(Image: Private Media)

We’ve all heard stories of restaurants unable to reopen due to lack of staff. Or reports of consulting firms advertising thousands of vacant jobs. As Australia emerges from lockdowns, labour shortages have been a serious concern for businesses across the country.

Based on the mid-year budget update released yesterday, the government expects the labour market to tighten significantly: MYEFO predicted that unemployment will fall to 4.25% in coming years. Crucially, it sees participation as remaining at historically high levels -- 66% and above -- into the mid-2020s. On the basis of this jobs boom, the government is expecting a big tax haul that will allow for even bigger spending.

But the government's prediction of massive jobs growth relies on some crucial assumptions, including that the right people with the right skills are available to fill these jobs. And with so many uncertain factors impacting labour, it's anyone's guess what will happen next.