Employers crank up pressure for reform

PREDICTIONS of economic capacity constraints and rising inflation have renewed business pressure on Julia Gillard to make bold reforms.

Business groups have focused on tax and welfare impediments to work and better targeting of skilled migration.

Business Council of Australia chief executive Katie Lahey said the projected strengthening of Australia's economy -- to an above-trend rate over the next two years -- highlighted the importance of pressing ahead with bold reforms.

Australian Chamber of Commerce and Industry economics director Greg Evans called on the government to re-examine tax and welfare disincentives to entering the workforce and better targeting of the skilled migration program to address skills shortages.

The calls come ahead of a speech today at an AiGroup function in Sydney at which Immigration Minister Chris Bowen is expected to announce immigration points system changes that shift the emphasis to high skills and employee sponsorship and make it harder for overseas students with low-quality local qualifications to secure permanent residency.

The business calls follow the mid-year economic and fiscal outlook, released by Wayne Swan on Tuesday.

They predicted a fall in unemployment to 4.75 per cent in the June quarter next year and to 4.5 per cent in the June quarter of 2012.

With the economy reaching capacity, inflationary pressure was tipped to increase.

Mr Evans said it was important to look at all opportunities to improve workforce participation, such as cutting income tax to encourage people into the workforce and reskilling workers.

He said it was also important that skilled migration was targeted to deal with industry demands.

Skills shortages were emerging in the resources industry, engineering, construction and hospitality.

Minerals Council of Australia chief executive Mitch Hooke said a robust skilled migrant system would be needed as unemployment declined.

"Any attempt to artificially cap or limit skilled migration, rather than allow economic forces to determine the intake, would be a retrograde step," he said.

A more market-responsive vocational education and training sector and greater efforts to promote indigenous workforce participation would also help Australia meet skills challenges.

Mr Bowen said yesterday Labor's migration reforms had delivered sustainable immigration while responding to labour market needs.

Opposition immigration spokesman Scott Morrison said greater workforce participation was a key target

Source:http://www.theaustralian.com.au/national-affairs/employers-crank-up-pressure-for-reform/story-fn59niix-1225951401981