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Andrew Dickens: We need to pay people more

Author
Andrew Dickens,
Publish Date
Mon, 24 Apr 2023, 1:09PM
Photo / File
Photo / File

Andrew Dickens: We need to pay people more

Author
Andrew Dickens,
Publish Date
Mon, 24 Apr 2023, 1:09PM

It didn't take long, did it, for the headlines to change.

One moment the Prime Ministers of both New Zealand and Australia were trumpeting a new deal for Kiwis living in Oz. Nek minnit. New Zealand is petrified about a brain drain.

The new deal means a faster and cheaper path to residency more in line with the pat for Aussies here in New Zealand. And that means a faster line to the dole, and pensions and healthcare for Kiwis in Australia.

That makes it more attractive if you're wanting to plant some roots in a place.

But the real kicker that makes Australia so attractive for New Zealanders is the pay. You get paid more there. You pay more tax principally because there are 3 tax levels. Rates, State taxes, and federal taxes. But you get paid more and stuff is cheaper there. So on balance it's more attractive.

So my real question is why do you get paid more in OZ?

Many say that the population is bigger which means more demand and there's a mineral wealth that flows into the economy. And while that is true it masks the bigger truth that Australians are paid more because they chose to be.

And the opposite is true. New Zealanders are paid less because we also chose to be.

The Herald compared pay this morning. Nurses, Teachers, and Doctors are paid, on average, 20 to 30 thousand dollars less in New Zealand. But who decides their wages. We do. As taxpayers. As politicians. As a country. Principals are currently on strike while simultaneously looking at better pay across the Tasman.

So in a competitive international labour market we are not as attractive as we could be.

And yet we baulk at paying nurses and teachers more. There's conniptions at any raise of the minimum wage and then complaints that we don't pay well enough. There’s horror at Fairpay legislation but Australia has had Fairpay legislation for decades.

This is not some issue that's popped up because we've got socialists in charge. For 30 years we've been hearing that New Zealand's low wage and low productivity labour market was profitable in the short term but would eventually bite us in the bum. Welcome to bum biting season

But not all is lost. Many have argued workers are not coming because of our immigration settings. And yet as Liam Dann reported yesterday migration is smashing records.

The net migration gain of 11,700 in February this year was the second highest for any month ever.

We're on track for a net gain of 100,000 in a year. So people are still finding reasons to choose New Zealand.

In fact, according to the OECD, New Zealand is currently the most desirable destination for highly educated migrant workers.

The OECD has just launched its Indicators of Talent Attractiveness (ITA) index, and New Zealand tops the list for “high-educated workers”. We come in fifth for attracting entrepreneurs, and fare less well (15th) for attracting start-up founders.

So New Zealand is not a basket case. But we do have to figure out how to pay people more.

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