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Jumping the ditch

I came to NZ from Oz almost 50 years ago and although my visit was intended to be just a bit of a break and a working holiday I ended up staying.

Back then there was not that much difference between Oz and Godzone so I found the more benign environment (no venomous snakes or spiders to worry about) and the "we're all just Kiwis" culture to be very seductive and although NZ's standard of living may have been slightly lower, the quality of life was great.

Of course half a century is an awfully long time so much has changed since I first arrived as a fresh-faced young man.

Sadly, many of those changes have not been for the better and I fear that we're about to see a new exodus of young Kiwis who are about to jump the ditch to greener pastures.

Recent announcements in the wake of the PM's visit to Oz will have made that jump more attractive than ever to young Kiwis who are seeking to earn more money than they ever could here in Godzone.

Unfortunately, those most likely to catch a plane to Oz are also most likely to be the people we most need in NZ right now.

Teachers, doctors, nurses, skilled tradesmen... they are the ones who stand to benefit most from the (on average) $24K per year in higher wages that Aussies get when compared to their Kiwi counterparts.

Not only will they earn more but they'll also likely pay less for their food, accommodation, petrol and other staples so that extra money will go a lot further.

In fact, if you're a young couple living in NZ now and hoping like hell that one day you'll be able to afford a house and have a family then it's hard to argue against the suggestion that it might be easier to scrimp and save while living and working in Australia.

So where does that leave us... the ones who are left behind?

Well I guess we'll have to rely on attracting doctors and nurses from third-world countries and trying to convince school-leavers to take up apprenticeships for much-needed trade positions. The problem with that is that those qualified immigrants are just as likely to use New Zealand citizenship as a back-door to gaining Australian residency and those apprentices may just skip off to Sydney or Brisbane as soon as they get their trade certification.

In short, we really do need to do something to redress the growing economic imbalance between Oz and NZ.

Kiwis are simply not productive enough and we've not been smart enough to focus on building industries that are unaffected by our distance from key export markets.

We're also suffering the tyranny of oligopolies in everything from our supermarkets to our building supply industries.

A lack of productivity and smart industrial investment means low wages and those monopolies, duopolies/oligopolies have created outrageously high prices. Mix the two and you get a standard of living that is far, far lower than that on offer just a few thousand Km to our West.

Yes, Australia has the benefit of huge mineral wealth that provides solid export receipts but NZ has been repeatedly promised wise direction from government with things such as "The Knowledge Wave". Sadly, those promises have been nothing but hot air and even when taxpayer funds are invested in a tech venture the investment decisions are made either by cloth-heads or those who are part of "the old boys' network" that looks after its own.

Another thing to consider is the taxation systems and how they differ between Oz and NZ.

Over in Oz you get to keep the first $20K or so of your earnings... all of it!

Here in NZ, we pay tax on every single cent we earn, right from the very first one.

NZ has made an industry of taking money from the poor, wasting inordinate amounts of it through various state-run job-creation schemes such as WINZ and then (after all the inefficiencies and cups of coffee involved) handing a fraction of that money back to those who could least afford to pay those taxes in the first place.

As I said... one of NZ's biggest problems is its lack of productivity and all those in the government employ whose only job is to collect taxes then shuffle the notes before handing some back are a prime example of such non-productive employment.

Why is NZ one of the very few countries left in the world that doesn't have a tax-free earnings threshold? Just how much effect is this one thing alone having on crushing our standard of living when compared to our peers?

Why is it that whenever governments (usually around election time) start talking about tax-cuts, they miss the opportunity to introduce this tax-free threshold that would effectively treat *everyone* equally in terms of the benefits it delivers?

Ideology? Stupidity? Greed?

I have no idea but, so long as we have dullards in power who seem addicted to raping the wallets of the poor then I can't see things improving much.

Ah well, that's a rant if ever I wrote one :-)

What do readers think about the increasing economic divide between Oz and Godzone?

Is it something we could address through sound economic policy, smart thinking and a commitment (rather than just rhetoric) to refocus our commercial/industria focus?

Or will we forever be Australia's poor cousin and suffer the penalties that produces?

Carpe Diem folks!

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