SYDNEY, AUSTRALIA - AUSTRALIA said it was relaxing its migration programme to allow more skilled workers into the country where the jobless rate is at a three-decade low and most companies face a labour shortage.

The new centre-left Labor government said it was expanding the skilled migration programme by 6,000 in 2007-08, bringing the total number of visas to 108,500.

'Employer-sponsored visas are the highest priority because they put a migrant worker directly into a skilled job,' Mr Chris Evans, Immigration and Citizenship minister, said in a statement on Sunday.

Australia is a nation of migrants, with nearly one-in-four of the country's 21 million people born overseas. The booming economy, which has been growing at more than 4 per cent annually, is facing a huge shortage of skilled labour, pushing up wages and stoking inflationary pressures.

The unemployment rate has been under 5 per cent since 2006 and figures out last week showed it falling to a fresh 33-year low of 4.1 per cent in January.

Core inflation in Australia was running at a 16-year high of 3.6 per cent last quarter, forcing the central bank to hike interest rates to an 11-year high of 7 per cent earlier this month. Markets are expecting one more rate hike in March as it steps up its fight to curb inflation.

Mr Evans said the latest package had the potential to provide thousands of additional workers in the short term and would help address inflationary pressures. -- REUTERS