Tasman wage gap $40 a week wider

03:16, Jul 29 2010

The wage gap between New Zealand and Australian workers has widened by $40 to $580 a week since National came to power in late 2008 promising to address the income gap.

Economic Development Minister Gerry Brownlee yesterday claimed the gap in average wages was now less than it was when Labour left office in November 2008, after being questioned about it by Labour's David Parker.

However, a comparison of average weekly earnings in November 2008 and February this year shows New Zealand wages grew by 5.2 per cent over that period while Australia's grew by 6.7 per cent.

Australia's ordinary average wage rose from A$1165 to A$1243 while New Zealand's went from NZ$891 to NZ$947. On yesterday's currency rates, the gap widened from $540 a week in December 2008 to $580 in March this year.

The increase is unsurprising. Australia managed to stay out of recession during the global economic crisis while New Zealand was in recession for much of that period, with pay freezes common.

Yesterday, Mr Brownlee told Mr Parker it would take time to work out exactly how much the gap would close by after the October 1 tax cuts, but "it is certainly a lot less" than under Labour.

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Mr Parker was amazed that, despite Mr Brownlee's claim and National's constant campaigning on the difference in wages, the Government did not appear to know what the gap actually was. He said per capita gdp growth had also been higher in Australia and unemployment had gone up in New Zealand but down there.

"No doubt they will argue the next tax cuts will mean a big jump in incomes. Well, first that's in the future. Second, it ignores the GST increase and ignores the tax cuts they've also just had in Australia."

Prime Minister John Key said after the Budget that, under National's tax cut package, Australians earning more than $55,000 would pay more income tax than Kiwis on the same salary.

Earlier, Peter Sherwin, of accounting firm Grant Thornton, warned that the wage gap would rise further in 2010 after a survey showed 80 per cent of Australian companies would lift wages by at least the inflation rate compared to just over half of Kiwi firms.

The Dominion Post