Counting the cost of labor shortages in Australia and New Zealand

The decision by the nations of Australia and New Zealand to shut their borders to non-residents during the pandemic has helped suppress Covid-19 and enabled economic growth and corporate profits to beat expectations. However, 15 months on, critics warn that these “closed-off” policies are now causing significant problems for businesses, which face worsening skills shortages that are raising costs and affecting output.

Many industries are advocating a relaxation of border and visa rules, even as the highly infectious Delta strain of coronavirus prompts authorities to tighten rules again. The booming Australian agricultural sector, which has helped the economy come out of its first recession in almost 30 years, is among the worst affected. In New Zealand restaurants and cafés face such critical staff shortages they recently held a nationwide protest to lobby the government to relax visa rules for overseas workers.

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

Australian farmers have reported A$58.4m in crops lost because of labor shortages since December, according to a National Crop Lost Register set up by farm lobby group Growcom.

Easing border restrictions for business is politically tricky with 34,000 Australians stranded overseas. And last week, tougher flight caps were imposed on arrivals, which halved the number of passengers allowed to enter the country to just over 3,000 a week. Health experts say Australian and New Zealand authorities cannot reopen their borders yet because of low Covid immunisation rates, with just 10.8 per cent and 11.7 per cent of the respective populations fully vaccinated.

According to, Australia’s Treasury forecasts that the international border will not reopen until at least mid-2022.

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Source: Fresh Plaza