Blame the PM, not the Australians

Prime Minister Helen Clark describes the new trans-Tasman social security arrangements as a "win-win" deal. Some victory.

Prime Minister Helen Clark describes the new trans-Tasman social security arrangements as a “win-win” deal. Some victory.

The changes won’t affect New Zealanders already in Australia, nor the right for us to live and work there, but concern future emigrants.

Kiwis lost their 50-odd year-old automatic right to permanent residency in Australia. Kiwis lost their right to Australian social security, sickness and many other welfare payments. Kiwis lost their right to vote in Australian elections. There is no change to entitlements for Australians coming here (see

Our government hopes this will end the myth of the Kiwi “dole bludger” - even though Clark says none of the New Zealand payments to the Australian government were directed at unemployment benefits.

At present, our government pays the Australians $170 million a year, while its government spends $1.1 billion on supporting New Zealanders in Australia. However, Australian Immigration Department statistics themselves suggest Kiwis are more active in the Australian labour market than those born there. Both unemployment rates are similar- at around 6%. And the 430,000 Kiwis living over there contribute $A2.5 billion in tax every year.

The Australians say the new deal will save them $A1 billion over 10 years, and Clark claims New Zealand will save $A100 million over three years in contributions for Australian-based New Zealanders. However, with no dole payments, Kiwis coming home will remove this.

Future Kiwi emigrants will find themselves contributing to the Aussie coffers through tax but having few rights to get anything back. They will face taxation without representation and even after 20 years working there, will remain second-class citizens - unless they become permanent residents.

The Australians must be laughing all the way to the bank. But don't blame them, blame Clark.

For many IT workers, fortunately, this is largely symbolic. IT Association executive director Jim O’Neill says our IT workers do not head over the Tasman thinking they will end up on the dole. They go for the money and the lifestyle. He doubts the changes will make any difference to this. But the IT industry is unstable, with much restructuring and many organisation closures. How long before the next major recession?

Those preferring a welfare safety net after the two-year stand down period may want to consider permanent residency. The Australian government is keen to attract those with the right skills and in January announced initiatives to get them. IT workers can gain permanent residency under various special skills categories and immigration officials must give information and communications technology (ICT) professionals immediate priority processing, even for temporary entry (see

What underlies the Aussie move is New Zealand's immigration policies and our underperforming economy. Australia is increasingly alarmed at people using New Zealand as a back door into it.

Australian immigration rules are far tougher than ours. As a university graduate with a job offer, I gained Kiwi residency. But checking the Australian immigration website, it appears I would make the "pool" but could wait two years before finally being rejected.

Kiwi immigration is significantly racial/historic, not economic: unrestricted access for Brits and Irish before 1974; today, an annual quota giving 1100 Samoans entry regardless of skills/qualifications, while Pacific Island unemployment is three-times the Pakeha rate.

New Zealand should abolish special quotas and emphasise the necessity of near-perfect English, along with the IT, business and other skills we need. Recent initiatives like immigration fairs matching the skills of Indian and other IT workers with job offers are the right way. Too many immigrants win residency but despite their qualifications fail to find work.

Deregulation brought strong economic growth in the mid-90s, but our relative decline continues. The 4% economic growth predicted for 2000 just before the last election fizzled to just 1.4% as business (over-)reacted to the Labour coalition government’s economic policies.

Higher taxes, renationalisation (of ACC) and greater union power (through the ERA) simply do not work. Ask the Irish, who are often cited as a model. Twenty years ago, Ireland was an economic basket case, begging for European Union subsidies. But now finance minister Charlie McCreevy tells the EU to copy its success by having lower taxes.

Even Britain’s left-wing Guardian newspaper notes that while EU subsidies may have primed the Irish economic miracle, “the real impetus for growth has been driven internally.

“Central to that growth has been a determination by successive Irish governments to cut taxes, both personal and corporate, and make Ireland the most attractive region in Europe for companies to move in to ... Low taxes and a young, well-educated and English-speaking workforce have enticed the high-technology titans such as Intel, Apple and Microsoft,” it says.

Corporate taxes of 10% in Ireland and 15% in Singapore is bringing these countries jobs and prosperity. But our company tax rate of 33% is higher than that in Australia. What better way to reverse our brain drain and turn back the tide of company relocations to Sydney than having a 15% tax rate - half that of Australia?

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