AUKUS labor shortages tip of the iceberg: We need an ‘anti-industry’ policy now

With Australia, to use the succinct words of Malcolm Turnbull, “mugged by reality” on nuclear submarine construction by the United States, once again the implausible nature of the AUKUS agreement to deliver nuclear vessels to Australia is in the spotlight.

Part of the problem for the US construction program even before AUKUS was the extent to which labour shortages were slowing construction on new vessels. The Pentagon’s recent National Defense Industrial Strategy identified workforce shortages as a continuing problem and forecast the US would need an additional 117,000 workers over the next decade. Luckily, there’s the other AUKUS party, the Brits… except their defence and aviation sectors are plagued by a lack of skilled workers too. As is the French defence industry, from which we were previously attempting to buy boats. As is the rest of Europe.

The other problem never addressed in the AUKUS debacle was where we’d get the submariners to crew the nuclear boats from, as they require much bigger crews. There were already concerns we wouldn’t have enough crews for the French boats, based on recent years when Royal Australian Navy boats sat in drydock due to lack of crews, as part of a long-running problem of lack of Australian Defence Force recruitment.

Australia also faces a serious shortage of cybersecurity workers, in both government and the private sector, according to last year’s cybersecurity strategy.

But labour shortages are a problem right across the economy, not just in defence and the defence industry. We recently significantly increased remuneration for aged care workers in an effort to address decades-long workforce shortages in that sector — the aged care royal commission warned that we’d need an additional 130,000 aged care workers over coming decades just to maintain the existing, sub-standard system. This week’s aged care taskforce warned that changing demographics were “creating significant ongoing challenges to delivering quality care”.

Labour shortages in the broader health sector are not as bad as they used to be, but in regional areas, and in specific areas like mental health, there are serious shortfalls in skilled workers. The shortage of childcare workers is the biggest crisis in that industry. The health and care workforce is not only by far the largest employing sector in the economy but the fastest growing, and needs to continue to grow rapidly to keep up with demand from an ageing population and rising female participation.

The latest assessment of our infrastructure capacity released in December found a national shortage of public infrastructure workers numbering 229,000 and concluded the shortfall would persist above 200,000 for years to come. Last year, the engineering peak body warned of an emerging engineering skills crisis. Plans to accelerate the construction of housing to meet the ongoing crisis are plagued by labour shortages, with developers saying there just aren’t enough workers to meet government goals. The clean energy transition? That too will be plagued by labour shortages. Meanwhile, we’re regularly warned of a worker shortage in the agriculture and horticulture sectors (oddly enough, since they’re Australia’s most abusive and exploitive industries).

Despite many of our key industries facing labour shortages, policymakers are still stuck in a mindset that the benefit of any policy can be measured in the number of new jobs it creates and new industries it encourages. Labor is obsessed with a return to heavy and complex manufacturing, peddling the idea of subsidising our way to becoming a “clean energy superpower” and a battery manufacturer, along with wasting taxpayer money on building trains here that can be built far cheaper elsewhere. The Coalition, with its inane nuclear power policy, wants to embark on an entirely new industry we currently don’t have and don’t need.

Instead of politicians being allowed to talk about how many jobs will be created, the media should be challenging them on where the workers will come from. Will they simply rely on our female participation rate continuing to increase in defiance of demographic trends? Or will they rely on immigration? Every new industry policy and taxpayer-funded project should prompt the question “which country will you import the labour from and how many migrants will you need?”

In fact, instead of an industry policy, we need an anti-industry policy — one that identifies which industries we need to discourage in order to free up workers for defence, infrastructure, aged care, childcare, and for building homes. It could start with a commitment not to waste taxpayer money on pipedreams like nuclear power or battery manufacturing. Then it could identify industries that we need to shrink. Some suggestions:

• The gambling industry: In 2021, the Australiasian Gambling Council claimed gambling employed over 200,000 workers (in fact, they’re mostly bar and wait staff employed by pubs and clubs with gambling in them). Those alleged 200,000 people, freed up and retrained, could move to higher-paying, higher-skilled jobs in industries that actually add value to the Australian economy and society, rather than degrade it.
• The consulting industry: While currently shrinking due to the federal government turning away from relying on consultants, one source claims over 160,000 people work in consulting. Imagine freeing up over 100,000 skilled, tertiary-qualified workers for more useful activities than selling the same PowerPoint presentations and managerialist inanities over and over?
• Financial services: Financial services employs over 560,000 people. A substantial proportion of those, however, work in sub-industries that have inserted themselves between Australians and their money — financial advisers, bankers, dealmakers, brokers and other ticket clippers who extract substantial fees from our $3.5 trillion superannuation industry without providing any service of actual value — though that doesn’t stop them being lionised in the media.

The serious point behind this is that workforce shortages will be a persistent feature of Western economies going forward. But policymakers, and the media, are stuck in the past. “Where will the workers come from?” should be an issue for every policy idea peddled by politicians.

Which industries should be first on the chopping block for labour shrinking? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.