In the week the government axed the 457 skilled migrant visa, we've just learnt skill shortages in Australia are growing

Sydney traffic. Photo by Ian Waldie/Getty Images.

In a week when the political headlines have been dominated by the Australian government’s decision to abolish the 457 visa for skilled migrant workers — a move designed to put “Australians first” when it comes to finding employment — we’ve just learnt that an increasing number of Australian businesses are reporting difficulties in finding suitably-skilled workers.

According to the latest National Australia Bank (NAB) Australian Business Survey, the most reputable indicator in Australia on what’s happening in business sector, the proportion of firms reporting difficulty in finding appropriately-skilled workers hit the highest level since early 2012 in the first quarter of 2017.

Here’s the proportion of firms reporting difficulty in finding suitable staff, overlaid against the unemployment rate reported by the ABS. The former has been inverted by the NAB to demonstrate the past relationship between the two.

Source: NAB

“Firms are again suggesting that they have had greater difficulty in finding suitable labour, reflected in a clear trend within the NAB Survey measure since around mid-2015,” the bank says.

“Given the elevated rate of unemployment, that result suggests that even though the labour market remains fairly loose, there is a lack of workers with the right skills to match employers’ needs.”

That means that while Australian unemployment is currently at the highest level in more than a year, that may be partially due to unemployed persons not having the necessary skills required by businesses, rather than weakness in the broader economy that is generally associated with an increase in unemployment.

Speaking earlier this week on the decision to abolish the 457 visa program, prime minister Malcolm Turnbull said that it was important that businesses get access to the skills they need to grow and invest, announcing that it will be replaced by a new temporary visa specifically designed to “recruit the best and the brightest in the national interest”.

Turnbull said that in its current state the 457 visa had “lost its credibility”, perhaps prompted by concerns that it was being used as a stepping-stone by migrant workers to obtain permanent residency, something that the new visa will not permit.

Along with toughening the occupations and skills for migrant workers, Turnbull also said that he would establish a new fund to help train Australians to fill skills gaps.

According to the ABC, the government is likely to introduce a $300 million program to bolster skills for young Australians and redeployed workers in the upcoming federal budget.

“Money for the training fund would come from extra charges on employers seeking to employ foreign workers and would complement a wider focus on vocational and non-university skills training,” the report said.

Given that an increasing number of Australian firms are already reporting skill shortages, it’s little wonder that many are pondering whether the proposed changes will merely exacerbate that trend, at least in the short-term.

NOW READ: Malcolm Turnbull axes 457 visa program for skilled migration, saying he’s ‘putting Australians first’

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.