Moving to Australia: Financial Winners and Losers

Last month I told you that my article Hard Yakka and the Cost of Living in Australia appeared in the November edition of Australia and New Zealand magazine.

It didn’t.

What did appear in that magazine was the article I am about to print below, which is the third and final part of my miniseries about the hard yakka for the magazine.

So as the following article DID appear in November’s edition, it would only be right that I have an image of the magazines’ cover from that month appear here. But instead, to the right, is the cover from October’s magazine, which is the image that should have appeared with last month’s article but didn’t.

I always think if you’re going to be wrong, be consistent.

Winners and Losers…

Last month I explained my hard yakka theory, which is a kind of unit of currency. If you have to work for 10 hours to earn enough money to buy something, that something has cost you 10 hard yakkas. I then went on to show you how things that might appear more expensive here in Australia can actually turn out to be cheaper in hard yakka terms.

I also promised to help you to calculate whether or not you’d be better off here. But first, let’s talk about the winners and losers, depending on your current financial situation, for those looking to move to Australia.

Let’s start with the losers…

Australia is not a great destination for those who have built up a nest egg and who are hoping to retire here. The current poor exchange rate between the pound and the Aussie dollar will make everything here seem really expensive. Holiday makers visiting Australia from the UK are also losers for the same reason.

I’m sure many have visited here and thought to themselves “No way! I’m not moving to Australia, it’s too expensive!” If you’ve recently been here on a recce and made that decision, understanding the hard yakka will probably change your opinion about that.

So who are the winners…

… and how can you tell if you’d be better off here or not? In a strange twist of fate, those with little or no savings and perhaps no equity in their houses have the least to lose from the poor exchange rate. They also have the most to gain from the higher wages paid here in Australia.

To see if you’d be better off in Australia, here’s my stunningly simple formula. I know I briefly mentioned this a couple of months ago, but that was just in a one-liner and I think it’s worth saying more about it than that.

It’s this:

whatever you are earning in the UK in English pounds, look to secure a job here in Australia that earns twice that amount in Australian dollars. Currently earning £40,000 in the UK? Then go for a minimum of $80k here.

Funny thing is that’s usually not hard to do, depending on what you do for work.

The bottom line with Australia is some things are more expensive, some are cheaper and a lot of things are more or less the same price. Noticeably more expensive here is alcohol, distinctly cheaper is petrol, for example. Drinking petrol isn’t the answer.

Some things appear more expensive with a direct currency exchange comparison, like housing, but then become cheaper here in Australia when looked at in terms of the hard yakka. According to a recent survey by UBS called “Prices and Earnings”, in Sydney, the only Australian city included in a survey of 73 cities worldwide, salaries were the fifth highest in the world. In the same survey, Sydney had the second highest “domestic purchasing power”. Those two together suggest that Sydney’s workers see their money stretch further than anyone else on earth.

It’s likely other towns and cities in Australia would have fared just as well, had they been included. So, Australia isn’t as expensive as you might think, and if the pound ever climbs above two Aussie dollars again, even the losers will become winners.