There has been a bit of talk recently about how well New Zealanders are doing relative to Australians. That is not surprising given the emphasis that the Government is putting on closing the wage gap between the two countries.

Some simple statistics, comparative real after tax wage earnings are quite revealing.

In the nine years up to September 2008 New Zealand's real after tax wage growth was just 3%. That is not 3% a year, but 3% over the nine years. Over the same nine year period Australia's real after tax wage growth was 19%, or over six times greater than in New Zealand.

Since September 2008 the real after tax wage growth in New Zealand has been 8.7%, compared to 4.8% for the same period in Australia. Nothing to get too excited about, but at least a trend in the right direction.

And the reasons for this change? Two stand out:

- Australia has had significantly higher inflation than New Zealand over the last couple of years.

- Tax cuts in Australia have been far more modest than those in New Zealand. And this is before the 1 October tax changes take effect here.

As I said, a start. It's a direction New Zealand must keep going in.