Trans-Tasman wage gap grows by $6600 since 2017 – ACT

ACT leader David Seymour has grilled Prime Minister Jacinda Ardern in question time, claiming that the wage gap between New Zealand and Australia has grown under her watch.

In Parliament yesterday, Seymour produced figures claiming that the average wage gap between a New Zealander’s annual pay packet and an Australian’s had grown by $6600 since 2017.

On ACT’s figures, adjusted for an exchange rate of $A1 to $1.08, the gap between the median wages of the two countries sits at 29 per cent, up from just over 26 per cent in 2017. In 2017, median hourly earnings in New Zealand were $24, while an Australian earned $A30 ($32.4). In 2021 a New Zealander earned $27.33 each hour while Australians earned $A36 (NZ$38.91), the figures showed.

While the relative difference between the two wages has increased on ACT’s figures, rising standards of living in both countries have meant that the dollar value of the difference, per hour, has shot up.

Overall, an Australian working 40 hours a week, for 52 weeks, on the median wage would make $A74,880 ($80,932.8), whereas a New Zealander on the median wage would earn $56,846, an overall annual wage gap of $24,086 adjusted for exchange rate.

‘‘New Zealand is being thrashed in the trans-Tasman battle for ideas, talent and capital,’’ Seymour said. ‘‘Australian workers have grown $6600 a year better off than their Kiwi counterparts since 2017.’’

On the ACT Party figures, which are taken from the New Zealand household labour force survey and the Australian Bureau of Statistics and uses an average exchange rate of A$1:NZ$1.08, the earnings gap per hour has grown from $8.40 to $11.58.

Ardern responded to Seymour by pushing on the Government’s adoption of fair pay agreements, which the Government says will raise wages. ‘‘And again, an issue that successive governments have seen Mr Speaker, and one in which we’ve been very clear, that part of driving productivity includes driving innovation within industry,’’ Ardern said.

‘‘Higher wages prompting that investment in innovation is one of the reasons that we have promoted the fair pay agreement as a way of, instead of just driving toward low wages and poor terms and conditions for workers, encourages investment that enables greater productivity – and I note again for the member that fair pay agreements is something that Australia have indeed adopted and implemented.’’

Both ACT and National oppose fair pay agreements.

The trans-Tasman wage gap has been a perennial topic of debate in New Zealand for decades – as the comparative economic fortunes and inflation in the two countries wax and wane.

From 2008-2012, the exchange rate difference was far higher than it was today, further fuelling the gap. Today the exchange rate is hovering round 90 cents or above, meaning that $1 is worth 90 Australian cents. But back in the period between 2008 and 2012, a New Zealand dollar frequently only bought between 75 and 80 Australian cents.

Not only were the wages higher in Australia, those wages bought significantly more New Zealand dollars than they do today.