The reopening of the international border to double-vaccinated tourists and other foreigners will not only inject thousands of spending consumers into the economy, but help ease staff shortages in hospitality and farming, experts say.
Tourism operators expect less risk-averse younger backpackers and students to swiftly return to Australia and fill jobs in sectors experiencing chronic worker shortages.
The arrival of international tourists and other visa holders from February 21 will help make up for the loss of Australians who have been allowed to travel overseas since November 1 last year.
Australia’s unemployment rate is a low 4.2 per cent and the latest National Australia Bank business survey shows worker shortages are a major concern.
University of Melbourne demography professor and former government adviser Peter McDonald said he expected immigration levels to return to pre-pandemic levels “fairly quickly”, particularly through temporary visas.
“The hospitality-type industries like restaurants, where they want flexible workers, are going to benefit very much from working holidaymakers and students coming back,” Professor McDonald said.
“They work in unskilled jobs, but working holidaymakers and students are often highly skilled, so they have high levels of productivity.”
Economists in the government and Reserve Bank of Australia expect the targeted border reopening to help alleviate labour shortages in particular industries, while adding to consumer demand.
RBA research shows visa holders make up more than 10 per cent of the workforce in food trades and preparation, hospitality and cleaning.
The return of foreign labour should help fill skills gaps and might dampen wage growth in these industries.
The RBA is closely watching how the consumer demand and labour supply effects play out and the impact on prices and wages to inform its thinking on future interest rates rises, which RBA governor Philip Lowe said could “plausibly” begin later in 2022 or in 2023.
The government has said it would not use the reopening of the border to make up for lost ground in immigration levels, capping permanent arrivals at the pre-pandemic limit of 160,000 a year.
The government has been conscious not to be seen to be “opening the flood gates” because of political sensitivities over immigration in the lead-up to the federal election.
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