We might be tempted to bask in the glow of recent media reports of a "Brain Gain" or brain-drain reversal (Signs NZ could be set for brain-drain reversal, ODT 11.8.21). While it is good news more Kiwis are coming home, bringing their expertise with them, and fewer Kiwis are departing, taking their energy and drive overseas, I wonder how this is going to impact on young New Zealanders fresh out of school and university.
For them, it means more competition in an already tough job marketplace. That’s on top of the financial hardship they suffer just by living in New Zealand. Comparing the lifestyles of two of my daughters — one here and one in Australia — points up stark differences. For a start, there is no tax-free threshold in New Zealand’s progressive tax system, you pay tax on every dollar you earn. Not so in Australia where you can earn up to $A18,200 ($NZ19,000) before being liable for individual income tax. New Zealand graduates are also disadvantaged with repaying student loans. In Australia, a graduate can earn up to $A47,000 before being required to start paying off their student debt. In New Zealand, the IRD starts docking payments once graduates earn more than NZ$390 per week or NZ$20,280 per year. That’s against a backdrop of New Zealand wages being almost 20% lower on average than in Australia. Cost of living on several indicators is often higher here compared with Australia, for example petrol is 42% more expensive, milk costs 55% more, mid-range cars are 15%-19% more expensive. According to Numbeo, a website that does cost of living comparisons between countries, while consumer prices including rent in New Zealand are 3.72% lower than in Australia, local purchasing power in New Zealand is 16.02% lower than in Australia. That all adds up to a hefty penalty for living in Aotearoa. Once Australia gets on top of its Covid-19 outbreaks and achieves the 80% vaccination target for the population, our advantage as a safe haven might start to lose its lustre. We are (quite rightly) benefiting from our appeal as a Covid-safe country but we need to take a close look at the inequities in our society before patting ourselves too heartily on the back and ask how we can make the playing field more even for young New Zealanders. Those returning Kiwis might be in for a shock, too, when they compare the quality of life in the societies they’ve left behind with the home country they have returned to; they may find their view from overseas was through rose-tinted spectacles. We want to hang on to both our young and our returning Kiwis and as Holly Walker from the Helen Clark Foundation says in your article, it’s time we valued the worth of what people have to offer, invested in our ageing infrastructure, upgraded our public transport systems and, I would add, lighten the burden of debt and taxation on our young people’s shoulders and give them hope and the means to save for a home of their own.
We should ensure they have a reason to stay and enrich this country — we’re going to need them.
- Andrew Waterworth is former head of production with Natural History New Zealand. Now retired and living in Wanaka, he and his family moved from Australia to Dunedin more than 20 years ago.
