Labour's Jacinda Ardern and National's Nikki Kaye on how we can attract Kiwi expats back to New Zealand.
When it comes to the debate about Kiwis moving abroad there are masses of contradictions.
I went away on an OE. I packed my bags not for Europe but for New York in a slightly unwise attempt to be different. About 6 months later when I was finally on the cusp of a visa, I discovered why everyone goes to London: it's just a little bit easier.
So I packed my bags again and headed to the UK with my sister not far behind.
No one should be opposed to Kiwis going away for experience; to travel, live and work in areas we may never have a chance to work in New Zealand. Only at the end of my OE, I came back, and my sister didn't. That's the difference.
And that's the difference with the huge number of Kiwis heading to Australia as well. We're bleeding talent and skills we can't afford to lose. In the past year, 84,000 Kiwis left the country permanently. Of those people, 48,000 left permanently for Australia, and we keep hitting a record for departures almost every month, it seems. That's cause for concern for all of us, not least John Key who, while in opposition, tried to call for a vote of No Confidence based on the numbers permanently migrating at a time when they were much lower than they are now.
If we agree that we should worry about the number we are losing for good across the Tasman, surely we have to look at some of the differences between them and us.
Firstly, they earn more. You've all heard the stories, the third cousin who's gone over to work on the mines and seems to earn more in a week than you do in a month, or so you're told. It's not all an anecdote. Since National has been in Government, the wage gap between New Zealand has increased by an additional $32 a week.
But Australians don't just earn more, they retire more comfortably too. Employer contributions into their universal savings scheme are set at 9%, and climbing. Ours are currently set at 3%
Herein lies the contradiction: If we're really worried about closing the gap with Australia and keeping more of our skills and talent in New Zealand, we cannot keep racing to the bottom. The answer has to be decent jobs with decent wages, and more of them. That's where our wages policy comes in. I have heard some argue that a wages policy is harking back to the past. Well, we'd have to go all the way back to the 80s to find the last time we matched Australia in terms of income levels. Over that time our productivity may have increased by 40%, but our wages have only gone up by half that. Australia has maintained a wage system that allows industry standards to be set. We want to do something similar, while keeping in mind our own special circumstances and the large number of small businesses in New Zealand. I think we have got the balance right.
The same goes for our savings scheme. Labour, like Australia, wants a universal savings scheme, and to lift employer contributions to 7%. We again are mindful of the impact on businesses, so we will lift contributions at 0.5% a year, lower than predicted increases in wages, and allow savings scheme to be factored in to wage rounds by employers.
Finally there's the large elephant in the room: what about the jobs? I know for my family members who have gone to Australia, it's been the availability of work that has attracted them. We don't have to become an open cast mine to compete; we just need a plan. Huge swathes of jobs have been lost out of manufacturing via a government who refuses to listen. The solutions are there: incentivising research and development, encouraging investment in the productive economy, and supporting exporters by addressing our high and volatile Kiwi dollar. And, in the meantime, training our young people for the jobs where we know we have skills shortages.
It's time that National stopped pretending that they can keep kiwis here, let alone attract them home, when they have no plan to create jobs, lift wages, or implement the kinds of policies that invest in our workforce. I don't want to compete in a race to the bottom. I would much rather just bring my sister home.
When I lived in London I used to have many discussions with friends as to when and why they would come back home. A lot of people will do an OE as I did, and eventually come home. However, from my experience people make choices about where to live based on which country will provide the best overall standard of living for them and their families. The best thing we can do to bring NZ expats home, is to deliver both a strong economy with decent paying jobs and a society that ensures good quality of life.
New Zealanders have been leaving for Australia for several decades. Almost 300,000 New Zealanders left during Labour's time in office. New Zealand's competitiveness with Australia has declined over decades. We have been upfront that we believe it is going to take time to turn it around. The best way we can do that is by improving New Zealand's international competitiveness.
I think we need to acknowledge that our economy was in recession before the global financial crisis. Under the last Government New Zealand had high inflation, high interest rates, forecasts of never-ending deficits, and ever-rising government debt. Since then we have been through three tough years - the global financial crisis, major earthquakes in our second-largest city, and the finance company collapses. Our first challenge has been to steady the ship, help New Zealanders through the recession, and get our debt under control. We have achieved that, while continuing to protect the most vulnerable in society. While dealing with these challenges we've also been building a platform for faster growth. We have begun rebalancing the economy towards exports, savings, and productive investment, and away from borrowing, consumption and government spending, which characterised growth in the mid-2000s.
We've improved the tax system, reduced the size of the bureaucracy, and invested in modern infrastructure. We've also boosted funding for science and innovation, made it easier to do business, reformed the financial sector, and pursued an ambitious trade agenda. Our plan is working. The economy has now grown in eight of the past nine quarters, and 63,000 new jobs have been created in the past two years. This is 20,000 more than forecast in the May Budget. We expect to see another 150,000 jobs created by 2016. Wages are growing. After-tax wages have, in fact, risen by 10 per cent over the past three years, after allowing for inflation. The after-tax average wage in New Zealand has, in fact, grown slightly faster than in Australia over the last three years. These are small but positive steps to help bring our expats home. New Zealand is better placed than many other countries to manage what will remain an uncertain global environment. We're getting on top of our government debt by keeping it below 30 per cent of GDP, and we'll be back in surplus by 2014-15.
Looking ahead, it's important we maintain momentum by creating real and durable jobs based on exporting and trading with the rest of the world, rather than temporary jobs based on borrowing and government spending. The outlook for New Zealand is hugely positive - interest rates are low, commodity prices are high, our trade with India and China is booming, we're very competitive with Australia, and the job market is improving. More expat New Zealanders will start to come home if we stick to a responsible economic plan that continues to increase jobs and wages and makes the best of opportunities in the Asia Pacific region. A faster-growing economy supporting more real jobs and higher incomes will help us pull more expats home.
Some New Zealanders make the decision to come home when they want to start a family. At this election we are campaigning on delivering a Future Investment Fund that would invest $1 billion into building modern 21st Century schools. New Zealand's schools provide some of the best education in the world. But many of our school buildings are old, leaking, falling apart, earthquake-prone, and out-of-date for the needs of today - let alone the challenges of tomorrow. We've substantially increased funding to build and upgrade schools. We've fast-tracked school building work through the recession to build new school buildings and we've also provided extra resources to make our schools ready for ultra-fast broadband. By modernising and transforming New Zealand's schools we can better ensure that they meet the demands of today's students. 21st Century schools look very different from older schools. They have 'flexible teaching spaces' that can be expanded or shrunk depending on need. They have break-out rooms for small groups and they are wired up for the very latest technology. Providing world-class schools is another reason for expats to choose New Zealand to come home to.
Another key factor in luring our expats home is about providing better and more affordable places to live and work in. Some people will choose to live in more rural parts of New Zealand and some will choose our cities. We need to ensure our cities are world-class. I have been fortunate to visit many other cities in the world but none in my view are as generously gifted with natural resources as Auckland. From the beautiful Hauraki Gulf with its islands, to the beaches of the North Shore, to the volcanic cones peppering our city, to the rugged and green Waitakere ranges, to our expansive waterfront. Unfortunately, there has been significant underinvestment in key infrastructure for more than half a century. Under our new governance system we now have a better opportunity to improve housing affordability and our transport system with one plan for Auckland.
The Auckland Plan is about ensuring that we are focused on delivering the several hundred thousand houses required for our largest city. Our ability to get this right will impact on housing affordability and will affect whether some expats choose to come home. The delivery of key transport infrastructure like the Victoria Park Tunnel and this Government's investment in the electrification of rail, show we are making huge progress to improve our transport system - there is more to do. The Wynyard Quarter with its public spaces is a fantastic asset to our city, and the reform of Auckland's local government system has ensured that we are now on the way to opening up the rest of our waterfront. Auckland can become more competitive with Sydney and London as a destination for Kiwis to work and live.
There is no one policy that will bring more expats home. Only through a combination of policies that improve wages, increase jobs, improve housing affordability and better schools will we see more New Zealanders coming home. In a world where the competition of the future will be for people and ideas, we must remain focused on ensuring that New Zealand is the destination of choice for our expats.
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