Wednesday, February 22, 2006

Counterproductive solutions

According to the Dominion-Post, there has been a big rise in Kiwis leaving for Australia. But the right's analysis of the problem and proposed solution leaves a lot to be desired:

National's finance spokesman, John Key, said the number of New Zealanders voting with their feet and moving to Australia was alarming.

"The Government continues to be in a state of denial about the increasing competitiveness of the Australian economy," he said.

"Quite clearly the massive tax reductions that (Australian Treasurer) Peter Costello has been signalling in Australia are continuing to attract more and more skilled Kiwis."

His view was echoed by Business New Zealand chief executive Phil O'Reilly, who said the latest figures showed how important it was for New Zealand to become more competitive to attract skilled new migrants.

And how would they make us "more competitive"? Cuts to wages and employment conditions, of course! Yeah, that will encourage people to stick around...

If we want to catch up to Australia, then we need to abandon the right's view of a low-wage, low skill economy in favour of a high wage, high skill model. This won't be achieved by National's preferred policies of wage cuts and kicking people off the sickness benefit and DPB; that will simply encourage employers to continue the bad old habit of hiring another warm body rather than investing in training or plant to improve productivity. But then, the right's policies in these areas have never been about catching up to Australia or improving the economic performance of the country; they're simply about putting the interests of employers and business owners first, and enabling them to capture a larger slice of the economic pie - just as they did in the 90's.


Speaking as a highly skilled Kiwi who fled to Australia, its not the tax conditions in NZ or Oz that made me move. It's the fact that over here they still _vaguely_ fund science, so my doctorate is slightly useful and there are _some_ jobs. There's just no job prospects in NZ for more than a handful of scientists in any given profession - If I want to get a job in a NZ university, I generally have to wait for someone else to retire, and accept pay and conditions about 2/3 or less than I can get over here. New Zealand simply isn't big enough to spend enough or invest enough in a high skill economy to keep people like me. All NZ needs is enough to run the teaching cadres in the universities, and a handful for those businesses/govt departments that need the odd scientist. Even if we were expanding research and high skill fields, we still educate far more graduates than we need.

Add to that the NIMBY factor, and it's just not worth my bother to work as a geologist in NZ.

Posted by Weekend_Viking : 2/23/2006 12:35:00 AM

Labour has done nothing to make this country a high wage, high skilled economy.

That's why NZders are voting with there feet to go to Australia.

If Jordan Carter is to be believed 'Part of that is productivity which needs cooperation across the workforce and business, but productivity isn't a panacea'.

WTF - if you look at wage growth and productivity they tend to follow each other.

If you have a highly productivity workforce you will have higher wages/salaries.

This hasn't occurred in NZ over the last 6 years and Labour seems to be only interested in taxing the life out everyone.

The higher you tax someone the less incentive there is to work hard.

Posted by Anonymous : 2/23/2006 01:26:00 PM

I'm sick of this crap that the right in NZ uses about NZ being a high tax country. Taxes in Australia are much higher! If high taxes drove people away Australians would be moving to New Zealand in droves. The highest tax rate in Australia is 47c (for income over $70,000), 42c (for income over $58,000.)

Some of the main reasons incomes are higher in Australia include, the fact the minimum wage is much higher (around $13 an hour) and conditions are much better e.g. 9% compulsory supperannuation (primarliy paid for by employers!)

Posted by Anonymous : 2/23/2006 02:01:00 PM