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Business counts cost of worker shortage in Australia and New Zealand

Australia and New Zealand’s decision to shut their borders to non-residents during the pandemic has helped suppress Covid-19, enabling economic growth and corporate profits to beat expectations.

But 15 months on, critics warn that these “hermit nation” policies are now causing significant problems for businesses, which face worsening skills shortages that are raising costs and denting output.

Many industries are advocating a relaxation of border and visa rules, even as the highly infectious Delta strain of coronavirus prompts authorities to tighten rules to protect both nations’ largely unvaccinated public.

The booming agriculture and mining sectors in Australia, which have helped claw the economy out of its first recession in almost 30 years, are among the worst affected. While in New Zealand restaurants and cafés face such critical staff shortages they recently held a nationwide protest to lobby the government to relax visa rules for overseas workers.

The jobless rates in both Pacific nations have declined rapidly due to government stimulus and the early reopening of their economies.

Australia’s unemployment rate hit a decade low of 4.9 per cent in June, although this could rise as a result of fresh outbreaks of Covid this month. New Zealand’s jobless rate is 4.7 per cent.

Lachlan Dobson, co-owner of Kimberley Produce, Western Australia’s largest banana producer, is one of thousands of farmers struggling to hire staff because most of the 40,000-strong army of foreign backpackers and seasonal workers have gone home.

“We took the difficult decision to just knock over a portion of our crop rather than leave it to cause biosecurity problems, such as fruit flies,” said Dobson, who estimated the loss of produce at A$1.4m (US$1m).

Australian farmers have reported A$58.4m in crops lost because of labour shortages since December, according to a National Crop Lost Register set up by Growcom, a farm lobby group.

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