Housing barrier impacting NSW skilled worker demand

Skilled migration needs to double but not without affordable housing for them, Business NSW has warned in the lead-up to the state election in March.

Addressing these issues is crucial to avoid more than one in four NSW businesses ‘shutting” according to the industry advocacy group’s pre-election survey of 900 businesses.

The “scary” prediction from one-quarter of respondents is if the next NSW government “does nothing about the ‘cost of doing business’ crisis,” Business NSW has explained.

As part of its We Mean Business ‘election campaign’ launched on Tuesday (31 January), Business NSW said 43 per cent of its survey respondents identified housing as a barrier to accessing skilled workers whether in terms of availability or affordability.

It has thus called for increasing the skilled migration visa program intake from 15,000 to 30,000 with the next state government to “offer an additional 100,000 fee-free apprenticeships and 70,000 fee-free traineeships to boost skills here at home.”

The campaign policy platform is the culmination of member surveys, local and regional meetings, and consultation with the nearly 50,000 businesses that Business NSW represents, the entity confirmed.

Business NSW executive director David Harding said enterprises are still recovering from the pandemic.

“Businesses have been left on the brink because of factors including inflation at record levels, soaring interest rates, energy prices, insurance costs, changes to the industrial relations landscape and significant tax burdens,” Mr Harding said.  

“The challenges for NSW businesses are very real and many of these challenges are beyond the NSW Government’s control. But there is a lot that our state politicians can do. 

“The We Mean Business policy platform is one that, if fulfilled, will give the local hairdresser the confidence to hire a new apprentice and invest in their skills development.

“It will give manufacturers in Western Sydney the impetus to buy that new piece of kit that will help drive innovation.

“And it will give young entrepreneurs the inspiration to give birth to the next great start-up right here in regional NSW.”

Concerning statistics for NSW businesses

According to Business NSW — formerly the NSW Business Chamber and representing nearly 50,000 members — the We Mean Business campaign is demanding progress in areas including payroll tax, insurance premiums, housing, skills development, and manufacturing. 

Its recent survey revealed the following “concerning statistics”, it outlined:

• Thirty per cent of small businesses will have to close if the next NSW government does nothing to improve business conditions.
• Eighty-two per cent believe politicians in NSW are not taking steps to address the needs of businesses.
• Forty-three per cent identified housing as a barrier to accessing skilled workers (whether it is availability or affordability).
• Twenty-sox per cent considered the rising cost of doing business as having an extremely severe impact on their business by restricting it from operating at its full potential.

A time for demands to be met

Given the survey results, Business NSW has said it is time the next government also makes a commitment to:

• Ensure there is no increase in the tax burden for businesses in NSW
• Lower the payroll tax rate from 5.45 per cent to below 5 per cent and increase the threshold to at least $1.3 million
• Stop making employers pay for icare’s poor performance and reform the NSW workers compensation scheme to “fix the broken system”
• Deliver the natural gas production needed in NSW and “build the energy network to connect a minimum of 13GW of renewable generation by 2035”
• Establish an industry audit of manufacturing capabilities within the first 100 days after the election to strengthen NSW manufacturing capacity for critical goods with stronger supply chains
• Establish a $1.3 billion government-backed venture capital (VC) fund to nurture start-ups in NSW
• Grow the allocation of government procurement to small and medium businesses to over $10 billion per annum

Mirroring a national concern

The skills shortage and ability to house them in future isn’t entirely a state-based problem for NSW though.

Recent Australian Bureau of Statistics (ABS) data showed the total number of dwellings under construction reached record highs in the quarter ended September 2022 (Q3/22) of 244,479, an additional 0.6 per cent increase from the record in June of 243,078.

However, while the construction numbers have reached new highs overall, commencements have fallen.

In seasonally adjusted terms for the period, the total dwelling commencements fell 5.2 per cent to 45,489, the ABS explained.

Housing Industry Association (HIA) senior economist Tom Devitt commented on the results: “The number of homes reaching completion remains no higher than those being commenced with 29,177 new projects started in the September quarter.

“Supply constraints were holding back completion of these projects.

“Materials constraints have plagued builders over the last two years, but the shortage of skilled trades is the number one constraint on Australian builders.”

Mr Devitt warned that over 104,000 houses are still under construction across Australia, almost double the pipeline that existed in mid-2020.

He said new house commencements are expected to continue to decline into 2024.

[Related: HIA calls for tax reforms on housing]