- As global hubs like London and New York reopen, Australia risks losing its reputation as an attractive place for highly skilled workers, experts warn.
- While in the short term Australia’s approach has benefitted the economy and public health, a loss of people and investment could have long-term consequences.
- The pandemic has also shifted Australia’s pro-globalisation mindset, Natashas Kassam, director of public opinion at Lowy Institute, told Business Insider Australia.
- Visit Business Insider Australia’s homepage for more stories.
Mel had been planning to take the next step in her career in the US before the pandemic closed Australia’s international borders.
But in May this year, just as the US vaccine rollout began to ramp up, the 30-year-old Australian accepted an offer for a “dream job” in New York and uprooted her life, unsure when she would be able to return.
“When I left I thought that travel back to Australia would be possible at some point in 2022 and now it feels like that might not be possible,” Mel – who did not wish to share her real name – told Business Insider Australia via message.
“It might not even be possible in 2023, at least not in an easy way.”
Mel said she thinks there will be others like her who take the risk of being cut off from friends and family in Australia, particularly in light of many international global hubs reopening.
“Some of the best opportunities are overseas professionally,” she said.
Mel said this remained true, even amid the uncertainty of the pandemic — and the fact that the US vaccine rollout was leading to the country reopening strengthened her sense that opportunities would be greater there compared to here.
While migration of highly skilled Australian workers has occurred for decades, economists warn that a medium to long-term risk to Australian business will be a drain on talent if migration out of the country continues as borders remain closed to skilled talent.
New data published on Monday by Guardian Australia shows that travel exemptions for Australians applying to fly overseas have risen since the start of 2021, though it does not outline reasons applicants were leaving the country.
Guardian Australia analysis of Australian Border Force statistics found the number of Australians applying to travel overseas is surging, leading to an increase in exemptions despite efforts to crack down on unnecessary travel.
It showed 34,616 exemptions were sought in June, up from 23,836 in May.
The surge in Australian citizens and permanent residents seeking to travel resulted in 14,522 exemptions being granted in June, up from 11,879 in May.
The new insights into international departures comes following the publication of data by the Sydney Morning Herald around non-essential arrivals and departures, sparking a heated debate about how the international border is being managed last week.
The figures from the Department of Home Affairs, along with ABS figures showing a similarly high number of arrivals in May, led to clashes between state and federal governments around borders following new lockdown measures in June.
Risks to Australia’s ability to attract and keep talent
Economists warn that the losses for Australian business will come from the culmination of compounding factors; though they say it’s unlikely the impacts will be felt unless border closures extend past the end of 2022.
The government’s federal budget in May confirmed it did not plan to reopen the border until 2022.
Jeff Borland, professor of economics at University of Melbourne, told Business Insider Australia that he thinks most people would agree that until the country has reached an acceptable vaccination level, maintaining strict border controls is “the right thing for the economy.”
While labour shortages in areas such as tourism, hospitality and tech have certainly had an impact, the evidence shows that Australians spending locally actually added about 1.25% to GDP in 2020.
However he conceded that the risks increased the longer the border remained closed.
“The absence of skilled migrants starts to become a bigger and bigger problem,” he said, not to mention “the fact that people can’t travel here to do business, and that presumably starts to affect Australia’s linkages overseas.”
Richard Holden, professor of economics at the University of NSW told Business Insider Australia the country risks a collapse of “inward and outward migration” as a result of the delayed vaccine rollout.
“I think those two things are both very real,” he said, adding that in terms of potential losses “there’s dollars and there’s people.”
Longer term productivity gains come from businesses investing in people and equipment, he said, as well as people “investing in their own human capital.”
“If we get less of either or both of those things, because people don’t see Australia as an attractive place to come to, or an attractive place to stay, for their careers, or for investment…that’s going to be a big problem,” he said.
While this isn’t a measurable impact that will reveal itself this year or even next, the consequences of being potentially nine to 12 months behind much of the developed world’s vaccination program has “sowed the seeds for a slowdown,” Holden said.
He believes the long-term consequences will not necessarily be immediately measurable, but as a “shaking of confidence” for local and international talent in the idea of “Australia as a good place to do business.”
A turn inwards
Natashas Kassam, director of the public opinion and foreign policy programs at Lowy Institute, told Business Insider Australia the risks of Australia’s border closures may go deeper than the ability of businesses to attract and retain talent.
Kassam’s research showed a notable shift occurring among a minority of the population as a result of the pandemic.
She said in recent months the “fortress Australia mentality” had strengthened.
While Australians have traditionally been pro-globalisation and pro-free trade, Kassam said, even as the British and American public have “turned inward and become more protectionist.”
However in the past year she says her data suggest a shift that could influence the attractiveness of the country for both Australian talent and highly skilled migrants.
“I think there is a distinction where the vast majority of Australians support free trade and of globalisation,” she said.
“But the growing minority of Australians want more restrictive immigration policies and harder borders.
“And I think the contrast between those groups is really interesting.”