The wage gap between Australia and New Zealand is set to get bigger during 2010, an international survey by accounting firm Grant Thornton has found.In a survey of 250 Australian and 180 New Zealand businesses, 78% of Australian businesses were looking to
The wage gap between Australia and New Zealand is set to get bigger during 2010, an international survey by accounting firm Grant Thornton has found.
In a survey of 250 Australian and 180 New Zealand businesses, 78% of Australian businesses were looking to increase wages either in line with inflation or higher compared with 55% of New Zealand companies.
Peter Sherwin, a partner of Grant Thornton New Zealand, said that these figures could indicate the beginning of another “brain drain” period, which will hamper New Zealand’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.
“Clearly this is yet more evidence identifying the growing urgency for the Government to create the right environment for businesses in New Zealand to perform and retain our talent. Reducing the top personal income tax rate would help,” he said.
With New Zealand’s unemployment rate spiking to 7.3% in the December quarter, the highest total in 10 years, compared with Australia’s rate of 5.3%, companies across the Tasman are having to lift wages to attract the best talent and New Zealand is an obvious target.
In Australia 23% of companies intend increasing wages more than inflation, 55% in line with inflation and 19% expect no increase.
In New Zealand, which is in line with the global average, 12% expect to increase wages more than inflation, 43% in line with inflation and 41% to hold wages at present levels. The global average is 11%, 40% and 33%.
“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% plus higher than in New Zealand.
“While it is great that our unskilled and semi-skilled unemployed are getting job opportunities such as in Auckland, it is the highly skilled that will take the country forward, and it is these people that have the greatest financial carrots dangled in front of them.
“The last thing New Zealand wants now is to have our recovery stalled by a shortage of talent,” he said.
Another indication of the robustness of the Australian economy compared with New Zealand is that in the last year 36% of companies increased staff, 27% decreased and 17% stayed the same.
In New Zealand 18% increased staff, 41% decreased and 41%stayed the same.
