Overseas IT Professionals Guide To 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.

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. 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.

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 liveability of developed countries (http://www.melbourne.vic.gov.au/rsrc/PDFs/Research/LivabilityStudy.pdf). In 2004, Australia rated third on the list of the most liveable 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 the websites (www.ticketek.com.au and www.ticketmaster.com.au).

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: (www.afc.gov.au and www.film.vic.gov.au)

COMPARIONS TO THE USA

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 generalism 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 = ($55.7K). With the AUS$ 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 (www.rpdata.com/news/api/api_20060807.html) 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 (www.realestate.com.au)

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 statistics:

Information and Communication Technology (ICT) EMPLOYED PERSONS, 2005– 06

Computing professionals and technicians ( '000’s)
Information technology managers 43.4
Computing professionals 162.0
Computing support technicians 41.3
Total246.7

“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.”

“There is a high concentration of ICT workers in capital cities. In 2005–06, 78% of all people employed in ICT occupations were based in a capital city, compared with 63% of all employed people.”

“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, ADAPS, 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) ADAPS has some authority in discussing the most sought after Australian IT skills. Lately we have noted a skills shortage particularly in the following areas:

C++/ C# / C*
.NET technologies
Advanced Web design
J2EE
SAP
PeopleSoft
Siebel
Oracle E-Business Suite
Network Security/ Firewall/ Internet Security
PKI
E-Commerce security (non programming)

As Australia’s IT industry forges ahead, this shortage is becoming more pronounced some recruiters like adaps have begun sponsoring oversees IT workers. The added benefit that niche players like adaps have developed is creating the possibility of paying the 'Living Away From Home Allowance' in advance.

To reduce the risk for oversees IT Professionals having their contracts cancelled, this author’s company has taken the unusual step of offering companies a full fee return should they find a contractor unsatisfactory for any reason within the first twelve months of employment (even on contract).

THE BOTTOM LINE

The remuneration 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 potential 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 Minimum Maximum Average
Architecture $50,401 $166,568 $98,323
Business/Syst Analyst $39,600 $147,000 $79,474
Database Dev & Admin $31,111 $117,000 $70,028
Hardware Engineering $42,000 $128,000 $71,501
Helpdesk Support $29,398 $116,000 $55,964
Mangmnt &Supervisory $43,383 $244,280 $103,174
Networks and Systems $34,600 $139,000 $72,693
Project Management $33,800 $159,280 $89,569
S/W Dev & Engineering $33,600 $185,000 $76,042
Technical Writers $53,750 $89,170 $70,595
Testing and QA $40,180 $103,760 $67,839
Training $33,600 $82,000 $54,590
Web Design & Usability $43,000 $168,000 $92,341
Web Development $37,400 $126,000 $70,279

So what do these figures mean for oversees workers interested in working on contract in the Australian IT industry? An oversees resident working in Australia will most likely attract the ‘Non-resident’ tax rate as shown on The Australian Tax Office site at: http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm

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. An example fot the disposable income that an oversees worker may accumulate is : 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.