Wage gap with Australia set to widen

A new survey indicates the wage gap between this country and Australia appears set to widen, with accounting firm Grant Thornton warning the figures could indicate the start of another brain drain from New Zealand.

Its survey of 250 Australian and 180 New Zealand businesses found 78 percent of Australian businesses were looking to increase wages either in line with inflation or higher, compared with 55 percent of companies in this country.

Peter Sherwin, a partner of Grant Thornton New Zealand, said the figures could indicate the beginning of another brain drain period, which would hamper this country’s recovery from recession.

“We are already in danger of losing many of our top talent to Australia, and this will only increase as the wage gap between the two countries gets wider,” Mr Sherwin said.

Reducing the top personal income tax rate would help create the right environment for businesses in New Zealand to perform and to retain talent. Jobs in Australia.

With Australia’s unemployment rate of 5.3 percent, compared to this country’s decade-high 7.3 percent, companies across the Tasman were having to lift wages to attract the best talent and New Zealand was an obvious target, Mr Sherwin said.

In Australia 23 percent of companies intend increasing wages more than inflation, 55 percent in line with inflation and 19 percent expect no increase.

In this country 12 percent expect to increase wages more than inflation, 43 percent in line with inflation and 41 percent to hold wages at present levels. The global average is 11 percent, 40 percent and 33 percent.

“Just in the last few weeks we have seen two sharply contrasting pictures. On one hand we have over 2000 people trying to get jobs at an Auckland supermarket, while on the other there is a growing shortage of medical graduates as they head to Australia and beyond where remuneration packages are 30 percent-plus higher than in New Zealand,” Mr Sherwin said.

“The last thing New Zealand wants now is to have our recovery stalled by a shortage of talent.”

Another indication of the robustness of the Australian economy compared with New Zealand, was that in the past year 36 percent of companies across the Tasman increased staff, 27 percent decreased and 17 percent stayed the same. In New Zealand 18 percent increased staff, 41 percent decreased and 41 percent stayed the same.

Article: http://www.stuff.co.nz/business/3387850/Wage-gap-with-Australia-set-to-widen