N.Z., Aust. costs compared

Press, 29 February 1984, Page 1

N.Z., Aust. costs compared

Wellington reporter The cost of living in New Zealand and Australia is virtually the same, but Australian salaries are on average 15 per cent higher. These are the main conclusions of a study by P.A. Management Consultants and the economics department of the University of Auckland. The study examined incomes and living costs in Australia and New Zealand. It found that when the last study had been done in 1969, by the A.N.Z. Banking Group and Business and Economic Research, Ltd (8.E.R.L.), living costs in New Zealand had been 25 per cent cheaper than in Australia. Since then, the cost of living had become marginally more expensive in New Zealand until the wage and

price freeze had brought them to virtual parity. The results of computer analysis showed that in mid--1983, prices for a broad range of goods and services taken from the official consumers price index were 1.3 per cent lower in Auckland than Sydney. Translated into national comparisons, this meant there was “effective parity,” the study showed. Housing was 18 per cent cheaper in, Auckland and clothing was 16 per cent dearer. Australian transport fuels were 10 per cent cheaper. Generally, prices for household goods, food, and consumer items were cheaper in Australia, while services such as health and education were cheaper in New Zealand. The wage and price

freeze in New Zealand had much to do with the 1.3 per cent advantage to New Zealand, the report said. According to the latest C.P.I. information for the June quarter, 1983, prices rose almost 2.1 per cent in Australia and 1 per cent New Zealand. When gross or money incomes were adjusted for taxation, social welfare benefits and various tax concessions, the Australian was better off in terms of disposable income than the New Zealander. New Zealand single people are better off for disposable income than their Australian counterparts, especially in the lowincome groups. But the married Australian with a family is progressively better off for disposable income than the

New Zealand counterpart. An Australian man with i one child is 2 per cent better off for disposable i income, and the Australian | married man with four chil- i dren is 5 per cent better off. “Because the cost of living is the same in each country, and Australian salaries are on average 15 per cent higher, New Zealanders are very attractive to Australian job recruiters,” said Mr K. O’Malley, of P.A. Management Consultants. “They can be offered an inducement to go to Australia above what they get in New Zealand, and can expect their dollar to buy the same there, yet may be cheaper than offering the same job to an Australian. “Conversely,” he said, “it is that much harder to attract an Australian to a

job in New Zealand. A margin of 15 per cent above the New Zealand salary would need to be offered for that person to retain parity with their Australian peers.” But factors that could influence that equation were whether the migrant had a job at all (it seemed better to be unemployed in New Zealand than Australia); whether life-style was important; and whether job opportunities were available. There was very little in the tax rates between the two countries, the report said, since the change in New Zealand’s taxation rates last year. But New Zealand tended to give tax exemptions while Australia gave tax rebates, and that tended to give the Australian even more disposable income than the New Zealander.