Australia has a skills shortage. It also has one of the highest migration rates in the developed world. On the surface, that seems like a contradiction. Bring in more skilled workers and the shortage goes away. That is the logic. And it has driven Australian migration policy for decades.

But in 2026, the shortage has not gone away. It has deepened. According to Jobs and Skills Australia’s September 2025 Occupation Shortage Report, 139 occupations have been in persistent shortage every single year since 2021. The national vacancy fill rate sits at 70.2 percent. In skilled trades, it has dropped to just 54.3 percent – meaning fewer than one in two trade vacancies gets filled.

The reason migration has not solved the problem is not that Australia needs more migrants. It is something more complicated and more important than that. Understanding it matters for anyone planning their Australian migration pathway — because the gap between where the shortages are and how the migration system works creates both opportunities and obstacles that every skilled applicant needs to see clearly.

How Big Is Australia’s Skills Shortage in 2026?

The scale of Australia’s skills shortage is not in dispute. What is sometimes misunderstood is how long it has been this way, and how consistently the same sectors keep appearing at the top of every shortage report.

Metric	Data
Occupations in persistent shortage (2021–2025)	139 — in persistent shortage every single year for five consecutive years. These are not temporary gaps caused by economic cycles. They are structural workforce deficits.
National vacancy fill rate (September 2025)	70.2% — meaning roughly 30% of all vacancy attempts fail to fill the role with a suitably qualified candidate.
Technical trades vacancy fill rate	54.3% — the single most alarming data point in the shortage report. Fewer than one in two trade vacancies gets filled.
Skilled migrants working below their level	An estimated 250,000 to 621,000 in Australia — depending on the measure used — are employed in roles below their qualification level. The Activate Australia Skills campaign uses the higher figure, representing permanent migrants who arrived through the skilled stream.
Economic cost of skills underutilisation	Approximately AUD 70 billion per year in lost economic activity, according to modelling commissioned by the Activate Australia Skills campaign.
Sectors in persistent shortage	Healthcare, skilled trades, construction, engineering, education, and selected technology roles

The number that tells the real story
Of the 293 occupations currently on the Occupation Shortage List, 139 have appeared on it every single year since 2021. That is not a shortage caused by COVID disruption or a temporary economic spike. That is a structural gap — a persistent mismatch between what Australia’s economy needs and what its domestic workforce and migration system can supply in those specific roles.

Which Sectors and Occupations Are in Persistent Shortage?

Not all shortages are equal. Some sectors have been in moderate shortage for a few years. Others have been acutely short-staffed for over a decade, with no meaningful improvement in sight. Here is where the real pressure is.

Healthcare – The Deepest and Most Persistent Shortage

Healthcare dominates every shortage report. Registered Nurses and General Practitioners sit at the top of the shortage data year after year, with demand extending across aged care workers, personal care assistants, midwives, psychologists, physiotherapists, and pharmacists. Demand has been elevated for five consecutive years according to the September 2025 Labour Supply Index.

Three forces are driving this simultaneously: an ageing population expanding healthcare demand, a global competition for healthcare professionals in which Australia competes with the United Kingdom, Canada, and the United States, and a lengthy registration pathway that delays the time between a migrant arriving in Australia and being able to work in their clinical role.

Occupation	Shortage status and visa pathway notes
Registered Nurse	Persistent shortage — all states. Salary AUD 65,000–120,000. AHPRA registration required. 189/190/491/482 pathways available.
General Practitioner	Critical shortage — rural and regional areas especially acute. Salary AUD 180,000–250,000. AMC examination pathway for overseas-trained doctors.
Aged Care Worker	Growing shortage driven by demographic demand. Entry-level roles but high volume gap. Multiple visa pathways including 482.
Psychologist	Persistent shortage across both metro and regional. AHPRA registration required. Salary AUD 80,000–130,000.
Pharmacist	Shortage particularly in regional areas. AHPRA registration required. 18,400 migrants with similar qualifications estimated to be underutilised.

Skilled Trades and Construction

The 54.3 percent trade vacancy fill rate is the starkest number in the entire shortage report. Electricians, plumbers, carpenters, bricklayers, welders, diesel mechanics, and automotive technicians are all in persistent shortage — and demand is being amplified by two simultaneous pressures: Australia’s national housing shortage requiring a massive construction build-out, and a major infrastructure pipeline keeping existing tradespeople in steady long-term work.

Skilled trades also offer some of the most accessible migration pathways for the right applicants. Western Australia’s state nomination program does not require a job offer for most trade occupations, WA explicitly waives the employment contract requirement as a concession for trades in shortage, and the minimum points entry of 65 is achievable for many tradespeople.

The trade opportunity most Indian applicants overlook
The Activate Australia Skills campaign has identified 18,400 permanent migrants currently in Australia with building and construction qualifications who are working below their skill level – not because jobs are unavailable, but because the qualification recognition process has not been completed or has been too costly to navigate. For Indian tradespeople with the right qualifications and the right support through the Trades Recognition Australia (TRA) assessment process, this is one of the clearest PR pathways available in 2026.

Engineering and Infrastructure

Civil, mechanical, and electrical engineers remain in sustained demand across Australia, with the pull coming from renewable energy projects, major infrastructure programs, and ongoing mining activity in Western Australia. Construction Managers and Civil Engineering Professionals consistently appear in the shortage data with some of the strongest skilled visa pathways available – and some of the highest points requirements, reflecting the depth of competition in these fields.

Engineers from countries outside the Washington, Sydney, or Dublin Accords – including many Indian engineers – must submit a Competency Demonstration Report (CDR) to Engineers Australia. This assessment is separate from the visa application and takes additional time to prepare properly. Getting the CDR right is one of the most critical steps in the engineering migration pathway.

Education and Teaching

Secondary school teachers remain in persistent shortage, particularly in regional areas and in specific subjects mathematics, sciences, and technology. Early childhood educators have been in shortage across metropolitan and regional areas for five consecutive years. The Activate Australia Skills campaign has estimated that proper recognition of overseas teacher qualifications could unlock 21,000 additional qualified teachers for the Australian workforce people who are already in the country but working in roles below their qualification level.

Technology A More Selective Shortage

Technology is a more nuanced story in 2026 than in previous years. Australia is no longer experiencing a broad shortage of all IT workers the rapid expansion of the tech sector in 2021 and 2022 led to significant over-hiring, and subsequent reductions have eased that generalised pressure. What remains is a selective shortage of specific, highly skilled roles: cybersecurity specialists, software engineers with particular technical depth, and professionals with expertise in artificial intelligence and data infrastructure.

Students and migrants targeting the technology sector should focus on specific expertise and verifiable work experience rather than broad IT qualifications. A cybersecurity specialist with certifications and work history commands genuine shortage status. A generalist IT graduate competes in a much more saturated market.

Why Hasn’t Migration Solved the Problem?

This is the central question and the answer is more systemic than political. Migration is bringing skilled workers to Australia every year. The permanent migration program is running at 185,000 places. The employer-sponsored stream has increased its allocation to 58,040 places. And yet the shortage persists. Here is why.

Reason 1: Overseas Qualifications Are Not Being Recognised Quickly Enough

Australia’s qualification recognition system is not a single system. It is a patchwork of profession-specific bodies, state licensing authorities, and federal assessment frameworks — each with different standards, different costs, and different processing timelines.

A migrant who successfully completes a skills assessment for their visa application which is required by the Department of Home Affairs before an invitation is issued may then face a completely separate professional registration assessment before they can actually work in their field. A nurse who passes the Nurses Council assessment for their visa still needs AHPRA registration to work clinically. An engineer who clears Engineers Australia for their visa still may need state licensing to work on specific projects.

This duplication has been specifically identified by a 2026 Mondaq analysis as unnecessarily repetitive, costly, and time-consuming during a period of critical skills shortage. The result is that qualified professionals are often in Australia, legally able to live and work here, but unable to practice in their profession while awaiting registration outcomes that can take months.

Reason 2: 250,000 Skilled Migrants Are Already Working Below Their Level

This is the most striking data point in the entire skills shortage debate and the most underreported.

An estimated 44 percent of Australia’s skilled migrants are employed below their qualification level, according to OECD data. That is roughly double the rate experienced by Australian-born workers with equivalent qualifications. A separate analysis by Amplify Alliance Australia puts the number of permanent migrants working below their skill level at over 621,000 — the majority of whom arrived through the skilled migration stream specifically to fill workforce gaps.

The Activate Australia Skills campaign has modelled the specific workforce contribution that could be immediately unlocked through better recognition: 21,000 additional qualified teachers, over 16,000 nurses, almost 3,000 pharmacists, 1,000 plumbers, and 30,000 additional homes per year from unlocking the 18,400 construction-qualified migrants already in Australia.

Australia is not short of skilled people. In many sectors, it is short of a functional system for deploying the skilled people it already has.

The $70 billion problem hiding in plain sight
The Activate Australia Skills campaign commissioned economic modelling that estimates the underutilisation of skilled migrants costs the Australian economy approximately AUD 70 billion per year in lost economic activity. To put that in context: Australia’s entire permanent migration program the administrative machinery, the processing system, the employer levy scheme, all of it costs a fraction of that figure. The economic drag from not recognising the qualifications of people already here is many times larger than the entire cost of running the migration system.

Reason 3: The Migration System Selects for Points, Not for Shortage

Australia’s General Skilled Migration program selects applicants primarily on the basis of age, qualifications, English language ability, and work experience not on whether their specific occupation is in shortage in Australia at the time of their application.

This means a highly qualified accountant in a well-supplied occupation can receive an invitation ahead of a plumber in critical shortage, if their points score is higher. The system is designed to select the most capable applicants in the broadest sense. It was not designed as a precision tool for filling specific vacancy gaps.

Employer-sponsored visas the 482 Skills in Demand visa and the 186 Employer Nomination Scheme are more directly linked to shortage because they require an actual job offer in a listed occupation. The 2026-27 Budget’s increase in employer-sponsored places to 58,040 reflects a government acknowledgement that the employer-driven pathway is more effective at filling actual vacancies than the points-tested system alone.

Reason 4: The 70/30 Onshore Preference Creates a Structural Tension

From 1 July 2026, 70 percent of Australia’s permanent migration places are reserved for onshore applicants – people already living and working in Australia. Only 30 percent – the lowest offshore allocation in a decade are available for people applying from overseas.

For roles in shortage that require highly specific overseas expertise not available in Australia’s onshore pool, this creates a problem. A specialised engineer needed for a particular infrastructure project, a medical specialist needed in a regional hospital, a highly experienced tradesperson if these people are not already in Australia, the 70/30 split makes them structurally harder to access through the points-tested stream.

As one workforce analysis put it directly: prioritising onshore applicants is good politics, but for organisations trying to fill specialised technical roles that do not exist in adequate supply anywhere in Australia onshore or offshore it is a less effective workforce policy than a system designed to bring in the specific expertise that is genuinely absent.

Reason 5: Regional Shortages Are the Hardest to Fill

Shortages are not uniformly distributed across Australia. They are always most acute in regional areas, where smaller local labour pools, longer recruitment timelines, and stronger competition from metropolitan employers and major projects leave regional businesses in a consistently more difficult position than their urban counterparts.

Healthcare in rural and regional Australia is a particular pressure point. Regional hospitals and GP practices have been short of doctors and nurses for longer than any other single workforce gap in the country. Similarly, agricultural and regional service industries face competition for tradespeople and engineers from mining and infrastructure projects that can offer higher wages and better amenities.

This is one of the strongest arguments for the 491 and 494 regional visa pathways, which create structured incentives for skilled migrants to locate in regional areas for a minimum qualifying period. But the gap between regional

What Is Australia Doing About It in 2026?

The 2026-27 Federal Budget and associated policy announcements represent the most concerted effort in recent years to address the structural causes of the shortage rather than simply increasing overall migration numbers. Several of the measures announced are directly relevant to skilled migrants and their employers.

Measure	What it means in practice
Employer-sponsored places increased to 58,040	Up from 44,000 in 2025-26 — the largest single allocation increase in the migration program. Reflects the government’s view that employer-driven migration is more effective at filling specific vacancies than the points system alone.
Faster qualification recognition reforms	The 2026 Budget committed to streamlining skills recognition processes, with the goal of reducing duplication between migration skills assessments and professional registration. Specific timelines and mechanisms are still being developed.
Core Skills Occupation List expansion	The CSOL, which determines which occupations can be nominated for employer-sponsored visas, has been progressively expanded to reflect shortage data. The September 2025 OSL data feeds directly into CSOL updates.
Regional visa incentives maintained	The 491 and 494 regional visa pathways continue, with state nomination programs including incentives for regional settlement. Queensland’s AUD 10,000 cash incentive for construction apprentices is one example of state-level intervention.
Points test reform (proposed from July 2027)	The proposed points test overhaul — including a new income-based bonus point and potential removal of Australian study points — reflects a government intent to use the points test more precisely to target high-earning, highly skilled professionals. Still under consultation.

What Does This Mean if Your Occupation Is in Shortage?

If your occupation appears on the Occupation Shortage List or the Core Skills Occupation List, it creates a meaningful migration advantage but it does not guarantee a visa. These are the practical implications for skilled migrants.

Being on the shortage list makes your occupation eligible for more visa pathways including employer-sponsored routes that bypass the points test entirely.
State nomination programs prioritise shortage occupations – WA, SA, QLD, and NSW all actively direct invitation rounds toward their specific shortage sectors
The employer-sponsored pathway is increasingly the most direct route for shortage occupations with 58,040 employer-sponsored places in 2026-27, having a job offer in a listed occupation is more valuable than a high points score for many applicants.
Professional registration timelines matter as much as visa timelines for healthcare and engineering occupations, factor AHPRA registration or Engineers Australia CDR processing into your overall migration timeline, not just visa processing.
Regional settlement significantly improves your chances for most shortage occupations, state nomination through the 491 or 190 regional pathway offers both more invitation opportunities and faster processing relative to the independent 189 stream.
• Being in shortage does not override visa requirements you still need a valid skills assessment, minimum points, English language results, health and character clearances, and in many cases either state nomination or employer sponsorship.

What Does This Mean if You Are an Employer?

For Australian employers particularly in Western Australia, where the mining sector drives some of the country’s most acute trade and engineering shortages the skills shortage is not an abstract policy discussion. It is a direct operational problem: contracts that cannot be staffed, projects that cannot be completed on time, and patients who cannot be seen.

The 2026 Budget’s increase in employer-sponsored places to 58,040 is a direct acknowledgement that employer-driven migration is the most efficient mechanism for filling specific gaps. For employers who have not previously explored sponsorship, the pathway is more accessible than many realise.

Step	Detail
Standard Business Sponsorship (SBS)	First step — apply once, valid for multiple nominations. Employer must be an approved sponsor before nominating a worker.
Subclass 482 Skills in Demand visa	The primary temporary employer-sponsored pathway. Worker must be in a Core Skills Occupation List role and paid at or above the Core Skills Income Threshold (AUD 79,423 from July 2026).
SAF Levy	Skilling Australians Fund levy payable per visa year — AUD 1,200 per year for small business (turnover under AUD 10M), AUD 1,800 for large business. Non-refundable.
Pathway to PR	After 2 years of employment with the sponsoring employer in the same role, workers can apply for the 186 Employer Nomination Scheme (TRT stream) — permanent residency through the employer.
Regional employer option	Subclass 494 Skilled Employer Sponsored Regional — leads to Subclass 191 permanent visa after 3 years regional work. SAF levy is one-time payment of AUD 3,000 (small) or AUD 5,000 (large).

How Red Earth Education and Migration Can Help

Red Earth Education and Migration is a MARA registered migration agency based in Perth, Western Australia, with offices in India. We work with Indian skilled professionals, engineers, healthcare workers, and tradespeople pursuing Australian permanent residency and with Australian employers in Perth and WA who need to sponsor skilled workers to keep their businesses operating.

Our team speaks Hindi, Punjabi, and Gujarati. Every consultation is with a MARA registered agent. We understand both sides of the skills shortage equation the visa pathway for the individual skilled worker, and the sponsorship pathway for the employer who needs them.

Service	What we do
Skilled visa pathway assessment	We assess your occupation against the current shortage lists and occupation lists, identify the most realistic visa pathway for your specific qualifications and points score, and advise on state nomination opportunities in WA and other states
Skills assessment guidance	We advise on the correct assessing authority for your occupation, help you understand what the assessment requires, and for engineering occupations advise on the CDR process and timeline
Employer sponsorship	We prepare Standard Business Sponsorship applications, nomination documentation, and help both employer and worker navigate the 482 and 186 TRT visa process under the new 2026 fee and salary threshold settings
State nomination strategy	We match your occupation to current WA, SA, QLD, and NSW invitation data and advise on the state with the most realistic invitation probability for your profile
Full PR application preparation	For all skilled visa subclasses 189, 190, 491, 482, 186, 494 we prepare complete, decision-ready applications with full document checklists, cover letters, and compliance reviews

Frequently Asked Questions

What is causing Australia’s skills shortage in 2026?

Australia’s skills shortage in 2026 is driven by five structural forces: an ageing population steadily increasing healthcare demand; a massive infrastructure and housing pipeline consuming engineers and tradespeople; a slow and inconsistent system for recognising overseas qualifications that prevents skilled migrants from working in their trained profession; a migration selection system that historically prioritised points over sector-specific shortage; and the persistent underutilisation of the estimated 250,000 to 621,000 skilled migrants already in Australia who are working below their qualification level.

Which occupations are most in shortage in Australia in 2026?

According to the September 2025 Jobs and Skills Australia Occupation Shortage Report, 139 occupations have been in persistent shortage every year from 2021 to 2025. The deepest shortages are in healthcare registered nurses, GPs, aged care workers skilled trades including electricians, plumbers, and carpenters, engineering across civil, mechanical, and electrical roles, secondary school teaching particularly in mathematics and sciences, and selected technology roles including cybersecurity and software engineering.

Why hasn’t migration fixed Australia’s skills shortage?

Two problems prevent migration from fully closing the gap. First, an estimated 250,000 or more skilled migrants already in Australia are working below their qualification level because overseas qualifications are not recognised quickly or consistently enough — the Activate Australia Skills campaign estimates the economic cost of this underutilisation at approximately AUD 70 billion per year. Second, the points-tested migration system selects applicants for general capability rather than specifically targeting shortage occupations, meaning arrivals do not always fill the roles most urgently needed.

What is the skills recognition problem in Australia?

Skilled migrants who arrive in Australia with overseas qualifications frequently cannot work in their trained profession because of a fragmented, profession-specific recognition system. A migrant may complete a skills assessment for their visa required by the Department of Home Affairs and then face a completely separate professional registration assessment before they can actually work clinically or professionally. This duplication has been identified as unnecessarily repetitive, costly, and time-consuming, and has resulted in over 250,000 skilled migrants working below their qualification level in Australia.

Does being in a shortage occupation guarantee I will get a skilled visa for Australia?

No. Being in a shortage occupation makes a visa pathway possible it means your occupation is on the relevant list and certain visa subclasses are open to you but it does not guarantee approval. You must still meet all legal requirements for the relevant visa, including minimum points, a valid skills assessment, English language requirements, health and character clearances, and in many cases state nomination or employer sponsorship. A MARA registered migration agent can assess whether your specific profile creates a viable pathway.

Which Australian states have the worst skills shortages?

Skills shortages exist across all states but differ in composition. Western Australia has persistent shortages in mining, resources, construction, healthcare, and engineering the state reached record employment of 1.63 million in late 2024 with one of Australia’s lowest unemployment rates. Queensland has strong demand in construction, mining, and healthcare. New South Wales has diverse shortages across healthcare, construction, and IT. Regional areas across all states have the most acute shortages, particularly in healthcare, agriculture, trades, and education, where local labour pools are smaller and competition from major projects is stronger.

Can a migration agent in Perth help me if my occupation is in shortage?

Yes. A MARA registered migration agent in Perth can confirm whether your occupation appears on the relevant skilled occupation list, assess which visa pathway is most realistic for your qualifications and points score, advise on state nomination opportunities particularly in Western Australia, and prepare a complete, decision-ready skilled visa application. Red Earth Education and Migration offers free initial consultations for skilled migrants and employers exploring Australian visa options.

Australia’s Skills Shortage Explained: Why More Migration Hasn’t Solved the Problem