Table of Contents
You have to hand it to Jim Chalmers and Anthony Albanese. When it comes to economic vandalism dressed up as “intergenerational equity”, these two are in a class of their own – the remedial classes we used to call ‘veggie’ classes, back in the unenlightened day. Their big-taxing, promise-breaking budget has done what decades of Kiwi jokes never quite managed: it’s making New Zealand look like a tax haven.
Within 24 hours of Treasurer Zippy’s latest masterclass in robbing Peter to buy Paul’s vote with Peter’s own money, WhatsApp groups of business owners and property investors lit up like a Christmas tree. Dubai? Singapore? Florida? Sure, they got a mention. But the land of the long white cloud is suddenly the hottest ticket in town.
Across the Tasman, the $1.2m that fetched a median-priced home in Sydney stretches to almost $NZ1.5m. With no stamp duty and no capital gains tax, for now, it’s an enticing proposition for some.
What is lucky to buy you a hovel in punchbowl allegedly buys you a charming three-bedroom retreat on a hectare in Martinborough wine country or a designer cottage overlooking the yachts in Pūtiki Bay on Waiheke Island. No wonder NZ Sotheby’s website traffic from Australia jumped 24 per cent in the first two weeks of May compared with the last two weeks of April. Predominantly Sydney, but Perth, Adelaide and Hobart are piling in too.
Mark Harris, NZ Sotheby’s founder and a former Australian, has seen it all before. This time, though, he’s watching something different:
It’s a substantial move that will have investors potentially questioning their next move. I’m not sure it will have the desired effect of assisting young homebuyers.
No kidding. Labor’s war on negative gearing, the capital gains tax discount and discretionary trusts has asset owners wondering why they should keep feeding the Canberra beast when they could sell up, hop the ditch and keep more of their own money. New Zealand offers no land tax, no stamp duty, no CGT, lower relative income tax and the ability to negatively gear. It’s almost as if Kiwis never got the memo about ‘fairness’.
Business owners are eyeing the same escape hatch. Setting up a limited liability company across the Tasman is dead simple: online through the NZ Companies Office, no local director required. Chartered accountant Nicholas Patterson, who regularly advises Aussies, says it’s “a much easier path for Aussies than most other nationals”. Sure, you’ll still need to jump through anti-money-laundering hoops for a bank account and get your head around different employment laws, but compared with the Albanese-Chalmers tax guillotine, it’s practically a holiday.
Of course, there’s always the cultural fine print. New Zealanders are famously welcoming but famously loyal to local brands. As Patterson notes, plenty of Aussie outfits have come unstuck trying to muscle in on smaller Kiwi businesses. Still, when your alternative is watching Chalmers treat your life’s work as an ATM for his pet projects, a bit of cultural adjustment seems a small price to pay.
The irony is thicker than a Central Otago pinot. For decades Robert Muldoon used to quip that the traditional drift of New Zealanders to Australia was ‘improving the average IQ of both countries’. Now the traffic is threatening to reverse. Do you fancy some Vegemite with your butter chicken tsunami?
I can promise you that we at least don’t poo in the street or keep slaves.
It would be a big reverse of nearly a century of one-way traffic.
Stats NZ data shows just 2,500 of New Zealand’s 617,330 enterprises are Australian-owned, a mere 0.4 per cent. That number is about to climb. Property values across the ditch have already fallen 17 per cent nationally from their 2021 peak (Auckland down 25 per cent). Buyers are in the box seat. The weak economy, higher mortgage rates and global uncertainty mean the good times for punters aren’t guaranteed but, compared with what’s coming here, it’s looking positively rosy.
Chalmers and Albanese can spin their money-grabbing as ‘equity’ all they like. The punters aren’t buying it. Wealth creators aren’t fleeing to NZ because they hate Australia. They’re fleeing because this government hates them. When even the traditional butt of our jokes starts looking like the smart money, you know the joke’s on Labor.
Is New Zealand ready to become Australia’s own little Cayman Islands? Probably not. But thanks to this budget, plenty of Aussies are suddenly very keen to find out. Long may the exodus continue. The republic, or at least what’s left of it, needs its productive citizens more than ever.
You’re welcome to take Albo off our hands, though.
