AUSTRALIAN IMMIGRATION NEWS

Immigration to Australia could help inflation

Wednesday, 7 November 2007

Many economists in Australia expect the Federal Government to raise interest rates in the coming year in order to curb inflation driven by Australia’s hot economy. However, this may not be necessary as immigration fuels the continued job shortage

Australia’s economy has been red-hot, bolstered by resource and mining in the western half of the country, and growth in the services sector and property prices in metropolitan centers like Sydney and Melbourne. The Australian dollar has seen big gains against most other world currencies, especially the US dollar. This has made it comparably less expensive for Australian business to import material and equipment.

Demand for everything from heavy manufacturing equipment to labour has skyrocketed in Australia, leading to fears of currency inflation and the expectation of a federal rate hike to cool the economy down.

However, some economic experts feel that supply can easily meet the growing demand, especially in labour - the driving force behind inflation.

Australia’s comprehensive skilled immigration system is doing and excellent job at attracting the skilled workers that the Australian economy needs, but it needs more in order to meet demand. Indeed, the skilled immigration system will be working flat out to supply the economy with enough workers. As long as immigration levels can match the desperate need to workers in the Australian economy, inflation can be kept at bay with minimal federal intervention.