Australia is in the throes of a mini baby-boom that together with an aggressive push to attract skilled migrants is delivering the consumers and workers needed to keep the economy humming.

Australia’s annual population growth of 1.2 percent is three times the European average, double that of China and a match for Mexico. Such growth is the product of a two-pronged approach by policy-makers to ease the dual problems of a greying population and a desperate shortage of workers in many key industries.

The government is using tax benefits to encourage families to have more children, while making it easier and more attractive for young skilled migrants to come to Australia.

“One of the key drivers of any economy is population growth,” said Craig James, chief equities economist at CommSec. “Simply, if there are more people, then retail spending will be higher, more homes will need to be built and more services provided.”

“So the fact that Australia is currently experiencing a mini baby-boom is clearly of importance to a host of companies, especially across retail and housing sectors,” added James.

Recent data showed 135,000 babies were born in the six months to September 2005, the most for any equivalent period in 33 years. Unemployment near a 30-year low, record household wealth and a government tax bonus for babies have all encouraged the family habit.

This reproductive flurry meant natural growth in population — births minus deaths — was a rapid seven percent in the year to September, or around 130,000 new Australians.

Australia is also putting an emphasis on younger migrants. Of the net migration in 2004/05, 70 percent were aged 15-34 years, whereas just 28 percent of the population are in that age group. “The idea is that there will be more tax payers around in the future to support the retired,” said Stephen Koukoulas, chief strategist at TD Securities.

“Of course, you still have the problem of what happens when these youngsters age, but that’s for the future.”

Australia’s government is also committed to a major expansion in immigration, and this in a country where a quarter of all people were born overseas.

In the 2004/05 fiscal year, net migration added 110,000 to the population, a ten percent increase from the previous year.

Betraying a statistician’s love for numbers, the government notes this equates to a net gain of one international migrant every four minutes and 47 seconds leading to a total population increase of one person every two minutes and 12 seconds.

Policy makers are targeting permanent immigration of 140,000 in the current fiscal year, the highest in over 40 years, and industry groups are lobbying hard for a rise to 180,000.

A government Web site shows some 120,000 job vacancies in an economy that is experiencing its 15th uninterrupted year of growth.

But Australia faces growing international competition for skilled labour, with officials from Britain, Canada, India, China, New Zealand and Iceland among those searching the world for workers. Some have started to offer perks like housing and education subsidies to attract foreign talent.

The Australian government has responded by easing migration rules. In March, it added 16 occupations to the list of those it considers “skilled”, making a total of 81 that receive preferential consideration for migration to Australia.

The new additions included boat builder, floor finisher, lift mechanic and stonemason.

Immigration laws have also been relaxed to allow foreign students at Australian universities to settle if they can organise a job after graduating. And to further widen the country’s appeal, skilled migrants will soon be able to sponsor same sex partners to come to Australia.

Australian companies have also run road shows across the globe looking for talent. This year the Australian Industry Group will hold expos in Shanghai, Hong Kong, Manila, Detroit, Houston, Sao Paulo, Lima, Dubai, Dublin, London and Manchester. The labour shortfall is greatest in the mining, construction and engineering industries. A diesel-engine fitter, for instance, can easily bring in $150,000-plus — three times the average wage — if prepared to fly in and out of jobs at remote mines.

“Obviously, it adds to the supply of labour and that’s what many industries are crying out for,” said TD’s Koukoulas. “But ultimately, such population growth will also stretch resources. It’s, maybe, not the one-way bet policy makers would like it to be,” he added. — Reuters