A Herald snapshot of pricing on both sides of the Tasman shows that, in nominal terms, life in Australia is not necessarily that much cheaper than in New Zealand. Photo / Getty Images
A Herald snapshot of pricing on both sides of the Tasman shows that, in nominal terms, life in Australia is not necessarily that much cheaper than in New Zealand. Photo / Getty Images
As debate heats up about the risks of a “brain-drain” to Australia, new data shows that when it comes to the cost of living, overall prices have been rising faster across the Tasman.
Just don’t look too closely at the food price inflation - where cyclones and flooding have Kiwisforking out more than Aussie consumers.
Data released yesterday by the Australian Bureau of Statistics shows the annual inflation rate was 7 per cent for the year to March 31.
That was slightly higher than the market expectation of 6.9 per cent and compares to 6.7 per cent in New Zealand for the same period.
By sector, New Zealand experienced annual food price inflation of 11.3 per cent - boosted by a 22 per cent rise in fresh fruit and vege prices for the year. This compares to 8 per cent across the ditch.
Alcohol and tobacco also rose faster in New Zealand than in Australia at 7.1 per cent and 4.4 per cent respectively.
But elsewhere things looked better on this side of the Tasman.
Housing costs - including construction costs and rent - rose significantly less here as did transport costs, and recreation.
Meanwhile, a Herald snapshot of pricing on both sides of the Tasman shows that, in nominal terms, life in Australia is not necessarily that much cheaper than in New Zealand.
Comparing online grocery shopping, the cheapest bread at Countdown NZ comes in at $1.30 for Essentials white bread compared with Australian supermarket Woolworths’ cheapest bread at NZ$2.61 (A$2.40).
Lamb shoulder chops were $14.90 per kg in New Zealand but $17.43 in Australia, in line with a drop in meat prices in the last few months.
Across the 10 products compared, five were cheaper in New Zealand with Aussies paying more for bread, lamb, toilet paper, lettuce and apples.
Kiwis are paying more for cheese, milk, cooking oil, eggs and tomatoes.
A dozen free-range eggs cost almost twice as much in New Zealand, coming in at $10.10, with prices at $5.23 (A$4.80) in Australia. Consumer NZ said egg prices were up 63 per cent on last year.
Cheese price differences were also notable at $13.50 for a 1kg block at Woolworths Australia with the same block costing $18.50 at a Kiwi Countdown supermarket.
“The lack of competition in New Zealand’s supermarket sector puts shoppers here at a disadvantage,” said Consumer NZ’s Jessica Walker.
She said, “Australians benefit from a more competitive supermarket sector with the likes of Aldi offering sharply priced specials which Woolworths and other retailers have to compete with.”
Australia’s Bureau of Statistics data showed that the average rental price across the country came in at $480 (A$445).
Median weekly rent was highest in the Australian Capital Territory (ACT) at $600 per week with the lowest in South Australia at $410 per week.
Childcare comparison website Care For Kids showed Australia’s national daily average for childcare came in at $135 (A$124.68), compared with a national NZ average of $60 a day.
Medical bills were also notably different across the two countries.
Aussies are taxed with a flat 2 per cent Medicare levy on their income, comparable to NZ’s ACC levy (1.33 per cent).
In terms of vehicle registrations, while Kiwis can expect to pay $102.90 for an annual rego on a private petrol-powered car, Aussies can pay up to $900.
Queensland’s rego renewals come in at the cheapest at almost $300 at the lowest price while Tasmania’s lowest rates are over $600, although that can include third-party insurance.
Of course, direct price comparisons don’t factor in wage differences.
Australian Bureau of Statistics reports the average wage across the ditch was A$94,000 - equivalent to NZ$102,500 - (year to November) and Statistics New Zealand says average weekly earnings here equate to an annual wage of $77,844 (as of the year to December).
The Australian city of Adelaide is currently suffering the largest spike in prices with the annual rate running at 7.9 per cent.
Yesterday’s Australian inflation data showed that Adelaide is currently suffering the largest spike in prices with the annual rate running at 7.9 per cent.
In contrast, Perth’s annual inflation rate was the lowest at just 5.8 per cent. Annual inflation in Sydney was 7.3 per cent but just 6.8 per cent in Melbourne.
Unlike its New Zealand counterpart, the Reserve Bank of Australia paused its rate hikes last month - leaving the official cash rate unchanged at 3.4 per cent.
Economists in Australia expect the RBA to deliver another 25-basis-point hike when it meets next week.
Sydney-based Capital Economics said the RBA was “set to tolerate a less rapid return of inflation to its target”.
It had hiked rates less aggressively than most other central banks, said senior economist Marcel Thieliant.
“We think the bank will also be a laggard when it comes to policy easing,” he said. “Our forecast is that the bank will only start to cut interest rates in [the second quarter of] 2024 rather than [the first quarter] as predicted by the analyst consensus and financial markets.”
In New Zealand, the RBNZ has been accused by some economists of being overly aggressive in its hiking cycle.
It surprised the market with a double (50-basis-point) hike in February and is widely expected to deliver one more 25-basis-point hike in May - taking the Official Cash Rate to 5.5 per cent.
Economists forecast inflation in New Zealand won’t be back in the RBNZ target range until 2025.
