Monday, 29 September 2008

Apples and oranges

Something we’ve been trying to work out – and that people have asked about – is how the cost of living here compares to the UK.

Here’s what I’ve noticed so far…

1. Trying to do simple exchange rate conversions doesn’t really work because the rate is fluctuating a lot at the moment. So when we arrived it was £1:$2 which made food and shopping seem relatively expensive but salaries seem high. Now it’s back to about £1:$2.25 so shopping seems cheaper but our pay packets seem less impressive!

2. Expectations of lifestyle are quite different. Here, it's pretty average to own your own plot of land and build your own house with pool, outdoor patio etc. Similarly, a ‘small’ car here is a Ford Focus or equivalent and most people have 4 wheel drives or “Utes”. So if you don’t go in for all of that (we prefer to save as much as we can for holidays!), then your relative cost of living seems quite reasonable.

3. Australia seems to be fairly high-salary, low-tax, for the middle classes anyway, or to coin the media’s terminology, the ‘average working family’. Although you hit the 40% tax band at a lower level than you do in the UK, you pay quite a bit less in council tax as the ‘rates’ here just pay for roads and rubbish collection.

4. But! If you’ve got kids, or are likely to need anything other than basic health care at any point in your life, you’re likely to have to budget for private health insurance and, for a significant number of people, for private education. Apparently something like 35% of Aussies send their kids to non-state schools, with 2/3 of these being Catholic fee-paying schools and the rest being what we’d think of as ‘public school’.

5. Australia has a compulsory superannuation (pension) scheme where employers have to pay 9% of your salary into a superannuation fund. But Aussies have very much less by way of other employment benefits. Sick pay and holiday pay are much less generous than in the UK.

6. And, unbelievably in the 21st century, there is NO right to paid maternity or paternity leave OF ANY KIND. That’s right – nothing, nada, zip, diddly squat. Women just have to pop off, have their kids and rely entirely on their partners or their own savings to support them. There’s also no state support for childcare as far as I can make out. I find it incredible and shocking in equal measure and it really makes me appreciate the benefits of having had a Labour government in power in Britain for 10 years. The new Australian Govt is looking into the whole issue and is considering changing this, so...

So all in all, for me and K, the upshot is that we’ve got a better quality of life here, relative to our earnings, than we would have in the UK. But that’s primarily because a) we have different expectations to most Aussies b) we’re not planning to have kids here and c) we’re not planning to grow old and infirm here.

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