Skills recognition reform will boost productivity: Productivity Commission report 

The nation’s top economic advisory body, the Productivity Commission, has backed urgent calls to overhaul Australia’s skills recognition system — a move advocates say is a “shovel-ready” reform that could help unlock a $9 billion windfall for the economy. 

In a new draft report, Growth mindset: How to boost Australia’s productivity, the Commission has thrown its support behind cutting occupational red tape holding back skilled professionals from fully contributing. . 

The report states, “Australian governments need to make the most of our existing skills base and make it easier for people to enter new occupations. It recommends reducing “overly restrictive and inconsistent occupational entry regulations that constrain the flexibility of the labour market.” 

The finding comes as the Activate Australia’s Skills campaign lodged its submission to the Prime Minister’s Economic Reform Roundtable, outlining four practical solutions to reform skills recognition and boost productivity that are backed by more than 100 business and civil society groups. 

These simple, quick and widely supported reforms would remove a significant handbrake on our economy and productivity, said Violet Roumeliotis AM, CEO of non-profit SSI, which leads the Activate Australia’s Skills campaign  

“Australia is facing a growing skills crisis that’s choking productivity and slowing down our economy, but we have a proven solution – make the skills recognition system fairer, faster and more affordable so professionals can fill those shortages,” Ms Roumeliotis said.  

“Right now, there are 620,000 permanent migrants in Australia working below their skill level, despite one in three occupations facing worker shortages. This mismatch is dragging down productivity and holding back our economy.” 

Unlike many other ideas, reforming skills recognition can deliver immediate productivity gains – these proposals are shovel ready and would deliver dividends faster than any other proposal on the table,  Ms Roumeliotis said.  

“This is an easy fix that is supported by more than 100 businesses, unions  think tanks and community organisations. This is exactly the type of solution the Treasurer is calling for. 

“We can’t have a truly productivity economy when thousands of people are being needlessly locked out from filling skills shortages due to barriers unrelated to their skills: excessive fees, bureaucratic red tape, and slow and confusing processes throughout the skills recognition system.” 

In its submission to the Economic Reform Roundtable, the Activate Australia’s Skills campaign is calling for four practical solutions to reform skills recognition and boost national productivity:  
: 

• 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, or career gateways, with skills 
  recognition navigators to get qualified people working in their professions 
  again. 

Several prominent Australians have endorsed these sensible reforms to unlock skills 
and productivity, including former Treasury Secretary Dr Martin Parkinson AC PSM, 
former Reserve Bank Governor Glenn Stevens AC and CEDA CEO Melinda Cilento. 

The full Productivity Commission draft report can be found here.