The Vision for Australia’s Workforce

Australia has a dynamic, responsive, and capable workforce that meets the needs of employers now and into the future, to drive employment, economic growth, productivity, and prosperity.

On this page:

Defining Australia’s workforce

Australia’s current domestic workforce (or labour force) is comprised of people engaged in work (people working), those who are not working but are seeking work (unemployed), and those wanting to work more (underemployed).

The potential domestic workforce also includes many people who, for a range of reasons, are not actively seeking work.

In February 2021, there were 2.2 million people who wanted to work, but did not have a job.3 Understanding impediments to people participating in the labour market and finding a job is critical to inform policies that will boost participation and employment.

Migrants are also an integral part of Australia’s workforce, providing valuable skills and undertaking work where domestic workers may not be available.

This includes temporary migrants (such as backpackers) who are concentrated in industries such as Accommodation and Food Services, Agriculture, Forestry and Fishing, and Administrative and Support Services, where they are estimated to fill more than one in ten jobs.4

Labour supply in Australia

Labour Supply in Australia

Source: ABS, Labour Force and Labour Force, Detailed, Feb-22; ABS, Insights from the Australian Census and Temporary Entrants Integrated Dataset, 2018; ABS, Census, 2016; ABS, Potential Workers, Feb-21. 
Note: data are in original terms. The chart shows the labour force status, including reasons for not being in the labour force, of Australia’s 15+ civilian population.

Broader drivers and impediments of workforce demand and supply

The economy is dynamic and always changing. Meeting Australia’s workforce needs involves a complex interaction of factors that influence the demand for labour and the supply of workers in the labour market.

While the National Workforce Strategy is targeted at specific principles and levers to inform Australian Government action in the development of sectoral workforce strategies, there are a range of other important policy drivers that influence supply and demand in the Australian workforce, including

Demand side

  • Globalisation
  • Technological advancements
  • Macroeconomic policy settings
  • Industrial relations policy
  • Structural changes in the economy
  • Higher skills needs
  • Growth in services sector

Supply side

  • Demographic change (ageing population)
  • Educational attainment
  • Incentives to work (such as tax and transfer settings, wages, workplace flexibility and economic conditions)
  • Barriers to work (such as, skills mismatch, non-vocational barriers, poor health, long-term unemployment, access to childcare & transport)
  • Regional mismatches
  • Migration settings

3 ABS, Potential Workers, February 2021, data are in original terms.

4 Treasury, analysis of Single Touch Payroll and visa data