Australia is in favour of lifting the income threshold for some temporary migrants, Skills and Training Minister Brendan O'Connor said on Sunday, as the government works to plug widespread staff shortages across the country.

The issue of skilled migration was a focus at this week's government jobs summit where Prime Minister Anthony Albanese urged compromises between employers and unions to tackle the country's key economic challenges.

The government announced on Friday it would lift its intake of permanent migrants to 195,000 this financial year, up by 35,000, to help businesses with staff shortfalls and ease reliance on short-term workers.

Staff shortages have been exacerbated recently by a blowout in visa processing times in Australia, which has left about a million prospective workers stuck in limbo.

Speaking on ABC television, O'Connor said the government would examine raising the Temporary Skilled Migration Income Threshold, which has been at A$53,900 (RM164,000) since 2013.

"I think there has to be a lifting of that measure," he said, without commenting on whether the cap should be hiked to A$65,000 in line with the centre-left Labor Party's policy before it took government at May's general election.

"These are complex issues and we need to work out how we deal with each sector," O'Connor added.

Staff shortages, in both high-skilled and lower pay industries like aged care, have bitten after the Covid-19 pandemic closed Australia's borders for nearly two years, along with an exodus of holiday workers and foreign students.

Australia's jobless rate now stands at a near 50-year-low of 3.4 percent and labour shortages have contributed to surging inflation that has reduced real wages.

Australia is locked in a battle with other developed economies, like Germany and Canada, to attract more high-skilled migrants, as the country's ageing population heightens demand.

- Reuters