This article was first published by Stuff.
There are “hidden costs” in moving to Australia, is the warning to the record number of New Zealanders making the leap across the ditch in search of better pay and opportunities.
With New Zealand’s rising unemployment rate, job insecurity, thousands of job cuts, the spiralling cost of living, and a more direct route to Australian citizenship driving record emigration to Australia, we spoke to Kiwis about key financial differences between the two countries to weigh up.
“Stop romanticising Australia”, Sydney-based Kiwi comedian Jake Howie says to those who believe the promised land solves all financial woes.
“Australia is pretty cooked right now too...Try your luck if you feel like a change of scenery, but Kiwis seem to localise deeply global issues rather than understand that New Zealand is experiencing issues seen around the world.”
While grateful to live in “a lovely country” he’s critical of New Zealand’s “obsession” about thinking the grass is always greener.
“Maybe you will get paid more, maybe you won’t. Maybe some things are cheaper, maybe they’re not ... New Zealand is a prosperous nation that we are so blessed to call home,” he says.
“The proof of this is in the data, so look it up before going on some unbearable rant about in Aussie, blah blah blah”.
Wellingtonian Murray Cambie has lived in Australia for 10 years, first in Melbourne, now Brisbane. Even though his initial salary was 40% higher than he’d earned in New Zealand, he wished he’d come with a better plan.
“I wasted a lot of money coming here, not realising the way things work here. Now I know there’s lots of tips and tricks when moving here - like instead of getting a loan for a car or large asset, you can do ‘salary sacrificing.”
He wished he’d planned to become a permanent Australian resident from the outset, and Kiwis cab save money in the long term if they research at home, and make a clear decision about moving rather than leave one foot in New Zealand and having to juggle.
“I came with a mindset that it was going to be temporary. People do this because they might be in a probationary period in their new job, or don’t want to completely sell up in New Zealand but, if you don’t, you will end up with two of everything in each country - so my car has been sitting over in New Zealand for 10 years, and belongings packed up on the family farm that I have now bought again.”
He bought a house before the recent house price explosion that Australia is experiencing but warns the cost of living is also biting there.
“Everyone is noticing it. I have friends who run market stalls and they say people are not buying things they can do without, like plants. Everyone is budgeting more and there is less splashing out.”
Despite this, he says New Zealand prices are still higher.
“If I were to move back to I’d see it as a sacrifice of the lifestyle I have in Brisbane - the climate is great. Gold Coast is one hour south, and Sunshine Coast is one hour north.
Johanna Smith and her husband moved to Brisbane 15 years ago.
“It was very much, let’s go and make some money.”
She too says she wasted time and money at first and now runs a website www.movingtoaustralia.co.nz to share “things I wish I’d known beforehand.
“At first it was to share “little tips and tricks” I’ve learned so much and just little tips and tricks that I wish I’d known beforehand because it just would have saved me so much time and money.”
Many like Cambie and Smith told Stuff there were significant issues to understand how they affected budgets.
Healthcare
While Australia and New Zealand both have public healthcare systems, increasingly more Australians are buying private health insurance, with 55% of its population having private healthcare compared to 27% here, says senior researcher at MoneyHub, Chris Schulz.
“Some attribute this to the Medicare Levy Surcharge that people must pay in Australia if they earn above a certain threshold and don’t have private healthcare insurance,” he says.
Brisbane’s Murray Cambie says health costs are “definitely higher” in Australia.
“Not everything is covered like ACC or general health if you don’t have insurance. At a certain income if you don’t have private health insurance for all members of your family they sting you via a tax charge for about the amount private insurance costs. So you may as well purchase private,” he says.
Sydney’s Jake Howie agrees that Medicare doesn’t mean “free”.
“Every time I see the doctor it costs $125, and you get a $50 rebate from Medicare. My prescriptions are $16 a month.”
Peter Barron spent years working as a pharmacist in regional and remote Australia, and says Kiwis are surprised how costs mount up.
“Prescription co--payments are up to $31.60 per item for non-concession card holders and $7.70 per item for concession card holders.
For non-concession card holders you have to pay over $1647 per annum before the per item maximum drops to $7.70 per item.
For concession card holders you pay the first $277 of co-payments before the per item fee is zero.”
Student loans
Interest will be applied to student loans from the day after they left New Zealand.
The recent budget increased interest rates on student loans for people overseas, kicking in from 2025.
This affects young professionals Tim and Eva Mitchell, an engineer and pharmacist, who live in Melbourne and both have student loans but Tim says it’s outweighed by higher pay.
“When we got here in 2022 our combined income was 30% more than New Zealand.”
They are just back in Australia from a year’s travelling and have started their own business, both of which Tim said would have been not possible without the move and higher income.
While Australian universities have higher global rankings than New Zealand’s, they are also more expensive, and typically Kiwis on a visitor visa without citizenship will be ineligible for Australian student loans, HELP loans, says MoneyHub’s Chris Schulz.
Murray Cambie’s daughter is at high school in Brisbane but, because they haven’t got citizenship yet, she might not be able to access Australian student loans for further education, he says.
“I’d recommend to start the citizenship application as soon as you get here,” he says.
While New Zealand rents have recently hit record highs, with national weekly median rent at $650, and higher in cities like Auckland and Tauranga, rents across the ditch are also soaring.
Australia’s median weekly rent value has hit a fresh record high of $627 per week, and rental costs range from $770 per week in Sydney, to $547 in Hobart, according to latest Corelogic data.
Tim and Eva Mitchell’s one-bedroom apartment on the edge of Melbourne cost $490pw in 2022, and is now around $700pw.
“Now we are house-sitting as rentals have gone up so much, and there’s a queue of more than 30 people outside each rental.”
The soaring rental market is a new cost says Murray Cambie.
“It used to be in Brisbane, if you saw a place, you’re a reasonable tenant, then you’re guaranteed to be moving in.
Now it’s very hard to find a rental. My ex is still renting and paying significantly more than three years ago but she is trapped as the rental market is so tight.”
Buying and selling a house
There are extra transactional costs buying and selling property in Australia, MoneyHub’s Chris Schulz warns.
“Stamp duty is a tax imposed by every territory and state ... The amount depends on cost of the property, location, and the reason for the loan.”
Johanna Smith says costs can by alleviated by what she says can be a “generous” First Home Owner’s Grant,
“But eligibility varies in different states so, if you’re coming to buy, you need to check each location’s rules.”
You will also be subject to capital gains tax on the sale of property, and Smith says many Kiwis coming to Australia aren’t aware this can also apply to property sold in New Zealand.
“It’s complex if you have property back home too and, in some cases, I’ve referred people to a tax expert.”
Jake Howie believes the housing crisis is worse in Australia.
“Jacinda Ardern’s Labour really prioritised building healthy homes and this is clear and obvious compared to Australia.”
Howie bought an apartment in Sydney in 2022 and, even then, the stamp duty was expensive, he says.
“It’s an extra $20,000 minimum on a house purchase that you need to save up. It’s wild, and the only people who get to skip it are on houses under a $500,000 threshold which is literally impossible to find.”
Retirement
While Tim and Eva Mitchell are a long way from retiring, Tim likes that 11% Super is added on top of salary meaning they are saving for retirement from a young age.
The Australian pension is eligible from 67 and is means tested, compared to 65 years and none means tested in New Zealand.
The Mitchells both have houses in Christchurch, which they rent out - and pay tax on that income.
Smith says people who move to Australia to retire often do not realise the means testing includes global income and assets, which means property in New Zealand will be factored in.
However New Zealanders who are 65 or older and live in Australia may be able to get both an Australian age pension and New Zealand superannuation, depending on amount of time spent in each country.
Food
Dining out in Sydney is 100% more expensive than Auckland, Jake Howie says.
“While food shopping is around the same, going out for a meal in Sydney just keeps increasing. I ordered a pint of beer at a central Sydney venue and it was - gulp - $22 last weekend. It’s hard to spend under $150 per person when out, and it seems to be increasingly more.”
By Annemarie Quill of Stuff.