Probably just means not to expect similar salaries then you'd get in the US. Most IT jobs pay quite a bit less than other countries (UK, US, Aus) hence why most NZ IT people leave.
Given that they're apparently so desperate that they're resorting to this ridiculous tactic ("come interview in NZ and we'll pay for the trip for you!", something that used to be totally standard here in the US and still probably is for long-distance candidates), you'd think they'd wise up and raise their salaries to attract and retain people.
Yes, but this is major evidence of short-sighted thinking. If you're resorting to using a silly marketing campaign to convince people worldwide to come apply for jobs in your city, you have a serious problem already with a lack of skilled people, otherwise you wouldn't be resorting to such a desperate technique.
I think it is win/win. Presumably the Engineers interviewing have a salary already that the NZ company would have to compete with. The NZ lifestyle as well may be seen as a benefit not dissimilar to free food, foosball, laundry etc...