Albanese saying “compromises will need to be negotiated, sacrifices will need to be made.”

Even as Australian business groups and unions assembled at the national capital for the summit, Sydney, the country’s biggest city, is facing a protracted strike by train employees and protests by nurses seeking higher wages.Treasurer Jim Chalmers said the summit was being held at a “critical juncture” for the economy.

“This summit is just one step – a major step, yes, but one step. Our expectations are tempered and realistic,” Chalmers said.

The government will release the outcomes of the summit on Friday that will outline the immediate actions it would pursue.

Despite Australia’s unemployment sitting at a near 50-year-low of 3.4%, the central bank sees inflation heading to three-decade highs requiring further hikes in interest rates that would sharply slow growth. Wages are also rising but not as fast as inflation. A blowout in visa processing times in Australia has left about a million prospective workers stuck in limbo, worsening the acute staff shortages.

Businesses have been urging the government to raise the cap on annual immigration from 160,000. Chalmers said “that will be an important part of the conversation” during the summit.

“There’s an appetite to lift that in a responsible way,” he said. “But (that) should never be a substitute for training Australians for opportunities here as well.”