Brits Flee Gloom At Home For New ZealandPosted on: 14 May 2009 by Gareth Hargreaves
The number of Brits leaving for New Zealand has soared by 20% in a year, and with unemployment and taxes rising more are expected to follow.
But why is the land of the long white cloud proving so popular. Phillip Scott investigates
With the Government's introduction of a 50% super-tax in the Budget and unemployment at its highest level since Labour came to power in 1997, the UK could be set to for a 'brain drain' as disillusioned Brits seek better opportunities abroad.
Some commentators predict that the likes of Switzerland will attract skilled high-earners, as a result of top earners facing the steepest tax rates since the 1970s, but New Zealand has already enjoyed a massive influx of Britons over the past 12 months - and its popularity extends beyond tax avoidance.
In the past year, the amount of Brits making a permanent move to New Zealand rocketed by 20%.
During the 12 month period, the land famous for its lamb, kiwis and being the location for 'Middle Earth' in the Lord of the Rings movies enjoyed a net inflow of 8,300 permanently migrating from the UK, up from 6,900 in the previous year.
The UK is the largest source country of migrants for New Zealand for the fifth consecutive year.
As many as 17,000 Brits move to New Zealand every year, including those who've chosen to migrate permanently and those who have entered under the country's Working Holiday Scheme, which was recently extended to 23 months – considerably longer than Australia's 12-month scheme.
According to commentators, most people are unsurprisingly tempted by the sunshine and scenery, alongside far lower crime rates and a higher standard of living.
In addition, the weakness of sterling against the euro means that many Brits wanting to migrate are increasingly looking further afield.
Andrew Lockhart, of Immigration New Zealand, says: “The effects of the recession appear to have spurred a lot of people into taking the plunge and making a permanent move abroad.
“There is still a huge variety of opportunities available for skilled British workers who are keen to move to New Zealand, from traditional occupations such as doctors, teachers and nurses to more unusual skills such as skydiving instructors and animators.”
Property & Taxes In New Zealand
The Official Cash Rate in New Zealand is 3% - its equivalent of the Bank of England's base rate of 0.5%.
The average house price in New Zealand is $378,000 (approx: £154,285.71), just below circa £160,000 in the UK. Property prices in New Zealand have fallen by about 10% from their peak in late 2007.
Renting by comparison with the UK is cheaper. It has a population of just 4.3m in an area around the same size as the UK.
In light of Alistair Darling's Budget, with a 50% tax for those earning £150,000 and the staged removal of personal allowances above £100,000, the highest earners will ultimately find that part of their income will be subject to a punitive rate of up to 62%, when the likes of National Insurance is thrown into the fiscal mix. Many could be motivated to take advantage of lower tax rates elsewhere. In New Zealand, tax currently stands at 39% for top earners.
This figure is lower than most EU countries, including Germany, 50.5%, Spain, 43% and Denmark, which stands at 59%. Across the water, Australia's own super rich tax rate already matches the UK's new rate of 50%.
New Zealand’s Economy & Job Prospects
Australia, is still taking a battering from the current global downturn, but New Zealand went into recession earlier and is more likely to return to positive growth earlier than most developed countries, including the UK.
In the past four months alone more than 100,000 redundancies have been reported in the UK and in 2008 about 130,000 workers in the financial sector lost their jobs. Jobs in the City have been hammered leaving many skilled workers looking for work.
In recent weeks, Royal Bank of Scotland and HSBC among others have, announced further job-cuts. The number of people looking for work jumped by 177,000 in the three months to February to reach 2.1m - the biggest quarterly rise since 1991.
While there may not be the same opportunity for high level jobs, the level of unemployment is lower in New Zealand, 4.7%, to the UK's 6.7%. The New Zealand government also has a savings guarantee scheme whereby it guarantees existing and new deposits of up to $1m per person in approved institutions. Shopping bills are circa 20% cheaper but earnings tend to be lower than in the UK.
However, New Zealand has not been immune from the impact of the deepening global recession. It is widely anticipated that this week the New Zealand central bank Governor will slash the benchmark interest rate for a seventh consecutive time in a bid to help exports and business investment.
It has a diversified export markets and has developed strong trade links with Australia, the US, and Japan. In April 2008 it became the first Western country to sign a free trade deal with China.
A quick look at Immigration New Zealand's website, shows where there are jobs available – especially for skilled workers. The country's immediate skills shortage list includes professions as diverse as engineers and midwives – and even tandem skydiving instructors.
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