Australia’s wages are higher, but are expats really any better off?
After a four-year degree, surveyor Robert Rameka discovered he was earning the same amount of money as his brother who had left school for Australia to drive a forklift.
Krystal and Warwick Green left Hawke’s Bay on a whim, took three days to find jobs in Queensland and are earning triple what they did in New Zealand. Now owners of their own home and with a baby on the way, they have no plans to return.
Even while studying fulltime, Chris Logan is left with an extra $100 a week in spending money in his pocket than he had while doing the same in Wellington.
With this week’s revelations that Kiwi doctors are earning thousands of dollars for a weekend’s work in Australia, the wage gap is again in the news.
It’s an accepted wisdom that the ‘Lucky Country’ pays better, and Kiwis with dollar signs in their eyes flock across the ditch in their thousands. At least one expert is predicting a “perfect storm” of migration factors will see 2009’s record exodus of 35,000 people surpassed this year.
The Government has identified closing the gap as a priority, but is there really a pot of gold at the end of every trip across the ditch?
It depends, says BNZ chief economist Tony Alexander. “All people look at is the income. They’ll have a quote for a job or something over there, bring it back into Kiwi dollars and go ‘Holy moley’ and nobody then goes and looks at the cost of living and realises the housing market is extremely difficult.”
According to Australian media reports, house prices have rocketed, with even those in fringe suburbs now beyond the reach of most first-home buyers. “They price to what the market will bear,” Mr Alexander says.
But living in Eight Mile Plains, 13 kilometres from Brisbane’s CBD, Mr Rameka and wife Victoria are paying A$390 a week for a new three-bedroom townhouse with free access to a swimming pool and gym. Earning twice what he was in New Zealand, with his wife also earning more, the couple are living comfortably.
He says he has spoken to flat- hunting friends in Auckland who are looking at having to fork out up to $1000 a week.
After 18 months in Australia, where his older brother Gerald already lived and where his parents have since moved, Mr Rameka says money was the main factor behind their shift.
“When I graduated I was getting $22 an hour when I first came out of Otago and my little brother . . . he came straight over after school and he was just a forklift driver and he got the same as me – $22 an hour, and I had a degree behind me.”
As well as doubling his salary, his employer has thrown in a car, fuel card, phone and laptop. “Getting those extras plus [doubling my wage], I couldn’t let that go.”
Other attractions include the weather, the beaches and playing league. “The lifestyle’s pretty good. There’s a lot of shopping malls for my wife, so she’s happy as well.”
AN AVERAGE of 20,000 Kiwis emigrate to Australia every year, though that figure dipped to about 15,000 a year ago. “What happened over 2009 going into 2010 was people that would normally leave to go to Australia sat still – you know, ‘Global financial crisis, I’ll just sit still for a while’, ” Mr Alexander says.
“What we have now is a perfect storm that will produce a massive surge in the numbers going to Australia. You look at what usually drives migration flows, it’s the difference in the unemployment rates and the exchange rate.
“The Kiwi is at a two-decade low against the Aussie dollar, it makes Aussie more attractive. We’ve got our unemployment rate at 6.8 per cent and theirs is at 5 per cent – that’s going to drag people or push people across as well.
“Fourth factor you’ve got a tightening last year in Australia’s migration criteria for general skilled people, making it harder for Australian employers to source people from overseas, but we Kiwis can pop over on a whim. The relative attractiveness of Kiwis has increased.”
Added to this is Australia’s strong economic growth as well as the rebuilding after the floods in Queensland. That is expected to create further demand for tradespeople at a time when there will be strong demand in Christchurch too.
Australian wages are also growing at a faster rate than those here, meaning the wage gap is widening.
Figures released last year showed that, between 2008 – when National came to power promising to bridge the wage gap – and July last year, the gap increased by $40 a week to $580, based on average ordinary wages before tax and the exchange rate at the time. Here the average weekly wage at the start of last year was $947, while in Australia it was A$1243. New Zealand’s average wage had grown by 5.2 per cent compared with Australia’s 6.7 per cent.
An Australian company recruiting 300 bus drivers ran out of application forms at a recent expo to attract workers in Auckland, Mr Alexander says. “The interest from the Kiwis is fairly high in all of this . . . I expect the net outflow in the next couple of years will breeze right through the record 35,000 we saw in 09.”
According to Marc Burrager, NZ general manager of recruiting company Hudsons, “Nobody’s going to sit in another country and weigh up remuneration and come to New Zealand over Australia. It’s just not going to happen.
“Similarly, if people are career- focused and looking at like-for-like roles, the roles in New Zealand are unlikely to be of the same scale as they are in Australia.”
What we do offer, however, is the opportunity to fast-track careers and broaden skill-sets, even if we are being used as a stepping-stone.
For example, in larger companies in larger countries, roles such as sales director, marketing director, chief information officer and chief financial officer are often specialist roles.
In New Zealand, it is not unusual to have a CFO who is also responsible for IT, he says.
“For a comparable job on a comparable scale, [the salary is] probably not that much different. The difference comes in when you do a comparable job on a much grander scale.”
Then the cost of living has to be factored in. “When you look at things relatively speaking, Sydney is more expensive to live in than Auckland, and Melbourne is considerably more expensive to live in than Wellington.
“So it’s all very well saying, ‘I’ll have more money in my pocket’, but it’s going to be more expensive to live there and that’s before you factor in the tax scenario.
“You’ve really got to weigh all those factors up to come to an informed decision that says what is the reason I would choose one country over another.
“Financial is only going to be one part of that and, even if I look at financial, it’s about more than simply, ‘Can I earn more income?’
“You may still end up net better off – I’m not saying you won’t, you may well do – but how much better off is possibly relatively less than you might think. And again it comes back to is money the primary driver.”
WAGE COMPARISONS
Australia (in Australian dollars):
- Mining: $108,010
- Manufacturing: $59,509
- Construction: $67,543
- Finance and insurance services: $80,543
- Arts, recreation and other services: $59,524
New Zealand (in Kiwi dollars):
- Forestry and mining: $53,872
- Manufacturing: $50,003
- Construction: $48,298
- Finance and insurance services: $74,069
- Arts, recreation and other services: $46,114
Source: The Australian figures were calculated by multiplying the weekly average wage according to the Australian Bureau of Statistics by 52 (number of weeks a year). The New Zealand figures were calculated by multiplying the average hourly rate per industry, according to Statistics New Zealand figures, by 40 (number of hours worked a week), then by 52.
COUPLE TOOK THREE DAYS TO FIND FULLTIME WORK
Late one night and in the mood for a change, Warwick and Krystal Green booked one-way tickets to Australia and haven’t looked back.
Now based near Mackay in Queensland, with Mr Green working as a workshop supervisor at a mine and Mrs Green as a service adviser for a global machinery company, it took the pair three days to find fulltime work after their move in 2006.
Mrs Green says the higher wages and a change of scenery were behind their decision. Her husband had already worked in Australia and knew there were opportunities available.
“To be honest, we did not really look into anything else – ie the cost of living – but presumed that it would be on par with New Zealand.”
Although they are earning three times what they were in New Zealand, Mrs Green says their wages, relative to their cost of living, are about the same as they were in New Zealand.
They initially found it tough to get accommodation, having moved there in a mining boom.
They have now been in the same jobs for five years, with both their employers paying about 9 per cent of their wages into superannuation funds as well as subsidising private health insurance.
“The job opportunities for us have been amazing, with both of us progressing in our companies over the past five years. Our employers also contribute to our superannuation . . . it’s building up a nice little nest egg for retirement.” Both have completed extra study, paid for by their employers.
They are “absolutely loving” their new life and even a baby due in June has not persuaded them to return to New Zealand, although Mrs Green admits missing friends and family and their local watering holes.
“We both feel that it was the best move for us that we have ever made. We initially only intended on coming over for three years max, save our money and move back to New Zealand to set ourselves up.
“However, we have now bought a home here and don’t intend on moving home any time in the near future,” Mrs Green says.
The Australian Government has introduced a paid parental scheme by which a caregiver is entitled to 18 weeks’ paid maternity leave at the minimum wage, about A$580 a week before tax, she says. Those who do not meet the requirements for paid maternity leave are entitled to a $5000 lump sum.
Childcare costs are about A$70 a day and, due to the high level of demand in a mining community, children need to be booked in about a year in advance.
REVELLING IN MELBOURNE’S CULTURE AND LIFESTYLE
Money wasn’t on Benet Hitchcock’s mind when he and wife Claire Vivian moved to Melbourne. Three months on, and still looking for fulltime work, he couldn’t be happier with the move.
“We’re stoked. We will be moving back to New Zealand because that’s home . . . but we’ve never moved for money, it’s more for the experience. I think New Zealand is an amazing place, but you just can’t beat the culture and the lifestyle in Melbourne.”
The 29-year-old freelance web designer, who is also working part-time setting up sound systems and is searching for a fulltime web position, lives in a one-bedroom apartment with his doctor wife.
“We just love Melbourne. It’s such a fantastic city, it’s really colourful and vibrant and there’s lots of things to do. We just like going out and having nice, cheap food. There’s heaps and heaps of different places to eat – just a huge range compared to Christchurch.”
He is earning A$25 an hour for his part-time work, compared with about NZ$18 at home. His wife’s earnings are much the same as in New Zealand, though she works between 40 and 50 hours a week instead of up to 70.
They have ruled out her working as a locum – where she could be based in Melbourne but fly to areas with doctor shortages – because they believe it places undue pressure on the health system, even though she could potentially earn more.
While some things are more expensive, others are less so. Public transport costs them about A$35 a week, compared with NZ$25 in Christchurch. Parking is more expensive but petrol is cheaper. Going out can be more expensive – with some places charging up to A$11 for a pint of beer – though meals can be as little as A$12 each.
On the outer CBD they are paying A$370 a week for their one-bedroom place, while a friend living in the student area of Northcote, about five train stops from town, pays A$50 a week for her room in a flat.
Mr Hitchcock says they plan to return home eventually to raise a family, though he can see himself staying put. “Claire’s probably more keen to go back than I am. I could totally see myself living long-term in Australia.”
However, he admits the opportunities in Melbourne are a “double-sided coin”. The money is better and the ceiling higher, but as a result the competition is more fierce.
“There is lots of opportunity but if you’re going to do it, you have to come for the long haul.”
CHRIS DID HIS SUMS – AND AWAY HE WENT
Chris Logan sat down and compared how much he could earn and how much it would cost him to live in Australia before pulling the trigger on a move to Sydney.
Within three weeks of his arrival, he had a full-time job, meaning he was gaining experience as well as studying hotel management.
“What I looked at straight away was how much I was earning working part-time in a hotel in Wellington on the minimum entry level wage, comparing that to the same position over here in Australia and, even though the cost of living here is higher, at the end of each week I worked out you have just over $100 extra spending money living over here.”
He earns A$43,000 (NZ$58,000) and expects to go up to A$46,000 soon. He pays A$300 a week for a room, power and gas in a two- bedroom flat. Food and beer are more expensive, but fuel cheaper. Phone and internet are similar.
The surplus income means his lifestyle is better and he has recently returned from a trip to the Galapagos Islands and the Formula One grand prix in Melbourne.
“If someone was coming from England or Ireland or somewhere like that and had the option of either New Zealand or Australia to work for a year, I’d say they’d definitely pick Australia, just for the wages alone. And at the moment the Australian dollar is so strong – that’s very attractive.”
And Australia has a special allure for Kiwis, he says. “There is sort of that general attraction to a prosperous country with a strong economy. At the moment there is a lot of opportunity here which you don’t get the sense that there is so much in New Zealand.”
He would move home for the right job, but doesn’t foresee it happening for some time. “I’ve got the attitude that I can make more money elsewhere in the world to send back to New Zealand and then eventually move back.”
Mr Logan would recommend his friends move over, especially young couples with qualifications, who would find it easy to get jobs and put money away. “I haven’t met a New Zealander over here who is really struggling for work. All the Kiwis I know all find work very easy.
“For a couple coming over here, if they both got full-time jobs even at minimum wage, they could save a lot of money over here. They could save one income I’d say, easy.”
By The Dominion Post
Article: http://www.stuff.co.nz
