Policies that are being or could be implemented in Australia to overcome labour and skills shortages

Cheaper Childcare

Removing barriers to women's workforce participation directly expands labour supply. The Government's Cheaper Child Care policy increased base subsidy rates from July 2023 for all families earning up to $530,000, and set the maximum subsidy at 90% for families earning $80,000 or less with average out-of-pocket costs for families decreasing by more than 13% from the June quarter 2023 to the June quarter 2024

Early Childhood Educator Wage Increases

Boosting childcare supply also requires addressing the childcare worker shortage itself. The government funded a 10% wage increase for all eligible early childhood workers from December 2024 to November 2025, with an additional 5% increase in the second year  both attracting workers into the sector and reducing the cost-of-care barrier that keeps parents (disproportionately women) out of the workforce.

Paid Parental Leave Expansion

The government decided to expand the Commonwealth Paid Parental Leave scheme to 26 weeks by 2026, encouraging more equal sharing of caring duties. More equal sharing of parental leave reduces the career interruption penalty for women and supports higher long-run female participation

Older Workers: Work Bonus Extension

The Employment White Paper permanently extended the Work Bonus measure for older pensioners and eligible veterans, giving them the option to earn more income from working without reducing their pension. This directly increases the supply of experienced workers who might otherwise remain retired.

Overseas Qualification Recognition

Many skilled migrants are unable to work in their trained profession due to slow or costly credential recognition processes. Streamlining recognition across regulated occupations especially in healthcare, engineering, and teaching would immediately expand the skilled workforce.

Regional Incentives

21 occupations are in shortage exclusively in regional Australia, highlighting the continued difficulty employers face in attracting and retaining workers in rural and remote communities. Stronger financial incentives such as regional migration bonuses, relocation grants, or differential pay rates could redirect labour supply more effectively