They don’t know how lucky they are

There’s something deeply Australian about being born in New Zealand. It’s as Australian as the Anzacs, pavlova, Crowded House, John Clarke, Russell Crowe, etc. The number of New Zealand citizens living in Australia equals more than a tenth of the home country’s population. Every now and then we get guilt-tripped and/or budget-incentivised to go back.

New Zealand culture suffers from an especially virulent strain of ‘banal nationalism’. The ‘overseas experience’ is as Kiwi as pavlova, the Anzacs, Crowded House and Fred Dagg (I’ll leave Russell out of this one). Permanent emigration, on the other hand, is terribly un-Kiwi. It used to be, though, that leaving New Zealand – especially for Australia – said more about the emigrant than the country, kind of like if a visiting international celebrity was asked, “What do you think of New Zealand?” and they responded by criticising the weather. Robert Muldoon said he wasn’t too worried about the drift across the Tasman because it raised the average IQ of both countries.

Nowadays, though,  the emigration rate is treated in the media and in politics as an affront to the nation, and not the kind of affront to which you respond caustically, but the kind that you know, deep down, you deserve. The emigration rate is now Something Which Must Make New Zealanders as a Whole Search Their Souls and Find a Way to Restructure the Tax System to Favour Entrepreneurs, Marketing Professionals, and Lawyers. “It’s not you, emigrants, we realise that, it’s us.”

Former Labour prime minister Mike Moore (he lasted a record-breaking eight weeks) has a piece in the Australian Financial Review today revisiting this time-worn trope. His financial adviser suggested he live abroad for six months of the year so as to avoid liability for New Zealand tax. This unpatriotic suggestion provoked a round of the aforementioned soul-searching.

The main reason so many New Zealanders move to Australia is obvious. Moore would like to put it down to tax rates, but in fact it’s income. Wages are higher at every income level, significantly higher. Partly that reflects the vestiges of the arbitration system and more powerful unions, but it also depends on the fact that per-capita GDP is a third higher.

Aha! The Moores will say. That proves the point. Microeconomic reform! Tax reform! Decisive political leadership! Catch up with Australia!

But that is a far too optimistic view of the difference policy can make economically. New Zealand has already out-micro-reformed Australia. The Employment Contracts Act was a fifteen-year head start over WorkChoices. Inflation has been fought more tenaciously than anywhere in the world. Fat lot of good it has done. The sad reality is that Australia has things New Zealand will never have – massive mineral resources, critical mass as a global financial centre, and even some residual manufacturing industries. Tax reform ain’t going to do anything about that. It’s called uneven geographical development and it comes with capitalism.

At any rate, though, I think most Kiwis still take the Muldoon line about average IQs. Everyone knows that regardless of the comparative economics, a lot of New Zealanders will always leave to see the world simply because New Zealand is so small. No offence intended, and none taken. Many of them will drift back eventually, anyway. When a few years ago “patriotic 27-year-old marketer Richard Poole” launched an ad campaign with signatures from 700 young urban professional expatriates, informing the home country that they wouldn’t be likely to return without some serious tax breaks to encourage entrepreneurialism, the healthy reaction was a resounding: “You absolute cocks. We didn’t realise you had left.”

Published in: on 24 May, 2007 at 11:40 am  Leave a Comment