Australia v New Zealand: Income

I will start with a post about the relative wealth in Australia and New Zealand. Having just this year moved from New Zealand to Australia I feel I may be a touch of an expert.

I am picking that this will become a major election issue in New Zealand this year. It already seems to be, with both sides arguing that the facts support them (see Kiwiblog and this press release from Mallard). I shall set out the difference in wealth I have experienced with my move from Wellington (NZ) to Melbourne (Australia).

I am a young professional and was / are working at top tier firms both in NZ and Australia.

Last year in New Zealand I was on NZ$50,000, this year I would have been on NZ$65,000 (the wages are all exactly the same for all big firms in NZ and everyone gets the same pay rise for the first few years). My after tax income last year was NZ$38,630 and this year would have been NZ$48,380. After deducting student loan repayments (massive student loan by the way), I had in my pocket NZ$35,408.40 (NZ$43,698.40 this year).

This year I am on AU$80,000. My after tax income will be AU$58,900 (after tax and the extra medicare levy, excluding the various other tax rebates). If I deduct the overseas borrower repayments on my student loan (NZ$3000 this year, although I do not need to start repaying it for 2 more years... I am either way too honest or an idiot), my after tax / student loan income is AU$56,338 (based on today's exchange rate).

Therefore by moving to Australia, and ignoring currency differences, I boosted my after tax income by $20,929.60 over last year and $12,639.60 over what it would have been this year in New Zealand.

I am this year earning 129% in Australia of what I would have been earning in New Zealand.

And this is not the end of the story, I have found in Australia I earn more money, pay less tax and everything is cheaper. I shall post on costs in the next day or so.

6/4/08: I have corrected an error I made in this post. I had not deducted the base 1.5% medicare levy that applies to everybody - therefore my Australian income is $1200 lower, but still much better then in NZ.