Morgan Tait

Morgan Tait is the NZ Herald's consumer affairs reporter.

Income gap growing wide as the Ditch

Photo / Thinkstock
Photo / Thinkstock

Despite rising salaries, Kiwis' pay packets are still well behind those of their Australian counterparts - and the gap is getting bigger.

At the end of last year the average New Zealander earned 26.3 per cent - or $12,800 - less than the average Australian, the latest Roy Morgan state of the nation report reveals.

Kiwi salaries have risen from $35,000 to $48,600 since 2001, but across the Tasman incomes have increased from $38,800 to $61,400.

Evidence of the widening gap is even more pronounced among fulltime workers, with Australians earning 24.1 per cent more than fulltime workers in New Zealand - a difference that 10 years ago was only 6.6 per cent.

The number of Kiwis chasing the Australian dollar has been increasing in the same decade, a record 53,763 people leaving in the 12 months to June last year.

Employers and Manufacturing Association spokesman Gilbert Peterson called the latest figures a "sobering reality check".

"We could do considerably more I'm sure and we need to keep working at it but we have had the global financial crisis to contend with and the earthquake in Christchurch which has been a big challenge, and of course we can do more to lift the productivity of New Zealanders ...

"I think at times people could be more hungry and more ambitious for growth and prosperity than they demonstrate - sometimes they do seem content to enjoy the lifestyle they have got rather than improve and build on it."

He said Australia's mining industry played a large part in its economic success, but some of its sectors, such as manufacturing, were struggling, and demand for New Zealand's agriculture and food production was increasing.

A taskforce was set up as an agreement between Act and National immediately after the 2008 election. It came into action in July 2009 with the purpose of making recommendations on how to close the income gap with Australia by 2025.

But it was disbanded in 2011 after the Government rejected many of its proposals as too radical.

Engineering, Printing and Manufacturing Union director of organising Rachel Mackintosh said low job security, laws that discouraged unionising and a lack of funding for training and up-skilling drove the wage gap.

Welfare reforms and the difficulty of qualifying for a benefit had made workers insecure in their jobs.

"They are less likely to stand up for themselves and push for higher wages," she said. "People are scared to lose their jobs and accept the lowering of wages and that drives wages down."

Labour Party labour spokeswoman Darien Fenton said New Zealand had to find a way of significantly lifting all wages.

A spokesman for Finance Minister Bill English said Australia did not have to struggle through a recession like New Zealand did, and some financial performances had been better here.

He said the Government had a wide range of programmes aimed at increasing incomes and jobs.

Pay packets

2001

* NZ $35,000 (average income) NZ $44,000 (average fulltime)
* Aust $38,800 (average income) Aust $46,900 (average fulltime)
* The average Australian's income was 10.9 per cent more than the average New Zealander's.
* The average fulltime Australian worker earned 6.6 per cent more than the average fulltime New Zealand worker.

2012

* NZ $48,600 (average income) NZ $61,000 (average fulltime)
* Aust $61,400 (average income) Aust $75,700 (average fulltime)
* The average Australian's income was 26.3 per cent more than the average New Zealander's.
* The average fulltime Australian worker earned 24.1 per cent more than the average fulltime New Zealand worker.

Read more: Happiness in the Australian land of milk and honey

- NZ Herald

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