Editorial: From Oz with love (well, pay cheques)

21:57, Jul 30 2013

Labour finance spokesman David Parker last year warned that low wages were turning New Zealand into "Australia's Mexico".

This poor-neighbour comparison didn't play well with the Mexican ambassador, but such comparisons are liable to increase after reports that more and more Australian companies are setting up business here because costs are cheaper - one-third cheaper, in the example given by CallActive, which has opened a call centre in Wellington.

Rather than calling it "offshoring", it's trying to call it "nearshoring" on the basis not only of proximity but also because the cultural gap is less than with, say, India and the Philippines. It turns out that, in spite of all that teasing, they can understand Kiwi accents and idioms perfectly well.

Labour and the unions have been decrying the trend, saying that the yawning gap between Kiwi and Aussie wages, along with our highly deregulated labour market, have created low-quality work which dumbs down the local workforce and slides us deeper into Third-World status.

Minister of Finance Bill English would beg to differ. Australian investment and jobs are good for New Zealand, he says. We need to encourage companies from countries like Australia to invest here, because we just can't afford to borrow and spend at the rate of the past decade.

(You might have thought we were, ourselves, one of those "countries like Australia", only, you know, better.)


In any case, we're seeing what New Zealand Council of Trade Unions secretary Peter Conway fairly enough calls a "weird" situation. Kiwi workers are drawn to Australia for jobs, but Australian employers are being attracted here by the combination of lower wages and a less-regulated industrial relations system.

Still, let's not turn our noses up at those jobs.

They provide work for people who don't have it and at New Zealand rates of pay which, to be sure, we might all wish were higher. But it's not a static situation. There's a dynamic at play here.

Our workforce increases and, over time, this will make jobs more competitive and employers will have to pay more.

There's a good example of this in China.

Please take that look off your face. Seriously, China.

International conglomerates flocked there to have goods made because of the cheap labour force, but in the past few years, many Chinese have become more affluent, or less impoverished.

Recognisable middle-class expectations have risen. So have wages, to the extent that some of those, let's face it, hard-nosed companies are now moving elsewhere in search of other, cheaper labour forces.

Meanwhile, it's true: China's growth is slowing. But now the government, which can finance economic growth itself for only a limited time, is hoping its consumers will start buying. Far more of them now are in a position to do so.

Back here, nobody should be presenting the Australasian version as a plain-and-simple case of jobs disappearing in Australia and popping up in New Zealand for our unadulterated and equivalent benefit.

For one thing, there's perhaps a tendency for the disappearing job to be full time or close to it, and the reappearing job to be not only lower paid but also more liable to be casual or part time.

But it's honest work and, right here and right now, we should welcome it.

The Southland Times