An increase in the Australian immigration numbers are needed to avoid a wages blowout as skills shortages increase across more sectors, business leaders have warned the government.

The current skills shortage in the resources sector is spreading to other industries, as many move to the more lucrative paid jobs in mining with more than $140 billion worth of resource projects coming online, mainly in northern Australia. Rio Tinto iron ore chief and executive director Sam Walsh said the resources industry has to be careful not create a situation where every electrician and plumber heads to the mining areas.

“As we move forward with $140bn of projects, there will be shortages in specific areas and there will be an overheating of the labour market — neither of those is good for improving Australia’s terms of trade or improving the basic economics of employment in this country,” he said.

Rio Tinto will need 6000 more workers in the next five years as the companies iron ore exporting capacity increases by 50 per cent.

Mr Walsh said the 457 Australian Visa program, under which skilled workers could work in Australia, needed to be made more flexible. “I’m not talking about a guest worker program; I’m talking about 457s providing more flexibility, providing a longer period.

If you really want somebody to uproot themselves and come and live in a remote part of Australia, three years doesn’t quite meet muster,” he said. The 457 Australian Visa is the most commonly used stream for bringing in overseas workers on a temporary basis up to three years.

The Business Council of Australia warned this week that wages pressure was emerging and that a 30 per cent wages surge in Western Australia’s mining sector
could lead to a broader wages increase as big remote-area mining and construction projects drain workers from the cities.

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