Swimming against the tide

We hear a lot about the thousands of New Zealanders who move to Australia every year. But as the Dom-Post reports this morning, it's not one-way traffic, and the commodity flowing this way is an important one; check this out:

Hundreds of Australian jobs have been shifted to New Zealand as producers there try to avoid the impact of high wages, a soaring dollar and restrictive labour laws.

Supermarket giant Woolworths is the latest to transfer jobs across the Tasman, shifting 40 contact centre jobs to Auckland this week.

Imperial Tobacco has also said it will move cigarette manufacturing from Sydney to New Zealand.

The companies are following in the footsteps of the food production industry, which has been shifting jobs out of Australia to take advantage of New Zealand's lower wages.

Heinz Australia recently scrapped more than 300 jobs across three states in favour of its large plant in Hastings.

According to the International Labour Organisation, Australian manufacturing workers earned more than US$35 an hour in 2008. In New Zealand, the rate is under US$20 an hour. 

There's a bit of a perverse logic here. One of the oft-quoted reasons for people heading across the ditch is the high wages on offer in Australia. But it's precisely the cost of labour that is making Australian businesses consider exporting jobs to New Zealand.

The nay-sayers will argue that this move will further condemn New Zealand to being a low-wage economy, but we beg to differ. The one thing that the New Zealand economy needs above all else at the moment is jobs, to get people off welfare and into work. Sure; the hourly rates may be lower than across the Tasman, but those who transition from being supported by the state to being in paid employment will experience the satisfaction of earning a fair day's pay for a fair day's work.

And there are other factors at play; read on:

High wages, penalty rates and productivity of Australian workers have all come under attack in recent months.

Toyota Australia chief executive Max Yasuda criticised the culture of his workforce at Altona, Melbourne, saying absenteeism could be as high as 30 per cent.

Earlier this year, Finance Minister Bill English said New Zealand was benefiting from a more flexible industrial relations environment.

"[It] has enabled quite a lot of flexibility to our manufacturing sector, which has in the last while been growing, despite the high dollar," he said.

Hastings Mayor Lawrence Yule said he believed New Zealand's "more holistic view on employment" had boosted its appeal to Australian companies such as Heinz, which is returning production of tomato sauce to Hastings, increasing production there by 10 to 15 per cent.

Mr Yule cited lower levels of unionisation, the ability to operate outside traditional daytime hours, and greater use of seasonal employees. 

"Our labour laws are more relaxed, as I'm told."  

Let's face it; the one thing that the New Zealand economy needs above all else is job opportunities, and they are coming from an unexpected source. If New Zealand's flexible labour market gives us an advantage over our West Island neighbours, we need to grasp the opportunities that arise from it and get New Zealanders back into work.