Labour demand in regional Australia is the biggest 'pull factor' for people from the cities according to the Commonwealth Bank's latest Regional Movers Index.  

Commonwealth Bank and Regional Australia Institute data shows quarterly migration flows to regional areas have averaged around 15 per cent higher in the past 12 months compared with the two years prior to the pandemic.  

Commonwealth Bank Regional and Agribusiness Executive General Manager Paul Fowler said it’s an exciting time for regional communities, movers and the many thriving regional businesses, particularly in agriculture, manufacturing and infrastructure. 

“Many regional areas are experiencing strong economic growth, creating employment opportunities for people looking to make the move,” he said.  

“It is encouraging to see regions with thriving industries, stimulating employment and overall economic expansion.” 



RAI CEO Liz Ritchie said migration from our capitals to Australia’s regions in this “living with Covid time” has remained elevated, with a slight uptick of 2.4 per cent on the June quarter. 

“We have seen record job ads, underscored by enduring business confidence, regional population growth and the ongoing expansion of the services sector," said Ms Ritchie. 

"However, supply of labour continues to be constrained by the pool of available workers having dried up, high labour mobility, and local skills not matching roles advertised,” said Ms Ritchie  

Demand outstripping supply  

While high demand for workers in the regions may be a positive sign for their economic future, a critical shortage of supply is weakening their ability to capitalise on the growing demand.   

The low supply of available workers has translated to almost a third (31 per cent) of businesses struggling to find suitable workers, ABS data released in June indicates. 

Most of these businesses attributed their struggles to applicants not having the required skills (59 per cent) and a lack of applicants (79 per cent). 

The inability to find workers is also not sector-specific, with the shortage affecting every industry. 

The five sectors that have been hit hardest with staff shortages are trades, hospitality and tourism, healthcare, manufacturing, and technology. 

NAB chief economist Alan Oster says the widespread difficulty in finding suitable labour indicated by the hundreds of thousands of job vacancies is just as much a labour shortage problem as it is a skills one. 

Mr Oster says it was already difficult to fill these types of jobs before the pandemic, but it has worsened over the past year. 

"The reasons for the shortages in these sectors are numerous. In healthcare, the recent halt in immigration, a lack of healthcare workers wanting to pursue a career in mental health or nursing, and people leaving the sector due to burnout, have created a structural skills gap." 

"When it comes to technology jobs, there’s a global shortage of workers with the necessary skills. Markets around the world are vying for workers with these skills, so Australia faces a competitive fight to attract that talent," he said.  

Is there a solution?  

According to Seek managing director Kendra Banks, the solution to the structural and skills shortages is to expand Australia's targeted migration program and invest in both short vocational courses and longer-term skills education and training. 

"We’ve seen more businesses be more open to overseas remote talent and that can be a way of filling the skills gap in areas like technology,” Ms Banks says. 

The federal government has recognised the need to increase Australia's pool of available workers, and so have launched a number of incentives to plug the gaps.  

Since March, more than 58,000 applications for skilled visas, including permanent and temporary skilled places, have been lodged with the department. Nearly 25 per cent of those applications have already been finalised. 

The NSW government is also working to increase the supply of local labour with $5 million for a Rural and Regional Health Career Scholarships program announced to assist key healthcare workers in regional NSW enter the workforce or upskill. 

Can we accommodate the growing trend?  

While regional demand for labour continues to break records, with more than 94,000 vacancies posted in October, regional communities are still struggling to accommodate the movers due to a tight rental market and a lack of essential services.  

"People are still voting with their feet and we need to ensure that regional Australia can accommodate this continuing trend – specifically around housing and essential services,” Ms Ritchie said. 

In Condobolin, like many other small regional towns, quality rentals are a few and far between.  

"There's a massive shortage of rentals, particularly good rentals," said local Real Estate Agent, Paddy Ward.  

"There's also a huge shortage of vacant blocks to build on, so there's all these old houses that aren't up to standard anymore and are literally falling down," he said.  

Long waiting periods for builders, expensive house prices and rising inflation are all deterring investors from the town's real estate market, leaving those looking to move to regional areas to fill the job vacancies out in the cold.  

The Australian Housing and Urban Research Institute undertook a study that explores the lived experience of residents to better understand the benefits and disadvantages of living in a regional city. 

Their research found that many participants felt that the affordability and availability of regional housing – particularly rental – was declining because of regional population growth during COVID-19. 

"Our research also highlighted the high levels of frustration many residents felt with the provision of essential services," said lead researcher Dr Laura Crommelin of UNSW Sydney. 

"There were particular concerns about the current lack of specialist health care and the waiting time for GPs. People also raised concerns about the likelihood of increasing demands on health and education as a result of population growth," she said.  

While demand for workers continues to pull more people into regional areas, government and partnering agencies will be scrambling to find solutions to the structural and skills gap that continues to prevent tree-changers from making the move.