Watch on our video page here. Watch on YouTube here. Bernard Hickey delivers an economic weather report in association with BNZ. This time he looks at why New Zealand has the highest proportion of graduates living overseas in the OECD. Over 24.2% are living overseas, which is just above Ireland. That compares with 3% of Australian-born graduates. Over 168,000 New Zealand born graduates live overseas, yet only 118,000 Australian born graduates live overseas when it has four times the population. This is all very topical as the Tax Working Group recommends tax reform to improve real wages and lower tax rates. New Zealand needs a higher economic growth rate to lift real wages and be able to keep NZ graduates here or tempt them back. We need more than lifestyle. Many have chosen to live in Australia, where salaries are on average 30% higher and where average tax rates are lower than in New Zealand up to a threshold of NZ$240,000.
A personal story It's worth telling a personal story here. I graduated as a journalist into the recession in 1991 in Wellington and didn't find work for 6 months. When I finally got a job as a financial journalist for Reuters on a starting salary of less than NZ$30,000 it didn't take me long to work out I couldn't raise a family in New Zealand. So I took an opportunity offered by Reuters to work in Australia. I then worked with Reuters and the Financial Times Group in Canberra, Sydney, London and Singapore over the following 10 years.
In 2004 I faced a moment of truth, one which many New Zealanders living overseas face when their children start growing up. Where do you want your children to grow up and can you afford it to be in New Zealand? Do you want your parents to watch their grandchildren grow up in the same country? I eventually decided to take a 65% pay cut and return home to New Zealand. It was a good decision eventually because now I'm enjoying working as a financial editor and building a business while living in Auckland. But from a financial and corporate career development point of view it was a dumb thing to do. Would I make the same decision again? To be honest, I'm not sure. I'm glad I'm here now and will be for the duration, but I do worry about our graduates leaving and not returning. Unless we can turn this around, I worry my own children will face little choice but to graduate and then emigrate. Where will my children have their children? My next moment of truth may be when my grand-kids arrive. Should I emigrate again to live in the same city as my kids and their kids? It's a decision some New Zealanders take, as can be seen in the number of retired New Zealanders migrating to Australia to be with their children and grandchildren. What's your story? New Zealand is about to have another debate about tax policy and economic policy. As a New Zealand-born graduate, what's your story and your views on what the government needs to do to get you to stay in New Zealand or to return? We welcome your comments below.