Missed opportunity: Politicians squander $9B economic boost by ignoring skills recognition reform

27 March 2025

Both the federal government and opposition have squandered a $9 billion economic opportunity by failing to fix Australia’s broken skills recognition system in their budget plans, says the Activate Australia’s Skills campaign.

Campaign spokesperson and CEO of SSI, Violet Roumeliotis, said with one in three industries struggling to find skilled workers and an outdated recognition process that blocks qualified people from using their skills, the Government’s budget and the Opposition’s reply missed the chance to tackle workforce shortages.

“Neither the government nor the opposition acknowledged the need for skills recognition reform in their budget statements despite multiple recent reviews recommending so. By stalling reform, they’re leaving businesses struggling, workers underemployed, and key industries in crisis,” said Ms Roumeliotis.

Research from Deloitte Access Economics reveals Australia loses $24.7 million daily—or $9 billion annually—because skilled permanent migrants are locked out of jobs that match their expertise.

“We could address key workforce shortages immediately by fixing our skills recognition system, but the budget offers nothing to address this $9 billion handbrake on the economy,” Ms Roumeliotis added.

“We’re inviting skilled people to Australia to fill specific gaps and then trapping their expertise in a bureaucratic maze. With nationwide skills shortages, and 90% of employers struggling to fill positions, this isn’t just poor policy, it’s economic self-sabotage.

“Delaying reform has real consequences for everyone—longer wait times to see specialists, stalled construction projects, childcare shortages, and service gaps in critical industries,” stated Ms Roumeliotis.

“Fixing skills recognition isn’t just smart—it’s essential. Every day we waste costs us $24.7 million and holds back our entire economy.”

• The Activate Australia’s Skills campaign, which is convened by non-profit organisation SSI, is calling on the Australian Parliament to implement key skills recognition reforms:   
• Establish one national governance system for all overseas skills and qualifications recognition, including an Ombudsman with regulatory power to provide independent oversight and transparency.   
• Create a more joined-up system that links skills recognition for migration purposes with licensing and accreditation for employment purposes.  
• Provide financial support for individuals to remove cost barriers and an online portal with all the information so people know what they need to do.  
• Set up Migrant Employment Pathway Hubs with skills recognition navigators to get qualified people working in their professions again.  

These costed reforms are supported by more than 100 organisations as well as leading economists such as former Treasury Secretary Dr Martin Parkinson AC PSM and CEDA CEO Milenda Cilento.

In the lead up to the federal budget, the Government’s Economic Inclusion Advisory Committee and the Grattan Institute both called for urgent reform of the skills recognition process, as did the Joint Standing Committee on Migration last year.