Living and Working in Australia
Australian IT Industry
Australian consumers are one of the fastest adopters of new technology as are our industries. However due to ‘scales of economy,’ the majority of our hardware and software comes from the US and Japan. That said, Australia has a strong creative streak in many niche IT new product development projects. In particular, we are very strong with software development and technical management disciplines and enjoy using the latest IT techniques.
A good indication of the state of the Australian IT industry can be gleaned from ABS (Australian Bureau of Statistics) reports (www.abs.gov.au). In particular the series of reports: ‘Australian Labour Market Statistics’ (cat. no. 6105.0) provides the following information:
“During the five year period from 2001–02 to 2005–06, the industry which employed the largest proportion of ICT workers was the Property and business services industry (which includes a Computer services subdivision). In 2005–06, about 37% of all ICT workers were employed in the Property and business services industry, compared to 12% of all employed people. Computing professionals and technicians accounted for 85% of all ICT workers in this industry. The second largest group of ICT workers was in the Communication services industry (13%) with most employed as Electronic engineers/technicians and communication technicians.”
“The proportion of total employed people who are ICT workers has remained relatively stable at around 3.5% over the five years to 2005–06. In 2005–06 almost half (47%) of all ICT workers were Computing professionals (i.e. system managers, designers, programmers and auditors, software designers, and applications and analyst programmers).
The number of Electronic engineering associate professionals fell by 39% between 2004–05 and 2005–06.”
“Over the five financial years to 2005–06, the number of overseas-born ICT workers increased from 115,200 to 134,300. In 2005–06, 39% of all ICT workers were overseas-born, compared to 25% of all employed people.”
IT Skills Shortage
The IT recruitment company that the author of this web report works with is ADAPS, which has grown substantially over the last five years to become one of the top five IT recruitment companies in Melbourne. With this high level of recruitment (exclusively in the IT industry) we feel we have some authority in discussing the most sought after skills. Lately we have noted a skills shortage particularly in the following areas:
- C++/ C# / C*
- .NET technologies
- Advanced Web design
- Oracle E-Business Suite
- Network Security/ Firewall/ Internet Security
- E-Commerce security (non programming)
As Australia’s IT industry forges ahead, this shortage is becoming more pronounced and has led to ADAPS taking the pro-active step of sponsoring oversees workers. For instance, If someone is based outside of Australia and sees a contract role on the ADAPS jobs site that interests them, and they apply and are successful, ADAPS will discuss the process of sponsoring the workers visa and possibly paying their 'Living Away From Home Allowance' in advance.
Traditionally, the highest perceived risk for an oversees contractor has been the prospect of relocating to Australia only to find that a job ‘evaporates’. To allay this fear ADAPS has taken the unprecedented step of guaranteeing the optimum match between contractor and client by offering a full fee return to the client should they find a contractor unsatisfactory for any reason within the first twelve months of employment (even on contract). This, of course, means that the non-commissioned ADAPS Client Managers take exceptional care in selecting the right candidates for the jobs which naturally minimizes the risk of early contract terminations.
The Bottom Line
The compensation for IT workers in Australia is generally well above the average wage. This, coupled with the relatively low accommodation rent costs and the very high ‘liveability ranking’ for both Melbourne and Sydney, makes Australia a very attractive destination for oversees IT workers.
The table below shows the average annual wages (permanents) for different IT roles. It should be noted that these values are the average for IT workers across all industries. (Source: http://mycareer.com.au/salary-survey/it-telecommunications)
- Architecture $98,323
- Business Analyst / Systems Analyst $79,474
- Database Development and Administration $70,028
- Hardware Engineering $71,501
- Helpdesk and Desktop Support $55,964
- Management and Supervisory $103,174
- Networks and Systems $72,693
- Project Management $89,569
- Software Development and Engineering $76,042
- Technical Writers $70,595
- Testing and QA $67,839
- Training $54,590
- Web Design and Usability $92,341
- Web Development $70,279
An oversees resident working in Australia will most likely attract the ‘Non-resident’ tax rate as shown on The Australian Tax Office site.
Before we consider a worked remuneration example, it should also be noted that the table above is for ‘permanent’ rates which are often considerably less than contract IT rates. For instance, consider that a contract Test Manager working on a Global Data Warehouse (ADAPS role 18202) was advertised only this week for $750 a day (equivalent of $180K a year based on 48 working weeks) and this yearly sum is higher than the maximum of ANY classification in the above table!
For our example, consider in 2007 a non-resident earning $150,000 and working 48 weeks (equivalent to $625 a day) would most likely be taxed at $52,250. If they rented a house in Melbourne worth $500 a week ($26K a year) this would still leave them with nearly $71K (not including any rebates they may receive for their ‘Living Away from Home Allowance’).
As you can see, it truly pays for an IT contractor (resident or non resident) to live and work in Australia. Our industry is flourishing and is expected to continue growing for a long time to come.
Living and Working in Australia
The author of this article has lived in many parts of the SE of Australia – where the main population lives – especially the two largest cities of Sydney (4.2 M people) and Melbourne (3.6M). As I currently live in Melbourne some of the examples will be biased towards this great city.
Facts about Australia
As many people know, Australia has a large land mass populated by relatively few people – due to the interior desert regions. Australia’s population has just passed the 20 million mark - 20,728,983 as of Jan 4, 2007. Around 90% of Australians live on coastal regions and our climate is classed as temperate (very pleasant). In general Australian’s experience warm-hot summers; mild spring and autumn and cool winters. Winters are in July and in Melbourne we have average temperatures of 41 to 55 degrees Fahrenheit with temperatures ranging from 57 to 78 degrees Fahrenheit in the peak of our February summer. Noting that in summer there are often a couple of days that can reach over 100 degrees Fahrenheit. The average monthly Melbourne rainfall is about two inches for any one month.
Melbourne is located in Victoria at the SE extreme of the continent and is the smallest mainland state (228,000 square kilometres) - slightly smaller than the US state of California. Sydney is located in New South Wales, about 900 Km NE of Melbourne.
Life in Australia
To gain an understanding of what it might be like to live in Australia, it is useful to consult some recent independent reports. The ‘United Nations Development Programme (UNDP)’ annual constructs a Human Development Index (HDI) to rate livability of developed countries. In 2004, Australia rated third on the list of the most livable countries, with the US rating eighth. In 2004 another group ranked all major global cities and selected Melbourne as the world’s highest ‘Quality of Life’ Ranking and placed Sydney at number six. The weighting factors included: Stability; Healthcare; Culture and environment; Education and Infrastructure.
Besides these very high standards of living, it is worth noting that Australia is a large sporting nation and loves its popular entertainment. Whilst Australia is known for its world class swimmers, rugby union and cricket teams we also have a high interest in soccer, all other forms of football (Australian Rules and Rugby League), basketball, baseball etc. General large venue entertainment can sampled from Ticketek and Ticketmaster.
Entertainment wise while Australia is globally most noted for its soap operas (‘Neighbours’ and ‘Home and Away’) we also have a strong music and film industry. Australia has also had a few good years on the international film scene with its now predominately US based Australian actors, however the local industry is still gathering pace. To see what is happening in the Australian film industry readers might like to visit film sites such as AFC and Film.gov
Comparisons to the United States
Having a similar culture to the USA and the UK (after years of saturation with their consumer products, music and films), Australia is eminently accessible and enjoyed by visitors from both these countries. The major difference is often said to be the Aussie ‘laid back’ approach to life. While this generalization can appear disarmingly charming, Australians still take very seriously aspects of culture such as loyalty (mateship), the environment, ‘home grown’ entertainment and a high rate of hi-tech uptake.
The latest Australian housing surveys have revealed that major Australian cities are becoming expensive due to housing prices and a significant appreciation of currency against the US dollar. Sydney still remains the most expensive city in Australia with its rank going up from 103 in the world in 2001 to 20 in 2004. In 2004, Melbourne held the second highest expensive Australian city position with its rank rising from 129th position to 67th position during the same period.
While housing prices have risen substantially in most capital cities since 2000, rentals have not kept pace. This fact still makes Australia a very attractive proposition for US IT contractors intending on working and renting in Australia. For comparison of the ‘Most Unaffordable Housing Markets’, consider that in 2006, Los Angeles USA still ranked as the worlds most unaffordable housing city (house cost of 11.2 x the median wage) while Sydney Australia was 8.5, New York USA (7.9) and Melbourne house prices were 6.4 times the median wage.
To put that into perspective, the 2006 September median house prices were: Sydney $520,000 and Melbourne $357,000. Using the ‘Unaffordablity ratings’ above, that gives Sydney a median wage of $520k/ 8.5 (= $61.2K) and Melbourne a median wage of $357K/ 6.4 = ($55.7K). With the AUS$ currently hovering around 80 US cents that makes the median wages: Melbourne (US$44,000) and Sydney (US$49,000).
The very good news for visitors is that while our house prices have seen a dramatic climb in recent years, the rental prices are still quite reasonable. A report by a leading real estate data company shows that in August 2006, that “Australia's capital cities gross rental returns on houses remain at around 4 per cent. Based on median house prices and rents for three-bedroom houses.”
Thus the rent on the median three bedroom house in Melbourne would be a quite affordable 4% x $357K = $14,200 p.a. or $275 a week. If you wish to see some current examples of house rental prices you may like to look at.