Evans said concerns had been raised by the states and a number of industries regarding their ability to rapidly start up new and significant projects because of skilled labour shortages.

"Skills and labour shortages are also a major cause of inflationary pressures in the economy," he said.

As an immediate measure, the Skilled Migration program will be increased by 6000 places in 2007-08.

The increase will be made up of permanent employer sponsored visas and general skilled migration visas.

"Employer sponsored visas are the highest priority because they put a migrant worker directly into a skilled job," Evans said.

The General Skilled Migration program selects people with the right skills and qualifications to work in industries where labour is in demand.

The additional 6000 places will increase the total number of permanent visas granted under the Skill Stream of the migration program in 2007-08 to 108,500.

The Australian Government is also negotiating with other countries to expand the reciprocal Working Holiday visa program for young people.

The number of people on Working Holiday visas has grown from 85,200 in 2001-02 to 126,600 in 2006-07.

However, plans to increase the number of workers on temporary visas have not been welcomed by the Construction, Forestry, Mining and Energy Union.

National secretary Dave Noonan told ABC Online there were many young Australians who were not getting opportunities for training or being offered apprenticeships.

He said there was still unemployment among Australians, both in Western Australia and the eastern states.

"There are skilled construction workers today who aren't productively engaged, and could be given work," he said.