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The lucky country

Written By: - Date published: 8:10 pm, February 21st, 2008 - 34 comments
Categories: workers' rights - Tags:

I see the wage-gap is getting another airing on Stuff today, here’s the first few pars:

While the gulf between New Zealand and Australian pay packets is narrowing slightly, it’s still a no-contest.

Australian full-time workers earned an average of $A1162 ($NZ1350) per week in the year to November, according to Australian Bureau of Statistics figures released today.

That compares with the New Zealand average weekly income of $667 from the last Statistics New Zealand survey, released in October.

Comparatively, New Zealand’s earnings increased by 9.4 per cent while Australians enjoyed a five per cent increase.

Now this shows two things:

Firstly, the only way we can catch up is through higher wages. Remember the total tax take on an average wage is around 26% so even an absurdly destructive 0% tax rate would leave us well behind the Aussie average.

And secondly, the wage gap is closing, but slowly. In fact the wage gap began in the dying days of the fourth Labour government (pretty much ACT) and then accelerated under National with the outrageous attack on working New Zealanders that was the Employment Contracts Act.

And thirdly (before I forget), No John, the answer is not to have our wages “drop“.

Update: the original story has been corrected to a more methodologically comparable survey that puts NZ average weekly income at $957. This is still places NZ income approximately 30% behind Australian incomes and that is still a higher figure than the total tax-take on an average NZ income.

34 comments on “The lucky country”

  1. Dan 1

    Let us watch English change his tune. He has for too long played the Australian card. It is going to boomerang this election campaign.

  2. IrishBill 2

    I agree with that. I’ve never understood why Labour never did so. I suspect they didn’t want to offend the business community by talking about wages. Funnily enough, now they’ve given them a massive tax cut and we’re the second best country for ease of doing business many in the business community are rabidly turning on them like spoiled brats. I guess it’s like the childbeaters say: “spare the rod, etc”

  3. burt 3

    Hey what percentage has the PM’s salary risen since 1999 ? What percentage have the average earners risen since 1999 ?

    About 80% for the PM and about 25% for the average worker. It’s a disgrace! The self serving Labour party need to go before they sell us to the highest foreign bidder, that is if they haven’t done so already.

  4. IrishBill 4

    Burt, I think you’ll find that parliamentary pay rises are across the board and are voted on by the house. One might equally says the leader of the opposition has seen his pay rise out of step with the rest of the country and is even more disgraceful as he has claimed the rest of us should have our wages drop!

    I await your letter to the editor on that disgrace.

  5. Dean 5

    “Firstly, the only way we can catch up is through higher wages.”

    Is that actually the limit of your understanding or imagination, or is it just another catch phrase you’d like to cry out?

    I mean, there absolutely COULDN’T be other answers, could there?

  6. IrishBill 6

    Let’s see Dean. Our wages are lower than theirs. We want to close the wage gap. Well, I guess their wages could come down but outside of that I can’t see how else you propose to close a wage-gap. Am I missing something?

    By the way, your comments are getting caught in the dad-trap. I’ll try to get this sorted out.

  7. Santi 7

    Labour had eight a half years to close the gap and has not done it. Why?

    Until when will you continue blaming every malaise on previous administrations when it’s blatanly clear Labour has failed. Economically we should be much closer to Australia not trailing from an ever-growing distance.

    Blame Clark, Cullen and the gang of academics, teachers and unionists that make up this socialist government. Fess up!

  8. IrishBill 8

    Santi, did you read my post? Or the linked article? The wage gap is closing but slowly, it pretty much opened up to a wage-gulf under National. I think Labour could be doing a lot more to fix this problem faster but I know that National will make it worse. How? Because John Key says he would “love to see wages drop”. Yep, that’ll fix the wage gap. Probably by reverse-psychology or something just as clever.

  9. Dean 9

    “Let’s see Dean. Our wages are lower than theirs. We want to close the wage gap. Well, I guess their wages could come down but outside of that I can’t see how else you propose to close a wage-gap. Am I missing something?”

    Quite possibly. Do you think the only reason their wages are higher than ours is because employers here are simply paying less? Because this is the way you are representing the situation at the moment. Or do you agree that there might there be other factors?

    “By the way, your comments are getting caught in the dad-trap. I’ll try to get this sorted out.”

    It’s cool. I’ve emailed with Lynn about it and he’s explained the situation. I have no problem with this as long as the likes of D4J don’t get to post again.

  10. IrishBill 10

    Or do you agree that there might there be other factors?

    Dean, look I might be a bit slow here but what other factors could there be that make up a wage gap other than that one set of wages that is lower than a second set of wages, thus there is a “gap” between the wage rates and therefore a “wage-gap”? Honestly, I just don’t understand. Can you please elucidate?

  11. Dan 11

    Santi, which side are you on? Do you want higher wages like Australia? Then why blame the government who does not pay the wages? You should blame your business friends who cannot see the merits of a higher wage economy like Australia’s. You support Key who wants lower wages but slam the government because our wages are not high enough.

    If Key is confused, I guess it is understandable his supporters cannot see past the conundrum they have created for themselves.

  12. burt 12

    Santi

    Labour had eight a half years to close the gap and has not done it. Why?

    I bet they have done it for themselves, I wonder if the NZ PM has pay parity with the Aussie PM.

    I guess large pay rises (and as IrishBill notes: This includes all MP’s, not just Labour MP so it’s OK) for MP’s is OK, it stops them taking off to Aussie and we would be oh so miserable without them.

  13. IrishBill 13

    Burt, I’d very much like you to point me to where I said it was ok. Or are you telling more lies about a moderator (because you know how that will finish don’t you)?

  14. burt 14

    IrishBill

    You said:

    Burt, I think you’ll find that parliamentary pay rises are across the board and are voted on by the house. One might equally say…

    I agree one might equally say that it’s a disgrace that the opposition has had such stellar pay rises while plotting to eat peoples babies or whatever it today they are going to do.

    However I inferred from the first bit “I think you’ll find that parliamentary pay rises are across the board and are voted on by the house.” that it’s not just Labour that have had pay rises and it’s not the Labour party who ordered them. All have had them so it’s OK they got them.

    Perhaps to prevent me from offending a moderator you could explain why you eluded to the opposition. I was pointing out the failure of Labour in the last 8 years to address wages in general when they have had their salaries adjusted quite nicely over the same period.

    I have commented before that I would be interested to see a comparison of the PM’s salary in 1999 & 2007 compared to the average house price in Wellington for the same years. Then it would be great to compare that to the median wage. You already have median wage data, what do you reckon, the time is right while pay rises or falls are the hot issue of the day.

  15. outofbed 15

    It it Me or is Burt being more obtuse then normal?

    The post is about the wage gap between the Average Aussie weekly income and the NZ equiv and ways to address that.

    Burt if you want to see comparisons of PM salary , house prices in Wellington and the average wage, feel free to do the research and post it on your blog.
    But would it be nice to stick to the topic in hand

  16. r0b 16

    Burt: I agree one might equally say that it’s a disgrace that the opposition has had such stellar pay rises

    So Burt, I never picked you as the politics of envy type. Perhaps next time you’re “drooling” over your rental and capital gains…

    Key hopping on Hobsonville

    … you can do the math comparing them to the average wage.

  17. Matthew Pilott 17

    Hey all, I was looking at the link, and it seems stuff has got a new figure for NZ (despile using the average, and not the median, but anyway) and:

    That compares with the New Zealand average weekly income of $957 from the last Statistics New Zealand survey, released in October.

    IB – did the original article say $667? A commentor on KBB mentioned this so I had a look. I wonder when it changed, and where the retraction/correction notice is?

    Burt – who cares about politicians’ wages. Worldwide, they always seem to get pay rises. That’s not a constructive contribution to this thread.

  18. IrishBill 18

    MP, the original figure was $667 and is based on the NZ Income survey, I suspect they are using the LCI for the correction which includes associated costs but I haven’t checked. The question is what was the methodology used for the Aussie stats and which of the three main sources here (the LCI, NZIS or QES) are the methodologically closest. It’s nice to be able compare apples with apples.

  19. Matthew Pilott 19

    Helluva gap between the two figures quoet thus far though!

  20. ghostwhowalks 20

    When I got back from Australia in 1988 I got a 20% pay rise for a similar job in Auckland.
    So we were ahead up to the 90s.

  21. Santi 21

    “So we were ahead up to the 90s.”

    Are you implying we lost it all in the terrible, disgraceful days of the National government until 1999, and have been unable to get parity since (under the aegis of socialist Labour)?

    Are you a cretin, ghostwhowalks? Your impersonation is good, though.

  22. Tane 22

    Na, the gap was around 20% up to the 90s, then blew out to 30% under National. Since then it’s stabilised.

  23. Steve Pierson 23

    Don’t knwo if anyone noticed but it compares average fulltime wages in Aussie to average income in NZ. Tha’ts obviosuly going to make the gap apepar bigger than it is. Is this the quality of journalism we have to expect from the NZPA these days?

  24. Santi 24

    Steve Pierson, Professor of English: did that article from Steyn hurt?

    It appears so, because I can almost hear you breathing through the wound.

    IrishBill says: you are trolling santi and it is dull. Keep this up and I’ll ban you.

  25. dave 25

    could it have been “” stabilised” ( in other weords the gap is getting bigger but not as big as before – which is bad enough) because Aussies are not getting as high pay rises compared with NZ.

    Could someone put the tax equation in this to see how better off we are in Aussie. Yep, you`re better off in Aussie, way better.

  26. outofbed 26

    Santi Does being a Troll hurt you ?
    It appears so because as I can see you talking through your arse

  27. Tane 27

    No Dave, the gap has stopped getting bigger.

  28. dave 28

    so how come aussies on average get increasingly higher pay rises than kiwis if trhe gap is getting smaller?

  29. Dave – read the bloody article and the post. You can read can’t you? It clearly says NZ wage growth has been higher than Australia’s but not high enough to close the gap. Clearly Australia doesn’t get increasingly higher pay rises than Kiwis but did so during the 90’s. FFS this place seems to be attracting more and more illiterate righties…

  30. Steve Pierson 30

    the Dompost article today compares full time wages in both countries, http://stuff.co.nz/4409967a11.html the gap is smaller and NZ’s wages are growing but more can be done, like supporting the Bunnings workers

  31. Horisthebear 31

    Robinsod – et al.

    Wage growth has to come from either reduced costs, reduced profits, or increased productivity, (ie out of a share of increased profits). Non Wage Costs in NZ are rapidly increasing (eg energy) profit levels in NZ are relatively lower than Australia so increased wages have to come from increased productivity. In NZ productivity growth is very low. We have to work smarter not harder. I would for one be happy to pay all my staff $500 per week more if I could afford it. I can’t. I could pay some this if I replaced some with capital, but I can’t. National will increase productivity, ergo wage increases Labour in the last 8 years has not. Also the real after tax position is critical there has been plenty of debate on this on many blogs. Bottom line if you are truck driver and want to make $150k per annum it ain’t going to happen anytime soon in NZ, but there are a load of vacancies in Aust.

    If you also get behind the wage growth figures and actually look at the non Government comparison it is quite stark. Government wage levels in NZ have been increasing at an above average rate. Non Government wage have not and has been well below the Australians.

    Yuors an Illitirite Righty.

  32. Oh Dear, Horis – currently we are exporting about $12bn in profits to overseas countries. We are not recouping anything like that from our investment overseas. There’s plenty of money mate – we’re just not getting to see it.

  33. dave 33

    Tane and Porter,
    I was responding to Tanes statement that ” the gap has stopped getting bigger”

    And POrter, I m taking about the dollar gap, not the percentage gap.

    That means the gap must be getting smaller or staying the same. Sure aussies enjoyed a 5 percent increase and Kiwis a 8.9 percent increase, but when, in dollar terms, their 5 percent increase is larger than our 8.9 percent increase.. gee, thats a bigger gap than before the increase…meaning the gap is bigger. Larger. Wider. More.Increased.

    You`re better off in Aussie, way better.

  34. Leftie 34

    Horisthebear said: “National will increase productivity”

    How will they increase productivity?

    If these words somehow become action under National, there is no guarantee that productivity gains will be passed on to workers.

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