With the resources sector poaching limited labour from other states with the promise of huge wages, business heavyweights are warning that the rest of the Australian economy is not prepared and cannot compete. Leaders have cautioned that the labour shortage is worsening as the mining boom continues, and is forcing up wages inflation outside of the rich mining hotspots in Western Australia and Queensland. The Deloitte Access Economics June quarter outlook declared that people could earn $140,000 for "flipping burgers in Karratha", and Origin Energy chairman Kevin McCann warned that Australia is simply not prepared for the fallout. The comment was backed by one of the country's best-connected businessmen, Transfield Services chairman Tony Shepherd, who cautioned that more needed to be done to assist the industry sectors which are currently hurting, such as manufacturing. "The risk is we just turn the country into a gigantic quarry with a whole bunch of public servants redistributing the royalties and taxes," he said. The comments come as the Deloitte Access Economics survey found mismatches between demand and supply of labour, as WA and Queensland lure workers from the rest of the country, adding to wage pressures. The report said Australia's working-age population growth has recorded its sharpest fall ever as Baby Boomers entered retirement age. It also reported that immigration has fallen just as the next phase of the mining boom increases the demand for workers. Deloitte Access Economics director Chris Richardson said the shortage of workers would hold back job growth because businesses wanting to double their investment in mining states would only be able to achieve half that growth because of labour shortages. "Part of the job weakness we are now starting to see is because of a lack of workers rather than a lack of jobs," the report stated. While the growth in the state economy of NSW was tipped at 2.5% this financial year and 2.2% for Victoria, the labour price index in these states was set to grow by 4.8% and 4.4%. The report welcomed the government move to increase immigration numbers by 16,000 in the May budget as well as devote more resources to skills training - but Deloitte stated these measures "run the risk of being too little and too late".

It criticises both sides of politics for arguing against immigration in last year's election, and says talkback radio was to blame for promoting the myth that migrants stole jobs from locals. It argues that more migrants are needed to fill the skills shortage.