Is the grass really greener for construction workers in Australia?

Thursday, 24 October 2024

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Kiwi construction workers looking to move to Australia for greater opportunities may not get the big financial boost they expect, a new report shows.

The prospect of higher wages across the Tasman has always been a lure. Now, weak economic growth and limited job vacancies in New Zealand have led to a record number of people heading to Australia.

But a new report from the Construction and Infrastructure Workforce Development Council showed the disparity in construction incomes was shrinking, and in some roles there was no longer a big difference.

In Victoria and New South Wales, 71% and 72% of electricians and telecoms workers earned over A$52,000, while in New Zealand over 71% did, for example.

Construction workers and heavy machinery operators still earned more in Australia than in New Zealand, but the higher earnings were likely to come at the cost of longer hours and weekend work, the report found.

OECD data showed the average income tax rate at 100% of the average wage was less in New Zealand than in Australia, and those higher taxes impacted on workers’ take-home amount, it said.

The council’s chief executive, Philip Aldridge, said the report, which included quantitative data analysis and interviews with returning workers, was not about saying one country was better.

“It is about giving workers and employers the full picture. Relocating is about more than pay; taxes, living costs, and work-life balance all matter. Both sides need to consider the trade-offs.”

Several of the workers interviewed said there was greater use of overtime and penalty rates in Australia which was appealing, but getting the benefits required a sacrifice of personal time.

Others, who had worked in both countries over long time periods, said the income disparity was significantly greater two decades ago, and that it had been consistently shrinking over time.

Younger people they worked with appeared to be basing their understanding of the income-related benefits of moving to Australia on received wisdom, which was no longer accurate, they said.

Many pointed out the larger scale of the construction and infrastructure sector in Australia meant more demand for employees, and said that did put upward pressure on wages.

More affordable housing costs are often cited as a reason for leaving New Zealand, but the report also showed those costs were not always cheaper in Australia.

It found that since 2022 New Zealand’s house price-to-income ratio has dropped, and made homeownership more accessible than it is in major Australian cities such as Sydney and Melbourne.

Renting in New Zealand was likely to be more expensive than in New South Wales and Victoria, although if people were able to rent outside of Auckland or Wellington that disparity was mitigated, it found.

Meanwhile, the worker interviews highlighted that life stage played a critical role in which country was more appealing.

Australia’s larger job market and opportunities for career progression, combined with overtime and penalty rates, was attractive to younger workers, especially those without children or mortgages.

But New Zealand was considered to have better work-life balance and became more attractive as workers started families and wanted greater stability.

Aldridge said many construction workers were currently moving to Australia for immediate opportunities, and New Zealand’s current lack of work could not be denied.

“But it’s temporary. Within 12 to 15 months, major projects will be kicking off, interest rates will drop, and demand for skilled workers will surge.

“Australia may look appealing now, but short-term gains should be weighed against New Zealand’s pipeline of work, forecast to be worth $240 billion over the next three years alone.”

Certified Builders chief executive Malcolm Fleming said the report could help address retention challenges as it would enable employers to have informed discussions with their staff about the reality of moving to Australia.

“Many workers are still making decisions based on outdated information, and this data gives employers the opportunity to present the facts clearly.

“It’s about showing workers that the grass isn’t always greener in Australia and helping them make decisions with the full picture in mind.”

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