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Business
Kristian Silva and Danny Morgan

After a hell of a ride, Victoria's economy is on the up — but where are the workers?

Politicians often spend election campaigns promising to create jobs. This time they need people to fill them.

When Victorians go to the polls in three weeks, they will do so at a time when unemployment in the state is at near-record lows.

According to the Australian Bureau of Statistics, the unemployment rate was just 3.5 per cent in September, on par with the national average.

The previous month, the Victorian figure was at 3.1 per cent, the lowest on record since 1974.

While the Victorian government has trumpeted its "Big Build" infrastructure spending and the thousands of jobs that have come with it, other sectors are experiencing a desperate shortage of workers that their leaders say is stunting economic growth.

Victoria requires an estimated 373,000 additional workers by 2025 to meet demand from new jobs and to replace retiring staff, according to the Victorian Skills Authority.

The authority identified aged and disability care as the industry facing the biggest shortage, with 15,100 new workers needed.

Workers like Yanti Hartshorne could be the solution.

Every week, she visits elderly residents in their homes, performing domestic duties like cooking, cleaning and tidying.

This time, she's dropping in to see client Michael Planck in Melbourne's eastern suburbs. The weekly sessions help the octogenarian maintain his independence so he can continue to live at home.

Ms Hartshorne, a single mother who is fluent in three languages, quit her hospitality job six months ago and decided to give aged care a go, lured by better job security and flexible hours.

So far things are going well, with Ms Hartshorne working between 38 and 40 hours each week.

The best part of the job, Ms Hartshorne says, is "making people smile".

"It's not a job for everyone because it is a hard industry. You just have to know how to listen and be really open-minded," she said.

'No easy fix' for industries in desperate need of workers

Ms Hartshorne's employer, HomeInstead, is turning away clients because of a lack of trained workers, a situation the company's chief operating officer Georgia Downes described as "tragic".

"That's devastating because they're people in real need and we can't take them on," she said.

The company runs its own registered on-the-job training program, and Ms Downes said she wanted the Victorian government to invest in aged care training schemes.

She also wanted to see incentives in place to entice new people to join the industry, much like what is happening in the nursing sector.

In August, the government pledged to pay for tens of thousands of nursing and midwifery degrees. The state opposition made similar promises weeks later.

ANZ senior economist Adelaide Timbrell said there was "no easy fix" for aged care, especially until migration into Australia picked up again.

"It's not like an industry where you can turn 10 workers into one worker on a laptop," she said.

"When there's actually fewer workers worldwide and more retirees and older people worldwide, we're going to see an increased imbalance in the number of people who need care, and the number of people who can provide care."

Training system 'broken', industry representatives say

Alongside aged care, the skills authority identified software programmers, admin workers, nurses and retail sales assistants as occupations in hot demand.

Ms Timbrell said these shortages weren't unique to Victoria, but the state's pandemic exodus had put local employers under additional pressure.

Peter Angelico, the founder of a steel manufacturing business, called for more state government funding for on-the-job courses to connect young people with potential employers. 

Mr Angelico, who is a Liberal Party member and the head of the South East Melbourne Manufacturing Alliance, said many companies were frustrated by a disconnect between the skills taught at TAFE and what was needed on the factory floor.

"The system's broken to a certain extent. People have great resumes but they're not suitable," he said.

Mr Angelico said he had raised his concerns with leaders of both major parties for a number of years.

The manufacturing alliance, which is not politically-aligned, runs its own four-week training course, giving newcomers like apprentice welder Stephen Anderton a foot in the door.

Mr Anderton, who was a plasterer for two decades, has built basic skills in his new career while on the job and plans to do further training at TAFE.

"It just gives you a great understanding of the actual trade itself and what is involved," he said.

"I can see myself in this industry until I retire."

Another major industry, trucking, requires between 3,000 and 5,000 new recruits, the head of the Victorian Transport Association (VTA) said.

VTA chief executive Peter Anderson warned there would be regular delays in deliveries to supermarkets and consumers if the worker shortage was not addressed.

Rather than being a deterrent, Mr Anderson believed an overhaul of licensing requirements to force recruits to clock up additional training hours would make the industry safer and more appealing.

"We're putting people on the roads who're not professional, who've not been trained. They're driving a vehicle that could be a weapon. This is why we're not attracting people," he said.

Victoria's debt blows out — but is it a worry?

The Victorian economy was hit hard by the pandemic. Numerous lockdowns sucked the life out of many businesses.

To respond to the health measures and lockdowns it imposed, the government increased its spending, partly to prop up the economy but also to protect a health system under severe strain.

That strategy, along with the former federal government's JobKeeper payments, kept businesses afloat and protected the livelihoods of many Victorians.

Two and a half years on from the start of the pandemic, there are signs the Victorian economy is recovering.

Despite concern about inflation and rising interest rates, the most recent national accounts showed Victorians were finally starting to get out and have some fun.

Spending on hotels and cafes was up 8 per cent, alcohol sales were up 6 per cent and spending on recreation and culture rose by 2 per cent.

Melbourne's Luna Park is one of the entertainment businesses enjoying the resurgence.

It lay dormant for months at a time during the lockdowns, but marketing manager Penny Flanders said it was bouncing back strongly.

"We have had incredibly busy sell-out days, well up with 2019 pre-COVID figures," Ms Flanders said.

"It's just glorious to see people out and about having fun."

But there are considerable long-term challenges for the state economy as Victoria takes on massive debt to fund its infrastructure program.

The state's net debt is forecast to climb from $73 billion in 2021 to $165.4 billion by 2026 — more than the combined debt totals of New South Wales, Queensland and Tasmania.

Treasurer Tim Pallas has been unapologetic, saying it was "necessary to take on the debt" to support the economy during the pandemic.

"You sometimes go into debt to grow your business, in fact most businesses do exactly that," he said earlier this week.

The Opposition has identified debt as one of the key issues it wants to tackle, and has pledged to legislate a debt cap if elected.

While soaring debt is never ideal, RMIT University emeritus professor of public policy David Hayward said the spending was necessary and the infrastructure projects financed by the government would have a lasting benefit.

He said the spending was financed at a time when interest rates were at record lows.

"Even though interest rates have increased, they are still very low. [The] government's borrowing for 10 years at 4 per cent. At any other time in our lives we would have gone, 'that's cheap'," Professor Hayward said.

So far in this election campaign, neither side of politics has unveiled an aggressive debt reduction plan through higher taxes or dramatically reduced spending. In Professor Hayward's view, that's OK.

He believes, in the short term, the party elected on November 26 should be less worried about debt and more focused on helping the private sector rebuild.

"The big issue for the economy right now is the shortage of workers," he said.

Professor Hayward said while Victoria needed more people from interstate and overseas, "we also need to make sure they have got the right skills and qualifications".

Like the Victorian Skills Authority, Professor Hayward identifies workers like Yanti Hartshorne as those the state needs most.

"One of the areas we have really got a shortage in is the care economy, aged care, disability, family violence, social housing, mental health. All of those areas are big," Professor Hayward said.

"There are also big shortages of IT skills and there is also quite a bit of a shortage in the construction industry."

The major parties lay out their economic promises ahead of the state election
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