Australia and New Zealand faced the same global inflation shock, but only New Zealand workers have been made to pay for it with their jobs, a new report from the Australian Council of Trade Unions (ACTU) shows.
The report finds the two countries have had very similar inflation outcomes over the past five years. What differed was how their governments responded. Australian policymakers chose to protect the post-pandemic gains in employment, while New Zealand aggressively pursued lower inflation at a major cost to working people.
“Across the Ditch, unemployment is a full percentage point lower, employment has kept growing through the entire post-pandemic period, and full-time employment has expanded significantly. In New Zealand, job numbers have fallen steeply and unemployment and underutilisation have skyrocketed,” says Sandra Grey, New Zealand Council of Trade Unions Te Kauae Kaimahi President.
“While Australia has added thousands of full-time jobs, New Zealand has lost thousands under Luxon’s Government. It’s no wonder so many young Kiwis have moved across the Tasman in recent years,” says Grey.
“The unemployment rate in New Zealand rose higher than ours and working people in New Zealand saw the largest fall in real wages in the OECD and found it increasingly difficult to find a job. This difference is because of different monetary, fiscal, and employment policy choices”, says Melissa Donnelly ACTU Secretary.
The report sets out how the two countries took very different monetary, fiscal, and employment policy approaches through the inflationary period, and how those choices led to very different labour market outcomes.
“Luxon’s Government slashed public services, cut public spending, and cancelled major infrastructure projects. The Australian Government did the opposite and backed the labour market by investing more in public services. Luxon’s Government helped drive New Zealand into recession in 2024, while Australia’s public investment helped it avoid one,” says Grey.
The report also contrasts the two countries’ employment relations policies.
“Luxon’s Government repealed the Fair Pay Agreements Act, while Australia’s Secure Jobs, Better Pay reforms have strengthened workplace protections and supported real wages through the inflationary period. In a time of rising interest rates, Luxon’s Government made life much harder for working people by pulling back public investment and stripping away employment protections. Australia’s approach shows a better way is possible,” says Grey.
“Both countries saw unemployment fall to decades-long lows in 2022, but only Australia has held on to those gains. Luxon’s Government made the wrong choices, and working people have paid the price,” says Grey.
“Inflation has gone up again in both countries because of rising fuel and energy prices from the US-led attack on Iran. The only real difference now is that, because of policy choices, New Zealand has been left with higher unemployment and worse real wage outcomes,” says Donnelly.
“Luxon has justified his Government’s choices as necessary to bring down inflation, but the Australian experience shows that isn’t true. When inflation is driven by international factors, the Government needs to support workers, not make their lives harder by tanking the job market,” says Grey.
“Luxon’s Government hasn’t delivered better inflation outcomes than Australia. All it has managed to do is destroy jobs and livelihoods and drive tens of thousands of Kiwis offshore. Vote for change this week. Don’t risk 6 years of Luxon,” says Grey.