Wage gap widens, despite Key's calculations

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Wed, 28 Jul 2010 6:08p.m.

Prime Minister John Key today defended claims that New Zealand's wage gap with Australia has widened

Prime Minister John Key today defended claims that New Zealand's wage gap with Australia has widened

By Duncan Garner

Prime Minister John Key came to power saying he would like to close the wage gap with Australia – figures released today suggest the gap has widened.

But no matter what figures were thrown around Parliament today, Mr Key is struggling to prove he is achieving his goal.

The Opposition was quick to jump on statistics released today that suggested the gap is widening.

“Why doesn't the Prime Minister come clean and actually admit he's actually made it worse?” Labour leader Phil Goff said.

The gap has in fact widened, no matter what figures you use, in comparison to when National took office in 2008.

Based on average ordinary wages before tax, the gap has increased by $40 a week to $580 (NZD).

The average weekly Australian wage in February was $1243, New Zealand’s was $947.

Labour has done its own calculations and thinks the gap has increased by more than $50 a week.

“The gap between the average weekly earnings has grown by more than $50 a week in Australia’s favour,” says Mr Goff.

Mr Key responded with his own figures.

“The gap is currently $160 a week and currently less than it was in 2005 when it was $187.60,” he says.

Mr Key focuses on 2005 when the gap was $187.60 - It's now $160.25. But Mr Key failed to mention 2008, when he took office, and the gap was $137.89.

So in fact, the gap even using his own numbers has widened by $22.36 - but Mr Key wants to focus on 2005, not when he took power.

“It has got smaller than the gap and the maximum point when Labour was in office,” says Mr Key.

The Prime Minister was in the gun because yesterday Minister Gerry Brownlee said the gap had got smaller - he couldn't back it up.

“It is certainly a lot less than when Labour was in office - exactly what it is is not something I’m familiar with,” Mr Brownlee said.

Labour also highlighted comments made by former National leader Don Brash on TV3's The Nation.

He heads the group tasked with closing the gap with Australia, but he now thinks National can't do it.

But if there is a plan, none of the statistics released today back it up.

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Comments

29 Jul 2010 01:59p.m.

Ricardo wrote:

I think it is unwise to compare simply the dollar figures. Tax, hidden taxes (compulsory health insurances etc), and costs of living need to be taken into account. The easiset comparison is usually private home ownership. I think those figures would give a more realistic comparison.

29 Jul 2010 01:35p.m.

Brent wrote:

I just googled, Grocery prices and supermarket comparison, The story on fastest growing food cost came up as well, Transport and water shortage was the leading factor, But have a look at fruit and veg, The 35% I came up with was base the docket my wife gave me of $132.84 Same list out of Aus was $39 Aus$ more.

29 Jul 2010 07:35a.m.

Andrew Stevenson wrote:

Brent: That is really interesting? Are you able to post some sources for that? I wonder if water shortages in the future in Oz will affect food prices as well. I think most of our wheat comes from there.

Dennis: I think you're probably correct. Although 3News reported last night that the gap was $180 in 2005 and $130 in 2008. That's interesting.

29 Jul 2010 06:47a.m.

Ruz wrote:

There is absolutely no prospect of NZ reaching pay parrity with Australlia. We need to relish in the fact that our wages are the highest for the developing world and get on with life.

29 Jul 2010 05:28a.m.

Brent wrote:

See food prices here have dropped by 2%. Aus has the fastest rising food costs in all developing nations, Blade steak here $14 - $18 per kg There $26 - $31 per kg. Aus has online sites to get the cheapest deals, makes interesting reading, looks like food cost on average around 35% more than us.

28 Jul 2010 10:03p.m.

Dennis wrote:

Without mining and oil exploration, we can forget about closing the gap whether it is National or Labour in power. That is the difference between Australia and NZ.

28 Jul 2010 10:01p.m.

Doug wrote:

Key was quoted in a small local newspaper a year before the election as saying they would like wages to fall. This wish to close the wage gap is pure electioneering by the same party that bought in the draconian employment contracts act and is now attacking workers in NZ. The trouble is they need workers votes so some sort of pretence is necessary. A cycle way is just how stupid he thinks Kiwi workers are. A cycleway will increase NZ wages.(Not!)

28 Jul 2010 09:00p.m.

irascible wrote:

Of course Key, Hide & co can't bring NZ wages up to those offered in Australia. There is no competition between an economy based on being the world's quarry, which is Australia, and an economy based on a music hall routine which is NZ under John Key and his mates.