High Welfare in NSW Is Encouraging the Labour Shortage: Hospitality Minister

'We paid them too much to stay at home'

A homeless person sits on the pavement in Melbourne's CBD in Victoria, Australia on June 4, 2021. William West/AFP via Getty Images

Candidates for the Labor and Greens parties for a regional seat in New South Wales (NSW) both acknowledged they didn’t know how to fix the labour shortage, while the National MP attributed the problem to unmotivated workers who are paid “too much to stay at home” by the state.

The comment was made ahead of the NSW state election at the Meet the Candidates public forum held by the Tamworth Business Chamber on Feb. 27.

An audience submitted a question about the shortage of skilled labour, which has been putting pressure on wages, stifling business growth, and delaying the completion of housing projects in regional areas. The question also pointed to the regional workforce cap of 11,200 per annum.

“Businesses are currently utilising those cap places but using existing or external recruiters and support. It costs them about $20,000 per placement,” the question read. “We need more people, we need solutions. What do you got?”

The 'Meet the Candidates' public forum was held in Tamworth, New South Wales, Australia on Feb. 27, 2023. Tamworth Business Chamber/Facebook

Centre-left Labor candidate for Tamworth Kate McGrath replied that the question is “really specific.”

“I don’t know enough about that space to give you a decent answer, but I’m absolutely happy to find out,” McGrath said. “Can I take it on notice,” she told the host before asking for an email list of people attending the panel.

Kate McGrath is the Labor candidate for the seat of Tamworth, New South Wales, Australia. Kath McGrath/ Facebook

Left-wing Greens candidate Ryan Brooke followed suit, saying he thought it was a “very specific question” and didn’t think he had “enough knowledge offhand to give a satisfactory answer.” He promised to get back to them.

Ryan Brooke is the Greens candidate for Tamworth in New South Wales, Australia. Ryan Brooke/The Australian Greens website

Meanwhile, Tamworth MP and NSW Hospitality and Water Minister Kevin Anderson said the problem was that unmotivated workers are receiving “too much” government relief to stay at home.

Anderson, from the centre-right Nationals party, said it is difficult to “get people to work” and get them motivated.

“It’s a big problem getting people out of bed in the morning to go and do something,” the Tamworth MP noted. “It’s changed during COVID.”

“We paid them too much to stay at home. We’re still paying them too much to stay at home. So what we’ve got to do is flip that around.”

This is despite the state government offering free courses, free apprenticeship, and free training shifts for “pretty much just about anything” to help people train and build skills, and find a new job, Anderson added.

In February the NSW government signed a A$319 million (US$215.59 million) agreement to provide up to 300 fully-subsidised courses across a wide range of areas including health, early childhood education, business, and building and construction.

It has allocated a further A$2 billion (US$1.35 billion) for vocational education and training under the JobTrainer program.

Meanwhile, the federal Labor government also offered 465,000 fee-free TAFE places to help school leavers and workers wanting to retrain to get back into the workforce.

Nationals MP Kevin Anderson arrives at Government House on October 6, 2021 in Sydney, Australia. James Brickwood/Pool/Getty Images

Independent candidate Mark Rodda agreed, saying the pandemic has “certainly” exacerbated workforce deficits.

“You know, I’m gonna go out on a limb and support what Kevin said in relation to are we paying some of those people to sit at home too much.”

Rodda added that the regional workforce cap “should be lifted and it’s quite late.”

Unemployment Up

In Australia, those who are unemployed can apply for JobSeeker Payment, which is $668.40 per fortnight.

The number of Australians receiving unemployment benefits from JobSeeker rose significantly during COVID-19, and is currently higher than at any point before the pandemic.

The government’s massive spending during the pandemic has led to concerns about the expansion of the welfare state, which encourages people’s dependence on the government and thus leads to low productivity.

In January, national unemployment rate increased to 3.7 percent—the highest since May, 2022, while the number of unemployed people rose by 21,900 to 523,200, according to the Australian Bureau of Statistics.

Businesses continue to grapple with labour shortages, with the NSW Treasury predicting a shortfall of more than 300,000 workers in NSW for 2025-26.

Question Over TAFE Management

Anderson suggested that to address skills shortage, TAFE must be “back to basics” as poor management is hampering the effectiveness of the system.

“We’ve got a fantastic TAFE system here in Tamworth that is not operating as it should,” he said. “We’ve got the best teachers in the world, operating with hands behind their back when it comes to making the courses available.”

“If you’re gonna run a carpentry course, they tell you that you need 30 students. Oh, we can’t run the course we’ve only got 15 students.”

However, Labor’s skills spokesman accused the minister of failing to acknowledge his government’s “systemic dismantling” of the TAFE system.

“Minister Anderson’s comments send a clear message: the Liberals and Nationals just don’t get it,” Tim Crakanthorp said on Friday. “A government who does not acknowledge they have a problem are a government with no plans to fix the problem.”

AAP contributed to this report.