Kiwi workers fall $6,600 behind Australians

Tue, 10 May, 2022

“New Zealand is being thrashed in the trans-Tasman battle for ideas, talent and capital”, says ACT Leader David Seymour.

“Australian workers have grown $6,600 a year better off than their Kiwi counterparts since 2017.

“The Prime Minister claimed in her pre-Budget speech one year ago, ‘We need to be aspirational, and have a plan’. There’s no evidence of aspiration or a plan in a yawning wage gap that’s as big as the Tasman.

“Our productivity has grown by just 2.6 per cent since 2017, leaving us behind parts of the former Soviet Union, and 31 per cent lower than the UK. Our GDP per person is now closer to former communist countries like the Czech Republic than Australia.

“One reason our productivity is so low is because, according to the OECD, it’s harder to send overseas investment to New Zealand than to China, Saudi Arabia, and Myanmar, leaving Kiwis with less capital to work with.

“We attract less investment than nearly any small country. The amount of capital Kiwis have to work with is embarrassingly low. Investment drives productivity and wage growth because workers use more and better technology to produce more and better goods and services.

“We’ve long conceived of ourselves as a prosperous first world country. Today, we’re not even close to places like the UK.

“The wage gap between the median New Zealand and Australian worker has grown by $3.20 an hour, or $6,600 a year, since 2017.

“It’s no wonder 50,000 New Zealanders considering joining the brain drain for better wages overseas. Low productivity means people leave for higher wages. People can earn more for doing the same thing in a different place. We have an enormous diaspora. Our estimates show 23 per cent of people born in New Zealand are currently living overseas.

“We don’t attract enough investment, so we don’t grow productivity and wages, so people leave. It becomes self-reinforcing. We’ve been poorly served by two political parties who each say the other is ruining the country, but will run it the same way if it gets them into office.

“One element of ACT’s Real Change Budget would remove Overseas Investment Act restrictions for investment originating in friendly democratic, OECD member countries. We need to show the world we trust them and are open for business. In fact, Damien Smith’s Member’s Bill has been drawn and is before Parliament right now.

“Our country is in real danger of slipping away from first world status. We can’t afford another business as usual budget. Real change means asking who we want to be as a nation for generations to come, not who gets what this election.

“The choice we now face is the same as we faced a generation ago. Do we want to carry on in comfortable decline, or do we want to make our country the preferred destination for ideas, talent and investment? The real question is: Can we afford not to do real change?

“We can’t just evict the current government. We need to evict its ideas, too, and deliver real change.”