Why wages are set to soar in some sectors as Australia's border remains closed

Wages are set to soar in some sectors as Australia’s border remains closed to foreigners, a funds management boss says.

National job vacancies in March soared to the highest level in more than 12 years with advertised positions almost doubling since the first Covid lockdowns a year ago. 

Some industries had above-average increases in new jobs with demand for health professionals and therapists surging by 110.9 per cent, the federal government’s National Skills Commission revealed.

Dr Shane Geha, the founder and managing director of funds manager EG Group, said doctors and transport and logistics professionals were likely to see better-than average pay increases as skilled migrants were kept away until at least October 2021.

‘Those skills would now increase because of the increased need,’ he told Daily Mail Australia. 

Wages are set to soar in some sectors as Australia’s border remains closed to foreigners, a funds management boss says. Demand for health professionals has doubled during the past year. Pictured is a stock image

Without overseas backpackers, consumers are also set to pay more as agricultural businesses struggling to recruit sufficient fruit pickers or farm hands.

‘There will be a very serious danger to the economy if migration is not looked at much more seriously in a very quick period of time,’ Dr Geha said. 

‘We’ve got states that are crying out for international visitors, itinerant workers for the agricultural sector and we can’t accommodate them at the moment because neither our quarantine rules nor our open-mindedness allows it. 

‘We’ll pay more for fruit and meat, we might up end paying more for a lot of things.’ 

Dr Geha, who is also  the continued closure of Australia’s border into 2022 would be economic crippling as tourists and international students were kept out of Australia.

‘We basically have to have the economy firing,’ he said.

‘If mining and agriculture weren’t still our two biggest export earners, the two or three next big sectors – housing, international students or education and tourism – have all suffered enormously due to the border closures.’ 

Without overseas backpackers, consumers are also set to pay more as agricultural businesses struggling to recruit sufficient fruit pickers or farm hands. Pictured is an orange harvest at Griffith in southern New South Wales

Australia’s unemployment rate in March fell to 5.6 per cent as struggling sectors like hospitality continued to receive JobKeeper wage subsidies. 

With businesses no longer getting help Dr Geha, an expert in urban planning and an adjunct professor at the University of New South Wales, said the jobless rate was likely to rise back to the 7 per cent levels hit during the early months of lockdown.  

‘Unemployment I think will rise. At the moment, it’s very well managed in the fives but it might go to six or seven or perhaps higher,’ he said.

‘I would say unemployment could even rise higher than 7 per cent.’

Dr Shane Geha, the founder and managing director of funds manager EG Group, said transport and logistics professionals were likely to see better-than average pay increases as skilled migrants were kept away until at least October 2021. Pictured is a forklift driver in Melbourne

In July, shortly after the first wave of lockdowns, Australia’s jobless rate hit a 22-year high of 7.5 per cent. 

While some professionals are set to benefit from the skills shortage, overall wages last year only grew by a measly 1.4 per cent.

The wage price index, as measured by the Australian Bureau of Statistics, hasn’t been above the 3 per cent mark since early 2013 and Dr Geha said pay rises across the economy would be unlikely to speed up as the border remained closed.

Sydney, even more so than Melbourne, has suffered most from the border closure.

‘If New South Wales doesn’t go well, Australia won’t go well,’ Dr Geha said.