LURE OF AUSTRALIA REMAINS STRONG AS KIWIS LEAVE IN RECORD NUMBERS: WHAT DOES IT MEAN FOR NEW ZEALAND’S ECONOMY?

A record number of New Zealand citizens left the country in the year to September, with about half of them heading to Australia. This trend has been ongoing for some time, and Stats NZ recently released data showing a net migration gain of 44,900, sharply down from a provisional peak of 136,300 recorded in the year to October 2023.

Understanding The Core Concepts

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The recent exodus of New Zealand citizens has significant implications for the country’s economy. With a net loss of 54,700 New Zealand citizens in the year, driven by 79,700 departures and 24,900 arrivals, it is clear that the allure of Australia remains strong.

Key statistics:

* Record number of New Zealand citizens leaving the country (about half headed to Australia)
* Net migration gain of 44,900
* Provisional peak of 136,300 recorded in October 2023
* Net loss of 54,700 New Zealand citizens

How To Implement Best Practices

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To understand why this trend is occurring, it’s essential to examine the factors driving New Zealanders’ decisions. Australia’s labor market is considered stronger than New Zealand’s, with employment growth in Australia remaining fairly robust (3.1% year-on-year as of September). In contrast, employment in New Zealand is contracting (0.4% year-on-year as of the September quarter).

Key drivers:

* Stronger labor market in Australia
* Higher job prospects and better economic conditions abroad
* Weaker labor market in New Zealand

Why This Matters For Business

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The exodus of New Zealanders has significant implications for businesses, particularly those relying on skilled workers. With a shrinking pool of available labor, businesses may need to adapt to remain competitive.

Impact on businesses:

* Reduced availability of skilled workers
* Increased pressure on remaining staff
* Potential impact on productivity and profitability

Why The Lure Of Australia Remains Strong

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ASB economists suggest that departure numbers will continue to be historically high as people seek better opportunities elsewhere. Chief economist Nick Tuffley noted that the number of people leaving the country could exceed those coming in next year, posing a challenge to New Zealand’s economic recovery.

Key points:

* Departure numbers will remain high due to stronger job prospects abroad
* Economic conditions in Australia are more favorable than in New Zealand
* There is a risk that net migration figures could weaken if departure numbers do not slow

Westpac Economists’ Perspective
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While the outright number of departures has slowed in recent months, senior economist Michael Gordon noted that “some of the surge in departures will have reflected catch-up activity after the border was reopened — and perhaps to a greater degree than we had assumed.”

Key points:

* Recent slowdown in departures may be due to catch-up activity
* Labor market conditions in Australia remain stronger
* Weaker labor market in New Zealand is driving exodus

ANZ Economist’s Viewpoint
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Henry Russell agreed that monthly departures seemed to have passed the peak but remained elevated. He attributed the sharp fall in net migration inflows to “the relative weakness of New Zealand’s labor market.”

Key points:

* Monthly departures may have peaked, but remain elevated
* Weaker labor market is driving exodus
* Stronger labor market in Australia remains a key driver

Conclusion

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The lure of Australia remains strong for New Zealanders, driven by stronger job prospects and better economic conditions abroad. With a shrinking pool of available labor, businesses must adapt to remain competitive. Understanding the factors driving this trend is crucial for policymakers and businesses alike.

Recommendations:

* Improve economic conditions in New Zealand to retain skilled workers
* Enhance labor market competitiveness through targeted initiatives
* Monitor departure numbers closely to adjust policy responses accordingly

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