A start to closing NZ-Aust wage gap

New Zealanders’ after-tax average earnings have increased faster than those in Australia in the last couple of years.

Finance Minister Bill English said that was because Australia has had higher inflation and smaller tax cuts than we’ve had on this side of the Tasman.

“As a result, the wage gap between the two countries has actually narrowed slightly.

“We are not getting too excited about that, because we are such a long way behind Australia to begin with. But it’s a good start.”

It’s also a welcome reversal from the widening gap which happened under Labour.

Since September 2008, real after-tax wages in New Zealand have increased by 8.7 per cent. Using a comparable series, Australia’s real after-tax wages have increased by 4.8 per cent in the same period.

“By comparison, New Zealand wage growth significantly lagged Australia’s in the nine years to September 2008. Over that entire period, New Zealand’s real after tax wage growth was a paltry 3 per cent, compared with 19 per cent growth in Australia.

“Put another way, when Labour was in office, real after tax wages in Australia increased over six times faster than wages in New Zealand. No wonder the wage gap blew out under Labour’s watch.”

 The outcome of the Australian election will influence the gap – if Labor wins taxes are likely to increase more or decrease more slowly.

However, for the good of both countries we need the gap to continue to close because of progress in New Zealand not regression in Australia.

That means more policies which promote economic growth and continued reversal of the tax and spend policies which put us into recession long before the rest of the world.

3 Responses to A start to closing NZ-Aust wage gap

  1. Oh Ele, you are hilarious!

  2. Michael says:

    The increase in GST will increase the gap.
    When will the socialist fools in Government wake up to the fact that a nation can never tax it’s self to prosperity.

  3. homepaddock says:

    Robert – laughter is good for you 🙂

    Michael – I agree a nation can’t tax itself to prosperity.

    Good tax is an oxymoron but taxes on consupmtion are better than those on earnings.

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