Cameron Stewart writes in The Australian on how, and why the trans-Tasman tide is flowing in New Zealand’s favour:
Jennifer Zhu, a former Australian public servant, was writing briefing notes for incoming prime minister Tony Abbott when she hatched her own Pacific solution.
She leans forward so her story can be heard above the rhythmic grunts of the dragon boat teams gliding across New Zealand’s Wellington harbour at dusk. “I was in Canberra working on the briefings for the change of government [in 2013] when I realised how much the public service was going to be cut [under Abbott],” she says. Her Australian boyfriend, fellow public servant Iain McKenzie, 28, chimes in: “We could see that promotions were unlikely.”
“So I looked up a website,” continues Zhu, 27, who now works for Immigration New Zealand, “and there were lots of government jobs here. We thought, ‘Why not?’ ” After a year in Wellington, they haven’t looked back. “We both have good [public service] jobs and it’s a much more relaxed culture,” says Iain. “We’re not leaving anytime soon.” . . .
Stewart gives other examples of Australians and ex-pat New Zealanders who have moved here to work in a variety of occupations including farming, viticulture, nursing and hospitality then looks at why the tide has turned.
What has happened is that somewhere, somehow, perhaps in the dead of night when no one was looking, Australia and New Zealand have swapped sides. Cocky, confident Australia is now home to dysfunctional politics, yawning budget deficits, rising unemployment and an electorate unwilling to accept tough reforms.
By contrast, New Zealand Prime Minister John Key is running the most successful and stable centre-right government in the world. Whereas Abbott might not survive his first term as leader, Key, 53, is into his third term and has never been more popular. Key presides over a country that is no longer a dead-end backwater but one that enjoys plentiful jobs, strong economic growth and is on the cusp of a budget surplus. All this despite its second-largest city, Christchurch, being devastated by the earthquake of February 22, 2011, which left 185 people dead, the city centre in ruins and a $40 billion clean-up.
Even the Kiwi dollar, for so long the poor cousin to our own currency, is at virtual parity these days. “I’ve been here for 15 years and I’ve never seen this before,” mutters the woman at the Melbourne airport currency exchange as she hands me fewer $NZ than I gave her in $A. “They must be doing something right over there.”
GDP growth in New Zealand last year was 3.3 per cent compared with 2.8 per cent in Australia, while unemployment was 5.7 per cent in the December quarter compared with 6.1 per cent (now 6.3 per cent) here. Forget rugby; New Zealand is winning a bigger game. When Abbott visited New Zealand in February, he had to concede Key has led “a very successful, a really, really successful centre-right government. There are lessons for Australia in what you have done.” By contrast, the New Zealand press pack suppressed giggles when Key told an Australian journalist: “I think it’s a bit harsh to describe it [Australia] as one of the more unstable democracies in the Pacific.”
As a result of this trans-Tasman shift in fortunes, we are seeing something we have not seen for a generation. The tide of Kiwis coming to our shores has ebbed while the number of those going back home has flowed. This year the trans-Tasman migration is likely to be in New Zealand’s favour — something that has not been seen since Australia had “the recession it had to have” in the early 1990s. . .
[Prime Minister John]Key says Australia’s mining sector and growth in the big cities has slowed, making the country less attractive. “It is harder; I don’t think the opportunities are there in the same way, while on the other side of the equation there are lots of opportunities here in New Zealand and while they may make less money the cost of living is generally a lot lower.” . . .
A friend who works in Australia says he earns more and a lot of things cost less there than they do here. But when he takes into account the higher tax rate and other compulsory costs he pays the difference isn’t nearly as big as it appears.
It is often said that Key runs New Zealand like a CEO rather than a politician and that there are clear parallels in style with another self‑ made millionaire-turned-politician, Malcolm Turnbull. “I know [Malcolm] well and I like him,” is all that Key will say of Turnbull, wary of wading into leadership speculation.
Key is a delegator rather than a dictator and makes a habit of consulting in person with several of his ministerial colleagues each morning. He holds informal meetings ahead of formal Cabinet sessions so that people can float ideas or shoot them down without undue embarrassment. “Most people realise we are not doing extreme things,” he says. “We try to explain what we are about.” He says he is “unashamedly pro-economic growth” but prefers the path of pragmatism over ideology. “My instincts are very much in the middle so I am not fighting internal demons,” he says. “I am not a secret right-winger who wants to do things.”
He does not accuse Abbott of being a secret right-winger but the truth is that compared with Abbott, Key is much more of a pragmatic centrist economically and is more liberal socially, having voted for gay marriage in 2012.
It says much about Key’s political skills that he managed to usher in an increase in the GST in 2010, a debate that both sides of Australian politics are unwilling to have. Ironically, Key did this despite Howard, the architect of Australia’s GST, advising Key over a lunch in Auckland in 2010 that a rise was too risky. “I said to [Howard] ‘I am going to raise the GST and drop personal tax rates’ and he said, ‘Don’t do it’. He said, ‘You’ll have the obvious argument that the price of bread goes up and it will be felt more keenly by the poorer person and so you will lose that debate’.”
But in the end Key chose to pursue the reform and succeeded, with surprisingly little political bloodshed, in lifting the GST by 2.5 percentage points to 15 per cent while cutting personal and company tax. As a result, New Zealand’s top personal tax rate is now only 33 per cent compared with 45 in Australia, while the company tax rate is 28 per cent compared with 30 per cent here. Key has also been part-privatising state assets in power, coal and aviation, a path that causes political grief in Australia. Key’s reform record has been helped by having a first-rate finance minister, Bill English.
In welfare reform, Australia is looking to emulate the New Zealand system, which is saving billions in long-term payments. In 2011, Key adopted a new model of welfare that identifies groups at risk of long-term welfare and establishes special targeted programs for them. “We’ve done a lot in what is called the ‘investment approach’ to welfare reform and we have been genuinely investing money up front in people who would otherwise be long-term beneficiaries,” says Key. When social services minister Scott Morrison addressed Canberra’s National Press Club in February he spent most of his speech lauding the New Zealand model and promising to look at what Australia could adopt from it.
Part of Key’s popularity stems from what political analyst Colin James calls his macro- personality. “Key has a remarkable rapport with people across the political spectrum and that is unusual. Bob Hawke probably had that but certainly Rudd, Gillard and Abbott didn’t.” . .
Because Australians and New Zealanders are allowed to work in each other’s countries without restrictions, migration statistics are not definitive but they do suggest that far more Australians are now moving to New Zealand to live. While there will always be a flurry of movement because of family ties between the estimated 600,000 Kiwis in Australia and 60,000 Australians in New Zealand, the total number of people from Australia moving to New Zealand (including New Zealanders returning home) has soared in the past two years to February from 15,355 to 23,571.
Spoonley says the number of non-Kiwi citizens arriving from Australia to live in New Zealand has jumped by 50 per cent in the past two years, from 5234 in the 12 months to January 2013 to 7895 this year.
Job opportunities and quality of life have driven this trend. According to data comparison website Numbeo, apartment rents are on average 24 per cent lower in New Zealand than in Australia and apartment costs per square metre 36 per cent lower. The national median house price has stayed flat at $350,000, according to the Real Estate Institute NZ, and even in Auckland, where the market is hottest, the median price of a house — $675,000 — still compares favourably with Australian cities.
New Zealand also enjoys a reputation for better work-life balance, although OECD figures suggest New Zealanders only have marginally more leisure time than Australians. The downside is that salaries in New Zealand are also around 30 per cent lower on average, although this gap is said to be closing.
Even so, New Zealand is trying to make the most of its moment in the sun, having recently held job expos in Perth and Sydney and another in Melbourne later this month to spread the message that “New Zealand is one of the best performing economies in the world right now and the demand for skilled workers is high”. . .
The current contrasting fortunes of both countries could easily be reversed in years ahead, and the traditional flow of Kiwis to Australia could resume. Like Australia, New Zealand is heavily dependent on the health of the Chinese economy and its dairy industry, the country’s biggest export earner, suffered sharply lower prices last year.
In addition, the rebuilding of Christchurch is adding around 1.25 per cent to GDP growth each year but this will tail off as the city nears completion. Even so, a report last month by Moody’s Investor Services predicts continued strong economic growth for at least the next two years and for New Zealand’s budget to return to surplus — a word that Australians can only dream about.
Key concedes that New Zealand has better growth and employment than Australia right now but declines to brag. “We want a strong Australia,” he maintains. “A strong Australia is good for New Zealand. No relationship is more important to New Zealand … there is naturally a bit of rivalry but Aussies are looked at fondly here. Most people, I think, look at Aussies and go, ‘It really is the lucky country even if it has one too many creepy-crawlies and sharks’.”
Key lists several high-profile Australians who have come to New Zealand to live, but his final one packs a punch. “The Australian High Commissioner [Michael Potts], who is just about to finish his time here, is not going back to Australia,” the PM reveals. “He is about to live down the road here in Wellington,” he says, pointing out the window. “His wife is a Kiwi so they have made the call they are going to live in New Zealand.”
Key cannot hide his grin. Now even the diplomats are defecting. It’s taken a generation, but the Bondi Bludgers are finally enjoying their revenge.