The boot could soon be on the New Zealand worker's foot as the high wages sucking skilled labour to Australia increasingly drives its businesses here.

Woolworths Australia this week moved a contact centre to Auckland, citing lower costs among the benefits, following similar expansion plans for cigarette manufacturing, food processing and media work to New Zealand.

"Labour does not want New Zealand to become Australia's Mexico," said the party's finance spokesman, David Parker, criticising the influx of lower value jobs.

But BNZ chief economist Tony Alexander had a different warning for New Zealand businesses.


"Get ready for a rapid tightening of the labour market," Mr Alexander said, suggesting there could be skill shortages next year.

"After four tough years, once the boot shifts to the other foot, they [employees] will be asking for a wage catch-up... They've got a lot of catching up to do."

Businesses should look to capitalise on Australian firms shifting here and hiring, he said.

"Expect to see a lot more of it in the coming year."

Heinz-Wattie's this month opened a $24 million distribution centre in Hastings as it cut jobs in Australia, while Imperial Tobacco announced it was expanding its manufacturing in Wellington to replace its cigarettes currently made in Sydney by British American Tobacco.

Both developments follow earlier moves by Canon and McCain.

Australian Associated Press last year also expanded its New Zealand offices to about 50 workers, said senior union organiser Paul Tolich.

But the expansions also came as the number of Kiwis moving to Australia surged 25 per cent in a year.


Australian wages are about 30 per cent higher than New Zealand's.

Macquarie University's centre for workforce futures director, Ray Markey, said the pressure would continue as the mining boom pushed up wages and costs in Australia.

It was easy for Australian businesses to shift some operations to New Zealand because of the two countries' many similarities, he said.

"I don't think a low-wage economy is a way to go for the future, and it's not going to help increase productivity... I wouldn't want a call centre-based economy," Dr Markey said. "But I'm much more optimistic if manufacturing is shifting."

Finance Minister Bill English did not comment yesterday, but last year attracted criticism for saying New Zealand's lower wages were attracting investment. "We have a workforce that is better educated, just as productive and 30 per cent cheaper [than Australia]," he said at the time.

* Imperial Tobacco cigarette manufacturing (Petone, Wellington) +50 jobs.
* Woolworths contact centre (Auckland), +40 jobs.
* Heinz food processing (Hastings), +$24m investment.
* McCain food processing (Hastings), +$19m investment.
* Canon call centre (North Shore), +80 jobs.
* Australian Associated Press, about 50 jobs.