Business

The company counts the cost of labor shortages in Australia and New Zealand

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Australia and New Zealand’s decision to close its borders to non-residents during the pandemic has helped suppress Covid-19, allowing economic growth and corporate profits to exceed expectations.

But 15 months later, critics warn that these policies of the “hermit nation” are now causing significant problems for companies, which are facing severe skills shortages that raise costs and affect production.

Many industries advocate a relaxation of border and visa rules, even when the coronavirus-infected Delta strain urges authorities to tighten rules to protect the largely unvaccinated public of the two nations.

The booming agricultural and mining sectors in Australia, which have helped drive the economy out of its first recession in nearly 30 years, are among the worst. While in New Zealand restaurants and cafes face such critical staff shortages, they have staged a low-profile protest to put pressure on the government to relax visa rules for overseas workers.

Unemployment rates in the two Pacific nations have fallen rapidly due to government stimuli and the early reopening of their economies.

Australia’s unemployment rate hit a ten-day low of 4.9 per cent in June, although this could rise as a result of new Covid outbreaks this month. New Zealand’s unemployment rate is 4.7 per cent.

Lachlan Dobson, co-owner of Kimberley Produce, Western Australia’s largest banana grower, is one of thousands of farmers struggling to employ staff because most of the army of 40,000 foreign backpackers and seasonal workers are go home.

“We made the difficult decision to uncover only a portion of our crop rather than leave it to cause biosecurity problems, such as fruit flies,” said Dobson, who estimated the loss of produce at 1.4 million. of US dollars ($ 1 million).

Australian farmers have reported $ 58.4 million in crops lost due to labor shortages since December, according to National Lost Register of Cultures created by Growcom, an agricultural lobby group.

Western Australian miners say they could face a shortage of 40,000 workers in the next two years, threatening a sector that will contribute $ 83 billion to the local economy in 2019-20.

On Friday Rio Tinto cited “restrictions on the movement and availability of people” related to coronavirus as a factor contributing to weaker-than-expected production of iron ore in the three months to the end of June. .

This follows warnings from BHP, Mineral Resources and the Santa Barbara gold miner that the lack of skills in Western Australia increases costs and slows production.

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“What would have been a workforce squeezing through strong demand has become a squeeze because of Covid-19 restrictions,” said Paul Everingham, chief executive of CME, an industry lobby group. and resources.

Iron ore miners are chasing gold miners ’workers with the attraction of higher wages, says Everingham, who is putting pressure on the government to create new visas for foreign workers and explore ways to bring them into the country. .

He warns that action is needed to avoid the experience of the last mining boom in 2010-12 when wages and costs skyrocketed only to be followed soon after by a bust.

Most analysts say there is little prospect of Canberra easing border rules at low pressure due to coronavirus closures, which cover almost half of the country’s population after the outbreaks in Sydney and Melbourne.

Facilitating border restrictions for businesses is politically difficult with 34,000 Australians stranded overseas. And last week, tougher flight caps were imposed on arrivals, halving the number of passengers allowed to enter the country to just over 3,000 a week.

Health experts say Australian and New Zealand authorities are unable to reopen their borders due to Covid’s low immunization rates, with only 10.8 per cent and 11.7 per cent of the populations respectively vaccinated.

The Australian Treasury predicts that the international border will not reopen until mid-2022.

Meanwhile, Canberra and Wellington are lifting visa restrictions for foreign workers already working in their home countries to seek to retain as many overseas workers as possible.

New Zealand has also introduced a critical workforce scheme, which has allowed 17,000 skilled employees to enter the country to support businesses.

But until vaccination rates rise to levels approaching where band immunity will become possible, companies will likely have to rely on the assumption of an ever-decreasing pool of in-house workers, analysts say.

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