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The Hollowing Out Of New Zealand

Kiwis are fleeing home at a record pace, and with a panache that’s snared them a reality TV show. But the reality of their exodus is much more dramatic for New Zealand’s economy, now and in the future.

Imagine an Australian city the size of Coffs Harbour or Gladstone disappearing each year. Or Brentwood, California. Or Waterford, Ireland.

Each has a population of around 50,000 — about the number of people who leave New Zealand, which has a total population of 4.4 million, every year to settle in Australia.

New Zealanders are well used to waving off family as they depart for Australia — brothers, sisters, children, even their parents, these days.

Still it came as a shock to many on Monday, May 21, when New Zealand's government statistician announced the breaking of fresh records in the country's exodus to Australia: outflows have reached their highest point ever, at 53,500 annually. That is about equal to the population of New Zealand's 10th largest city, Rotorua.

Some 700,000 New Zealanders now live overseas; about 550,000 are in Australia.

The only developed nation that rivals New Zealand for the export of its citizens is Ireland.

The only developed nation that rivals New Zealand for the export of its citizens is Ireland, which has a similar population (4.5 million) and a rising annual outflow of people, now running at some 75,000 a year.

The Great Leaving has come to be a dominant cultural narrative within both countries; the Irish Times newspaper has begun a well-read blog, Generation Emigration, which chronicles the voices of the leaving and the often angry lamentations of those staying, particularly the parents.

Meanwhile New Zealanders lately have been absorbed by a new television reality show, The GC, which, in the mould of the US hit show Jersey Shore, follows the flashy lives of a group of buff young New Zealand Maori men and women who've moved to Queensland's Gold Coast for love, ambition and money.

The show, which debuted this month to an unexpectedly large audience of 370,000, has polarised New Zealanders. The Prime Minister, John Key has been forced to defend the show's government-sourced funding to viewers who fear that it will only encourage yet more young people to leave. However, the show has been mainly well received by New Zealanders living in Australia.

Christel Broederlow, a New Zealander resident in Australia and owner of the Maori in Oz website, acknowledges that show has aroused anger in New Zealand. The GC may indeed encourage more young New Zealanders to Australia, she says, but what's the matter with that? "I can only put it down to one thing, really, and I call it jealousy. I am sorry, but I do. I can't understand why there is such a negative portrayal of this show, because these young people are really getting up and getting active and doing what I feel is going to have an inspirational flow-on to other youth in New Zealand."

That is not the way it's seen by one of Australia's leading demographers, Professor Bob Birrell of Monash University's Centre for Population and Urban Research. He says New Zealanders increasingly regard the Gold Coast and southeast Queensland as a province of New Zealand — and that is a problem for Australia.

"This is open-ended and out of control. There is no control over the numbers coming, what the occupations are of those coming and where they locate. That's a problem," says Birrell.

New Zealanders have enjoyed the right to live and work in Australia since the 1920s — and Australians to live in New Zealand. But since the early 1980s, the traffic has been increasingly one way, as Australia's economy and opportunities have outpaced New Zealand's. While well over half a million New Zealanders live in Australia, fewer than 70,000 Australians have gone the other way.

<p>The Global Mail</p>

The Global Mail

THE MIGRANTS WHO ARE fleeing Ireland and New Zealand share a common driver: an anaemic home economy. Ireland in particular illustrates the force of economics on immigration trends: In the years of Ireland's status as the Celtic Tiger economy, its population swelled and unemployment plummeted. Come the financial crisis that began in 2008, though, the cascading effects in Ireland later saw an an unemployment rate that rose to nearly 14 per cent, rock-bottom property prices — and eventually another exodus.

New Zealand, arguably, has double drivers: not only is its economy performing poorly, Australia's is rollicking. New Zealanders have been pushed — and pulled — toward their western neighbour.

The statistics tell the story. The Australian economy has created 1.3 million new jobs since the end of 2005, compared with 116,000 in New Zealand — that's a 13.3 per cent increase in the number of new Australian jobs compared with 5.5 per cent in New Zealand. Average weekly wages in Australia are now more than $400 above those in New Zealand.

The sensitivity of New Zealanders toward the loss of their population is understandable. New Zealanders have long accepted that many of their highest academic achievers will be lost forever. No other developed nation has more of it best and brightest working overseas, according to a 2010 report by the Organisation for Economic Development and Cooperation that ranked New Zealand as the OECD's top exporter of its most qualified citizens. One-third of all New Zealand-trained doctors, for instance, work overseas. Nearly one in four graduate New Zealanders move overseas, compared with 14 per cent of Australia's most skilled.

Now, not only are these high achievers often leaving New Zealand but so too are the masses in the middle according to Australian and New Zealand Government statistics.

To get a picture of the effect upon New Zealand of such a vast and sustained exodus of its people, imagine an apple eaten down to its core. The middle disappears — in much the same way as the middle of New Zealand's population is being eaten away by migration — while the young at the bottom of the apple and the elderly at the top continue to swell the apple at either end.

New Zealand, of course, is far from alone in having an aging population. Around the world, developed nations face the same demography, a result of their declining birth rates and their better medical care, which is allowing us to live ever longer.

But the aging of the New Zealand population is being propelled at an even more alarming rate by the loss of its younger people through emigration, overwhelmingly to Australia. These are typified by the cast of The GC.

No other developed nation has more of it best-qualified citizens working overseas. One third of all New Zealand-trained doctors, for instance, work overseas.

Out of all OECD nations, it is New Zealand that will see the greatest rise in the numbers of its elderly — a situation that has partly come about, ironically, because no other developed nation experienced a per capita post-war baby-boom as large as New Zealand's. Those record numbers of baby-boomers are now fast aging the entire population.

The New Zealand demographer Professor Natalie Jackson, director of Waikato University's Population Studies Centre, has made a sobering forecast for the country: In less than 12 years' time the numbers of elderly New Zealanders (65 years plus) will exceed the numbers of young people (up to 14 years old).

That means New Zealand is facing a youth deficit of crisis proportions, ever more so as its young people continue to flock to Australia. Especially crucial to the country is what happens to the current crop of young New Zealanders, still in the country, aged between 15 to 19. They are, effectively, New Zealand's last chance generation.

In her recent study of the New Zealand's demographic future, Professor Jackson said: "If just a small proportion of the current 15-19 year old cohort leaves New Zealand and doesn't return, New Zealand employers will be faced with a labour shortage of crisis proportions."

The effects upon New Zealand of this loss of the young are already stark. Surveys are beginning to show that young people are fading out of some industries. In some regions of New Zealand in the health care industry, for instance, there are only three people aged under 30 employed for every ten aged 55 years and over. There are similar low ratios emerging between young and older workers in New Zealand's economic backbone — the farming industry.

"These ultra-low ratios raise many questions," says Professor Jackson in her study. "For example, who will buy or inherit the farms as their older owners relinquish them… it is clear that a crisis of succession is facing New Zealand's farming industries."

She forecasts that the coming labour shortages in New Zealand will lead to higher wages (as employers compete for staff). In turn, prices will increase — higher living costs.

<p>Photo courtesy of TV3</p>

Photo courtesy of TV3

Rosanna and Zane of The GC.

That feeds a vicious circle if, as most studies have concluded, the dominant motivation for New Zealanders to emigrate to Australia is to escape high living costs due to comparatively low wages. The average New Zealand wage amounts to only 64 per cent of comparable Australian wages, and that gap is widening.

THIS WEEK'S RECORD EMIGRATION figures caused the veteran New Zealand politician and longtime cabinet minister Winston Peters to turn on his country's market-based economic policies. He said: "About 1,000 Kiwis a week, many of them qualified in trades, are quitting our country. This loss is ripping the heart out of our economy and creating a serious lack of grunt for future growth."

New Zealanders have had virtually unfettered access to Australia since the1920s, a situation cemented by the 1973 trans-Tasman Travel Arrangement, signed by the then Australian and New Zealand immigration ministers. Australia changed the agreement in 1981 to require New Zealanders to carry passports, following concerns that non-New Zealand citizens and criminals were using the arrangement to enter Australia.

The rules were changed again a decade ago — also at Australia's insistence — to limit Australian welfare benefits available to New Zealand migrants. This came in response to concerns that immigrants to New Zealand were leaving for Australia as soon as they obtained New Zealand citizenship and that New Zealand citizens had too easy access to Australian welfare benefits.

Inevitably the recent surge in arrivals from New Zealand will refocus attention within Australia on the open-ended access arrangements for New Zealanders.

Monash University's Professor Birrell is among those who believe the arrangement should be reviewed in light of the latest figures.

"I think that the time has come to establish whether New Zealand should continue to have this open-ended access arrangement given its scale and the fact that we've not got control over it," he said.

“About 1,000 Kiwis a week, many of them qualified in trades, are quitting our country. This loss is ripping the heart out of our economy and creating a serious lack of grunt for future growth.”

He said New Zealanders were competing against Australians for jobs in the softening labour market on Australia's eastern seaboard.

"We are adding a significant influx of migrants to this job market. They are adding to the competition for available work. So it's a concern. And also people are getting restive about the ability of Australian governments to accommodate the record high migration numbers that we have experienced in the past decade."

Of course the notion of restricting migration to Australia is not a popular cause within New Zealand. Professor Paul Spoonley, leader of New Zealand's Integration of Immigrants Program in Auckland, believes that no New Zealand government would move to curtail the arrangement: "It would be politically unacceptable to abandon it, so it is not an option."

Nonetheless, Birrell says, Australia does well out of New Zealand migration. He describes New Zealand as an excellent source of skilled migrants and points out that New Zealanders perform well in the Australian job market. New Zealand citizens have a high labour-force participation rate (76.9 per cent) compared with the Australian average (68.5 per cent). This is partly related to the concentration of New Zealanders in the young adult age groups, who are more employable.

Increasingly, they are staying on in Australia rather than returning home to raise families.

The great New Zealand scholar, writer and soldier John Mulgan, author of the seminal New Zealand novel Man Alone, wrote from Cairo in 1945 of his countrymen:

They came from the most beautiful country in the world but it is a small country and very remote. After a while this isolation oppresses them and they go abroad. They roam the world looking not for adventure but for satisfaction. They run service cars in Iraq, gold mines in Nevada or newspapers in Fleet Street. They are a queer, lost, eccentric, pervading people who will seldom admit to the deep desire that is in all of them to go home and live quietly in New Zealand again.

No longer, it seems.

27 comments on this story
by TFraser

Australia does very well out of this deal. It gets a willing labour force that it hasn't trained, educated or paid for, at no cost and no risk. The changes brought in in 2001 mean that NZers who arrived since that date are migrant workers: They can come to australia and live but only as long as they have a job and can support themselves. They pay taxes, but do not get the benefits of being citizens. The vast majority do not meet the criteria to get permanent residency and therefore citizenship. They can't vote, receive benefits, and a growing number of grants exclude NZers. Unlike other temporary residents, once they leave Australia, they can not claim their super, so they lose that unless they remain in Australia. There is no social welfare net for NZers working in Australia, nor for their children. Their children, even if born here, do not qualify as citizens, and do not qualify for ausstudy or apprenticeship programs. So as long as Australia needs workers, the NZers in Australia are ok - but once that changes, or they get sick, or poor or old, they will not be welcome in the Lucky Country.

May 24, 2012 @ 12:52pm
by Budovski

So in short our mass immigration not only makes my life more expensive it is ruining New Zealand as well. Can someone please explain why we need such high levels of population increase? Is our economic model dependent on it? How come European countries can survive with zero or negative population increase rates?

May 24, 2012 @ 9:24pm
by Daniel

I read this article with real interest. I'm shock that that many NZ are coming into Australia. Id like to know what the NZ government is planning on doing about this though.

May 24, 2012 @ 9:56pm
by David

That's a very nasty comment.

Change NZ to Irishman, then think about your forefathers.

May 25, 2012 @ 4:36am
by Peter

I believe T Fraser is correct. The Australian Gov:t appears to be taking a sensible line on witholding various benefits from immigrants. The NZ Gov:t could learn some lessons from their counterparts "across the ditch".

I am reminded it was not always so; arriving in Sydney in 1946 as a British Merchant Naval officer cadet, I met a delightful family who offered to "adopt" me. On the day we sailed, Sam(the father) told me that all I had to do was...."jump in the car, we'll hide you away for 3 weeks, then you give yourself up to the police. They will get you to sign a form.....and you'll become an Aussie citizen" Those were the days!

May 25, 2012 @ 12:50pm
by Azrael

Surely if there's a skilled labour shortage, that will just put NZ in the same situation as Australia circa 2008 - i.e. with very high wages for blue collar workers. Yes that puts pressure on inflation, but it also creates greater egalitarianism, as it means that a greater proportion of the price of a product goes to the employees that made it. Most people are employees, and most people win out.

As the article states, the reason why Australia is attractive is BECAUSE we have extraordinarily high wage costs. Nobody would be coming here just so they could line shareholders' pockets. If NZ ends up with high wages as the result of a skills shortage then I have no sympathy for the business end of town - for the past century they've been bleating about how wages must be determined by market forces, and now that we're in one of the very rare periods where the market favours the employees, suddenly they're crying for government intervention (via skilled migration programs). If they had payed a better wage (yes, increasing prices - but also increasing wages as a proportion of product price) they wouldn't be in this position.

May 25, 2012 @ 1:11pm
by Michael

Thanks for the article. It's about time we were exposed to an honest analysis on this topic. I am friends with many NZ immigrants and have always assumed NZ will be worse off in the long run because of it. For Australia though I can only see positives from this mass emigration. Further analytical reporting on the number of NZ foreign immigrants who use New Zealand as a launch pad to Australian citizenship would be worthwhile and eye opening I would think.

May 25, 2012 @ 5:09pm
by tony

2 points -
Just to add to the perspective of the author, NZ has experienced a net loss in migration since October 2011.

Currently any NZ'er can work in AU regardless of skill (or lack of skill). Why have this special condition? More equitable if perhaps NZ'ers are treated as all other migrants to Australia, in that one can only enter if one has a required occupational skill.

May 27, 2012 @ 9:56am
by PeterC

I love the fully awesome CLICK BAIT photo at the head of the article, but it would perhaps be more at home on the front page of the on-line Sydney Morning Herald, where irrelevant click bait has apparently replaced factual news value.

They seem to have stock photos of triumphantly posturing, stunning spokesmodels for every conceivable kind of news story that might arise. A glorious new trend in journalism.

But thanks for the customer service.

May 28, 2012 @ 11:18am
by Nicola

TFraser makes a couple of incorrect points:

Children born in Australia to non-citizens can generally become citizens on their 10th birthday:

Those New Zealanders who have worked in Australia and returned to NZ after 55 years of age can access the superannuation they accrued in Australia (as well as the NZ Govt super from age 65):

My reading of this says that you can access your super along with everyone else once you are the right age:

"However, as a New Zealand citizen, you do not have access to these DASP arrangements. As you have the right to retire in Australia, you are treated in the same way as a permanent Australian resident when it comes to your superannuation.

This means that your superannuation money must be preserved in an Australian superannuation fund until you have met a condition of release such as:

Retirement after reaching your preservation age (55-60 depending on your date of birth);
Reaching age 65;
Death or terminal illness; or
Permanent incapacity"

Soon New Zealanders should also be able to transfer any superannuation they earn in Australia back to a kiwisaver account if they go home before retirement age:

May 28, 2012 @ 4:34pm
by TFraser

PeterC note that NZers can access super "like anyone else" when they retire. My point was that other temporary workers in Australia, on other visas, can take their super with them when they leave Australia. NZers can not.
And yes, after 10 years of living in Australia, a child born in Australia can apply for citizenship. Until that time they have no citizenship rights.

May 31, 2012 @ 8:03am
by mers

I must say, I find myself a little sceptical that the stats actually support all that doom & gloom.

First, & most importantly, the article only looks emigration. As Tony says, NZ has had a net loss in migration since Oct 2011 - and seven months of net migration loss does not an imminent societal collapse make. Even on the issue of skills, NZ, like Australia, attracts a lot of skilled migrants - so surely they will offset some of the loss? And what of all the tradies and so on attracted to Aus by the mining boom? Wouldn't they have affected the 'brain drain' narrative?

On the youth deficit "crisis", NZ migrants may be mostly young, and the Baby Boom may have been big, but the country's still one of only 4 in the OECD to have a birth rate higher than the replacement rate. If we were to see graphs like fig. 1 for most other developed countries, they would look much the same - only more so. In fact, NZ's old-age support ratio is healthier than the OECD average - and even healthier than Australia's.

And I'm with Azrael in not seeing how a labour shortage increases the price of living as a proportion of wages. But then, my economics knowledge is weak.

Would also like to see stats on the changed trend in NZers who return later (though loved the extract), and maybe even a comparison with Aussie expats.

As for Prof Birrel's small "immigrants stealing our jobs" insinuation - unemployment's at 5%. If the EU can (could?) cope with the free flow of labour, surely Australia can cope with this.

May 31, 2012 @ 10:35pm
by craig

no more kiwis here, Australia for Aussies only

June 7, 2012 @ 2:32am
by Mr. Chuck

Why not revisit the idea of a Union? Hard to see the sense in two independent countries that are not in essence all that different. They're nearly all over here in West Island anyway.

June 20, 2012 @ 3:38pm
by Peter

As an Australian who has just returned from living in NZ for 16 years, I would like to clarify some of the misconceptions, and myths this article and the respondents make. Firstly, during the whole time I lived in NZ 1995 - 2011, there was between 35,000 - 55,000 people leaving NZ each year. Mostly this is replaced by migrants from the pacific islands and asia.
Wages are lower in NZ and the cost of living is higher. New Zealand will continue to lose it's skilled and blue collar work force to Australia, and it will be replaced by less skilled or migrant workers, who wish to use NZ as an access point into Australia. NZ is currently paying the price for this migration loss in it's healthcare workforce - in 2009, more nurses who registered for the first time in NZ were train overseas. This trend will accelerate, as low wage growth (2%) and increased costs of living drive more kiwis here. On the up side, anyone who is looking to retire would do well to migrate to NZ, as your superannuation will go further there, and you will be entitled to the same level of healthcare as here.

July 11, 2012 @ 2:31pm
by Gabi

NZ will never become another state of Australia, but continue to be proud,we are the cream of the pacific and per capita we have more medal winners, award musicians, award actors, scientists that any other country in the world. We are the elite..I live in Oz but still have my NZ passport after 35 years. Australians are so patronising, with aour accent, sheep jokes etc. Many NZ'rs are headhunted to come here From a Proud kiwi

November 29, 2012 @ 12:28pm
by felicity
December 12, 2012 @ 2:28am
by jason

NZ should become a state of Australia. This would solve most of the probem's and the law's should be very simlar. When NZ was founded 100 years after Australia. The boats, investment and labour sailed from Sydney. Gerneration's latter we are all coming home. I think the NZ goverments should stop sticking it, to Australia.
Then we can also win the footy ever year to. Some school's in NZ played that 20 or 30 years ago.

December 30, 2012 @ 3:21pm
by Anne Non

Why is this article almost unalloyed negativity and scare-mongering.?There is an equally compelling narrative in this story, about the huge benefits to the basic human wealth and well being of emigrating kiwis. Where's that story?

The 'globalization' period of the 1990s saw huge benefits reaped by capital as it became hyper-mobile, leaping from country to country, to pick and choose from the most shafted labour force it could. That individual workers, people, families can in some small way exercise a counterveiling force, and vote with their feet in search of a livelihood, is only a good thing. That kiwis can move from 'economically anaemic' NZ into an Australian economy still very strong and with low unemployment by global standards is a win-win for both.

I appreciate the concerns about the NZ tax base if workers in their prime are departing. Where are the NZ programs to attract in new migrants (eg from the South Pacific) to fill the gap? But I have great skepticism about long term trends and flat line projections into the future. The GFC in Europe (and in particular, its impact in the UK) saw a sharp discontinuity in the inflow of people from eastern Europe coming to the UK to work.

January 11, 2013 @ 6:58pm
by shane watt

over a year and the only 3 comments are from bloody new zealander's. Well ,there are 225,000 here now Australia , lets keep taking it up the arse from them.

Its any wonder they call us 'dumb as sheep'

February 26, 2013 @ 2:44pm
by shane watt

TFraser thinks they have been welcome since when?

February 26, 2013 @ 2:47pm
by Michael J Cumming

Why do somany Austalians object to he number of asylum seekers coming o Australia. We have signed ageements with the United Nations to look after asylum seekers. We should welcome asylu seekers and let hem work.

Cut down he rediculus high number of New Zealanders that arive here.

May 19, 2013 @ 1:31pm
by Allan Donn

Can we obtain the figures for genuine Kiwis and "paper Kiwis" landing in Oz?

May 22, 2013 @ 2:49pm
by PG

Australia will see the results of massive immigration , especially the so called Asylum seekers ( most are really economic asylum seekers), who are in the main uneducated .
Have a look at countries which have had massive immigration decades before and the problems this has created , especially due to lack of integration , even in 3rd generation immigrants .
The agreements with the UN should be cancelled , the UN is an unelected , unaccountable organisation , whose errors have created many problems in this world , and who has become an ineffective due to internal policies .

July 19, 2013 @ 1:21pm
Show previous 24 comments
by Susan

New Zealand isn't hollowing out, there's just a steady flow of skilled immigrants from outside Australasia coming in. This will still be the case in twenty years. Where are the statistics on people entering New Zealand?

August 13, 2013 @ 5:51pm
by Robbo

New Zealand should become a state of Australia. With 12.5% of NZ population i.e. 77% working - (423,000 per 2009 census) and increasing by 53,000 a year; in Australia, its the Australian Dollar flowing back to New Zealand which props their economy up. We seem to be focused on economic refugees coming by boat. We need to be looking at this NZ issue which is a much greater threat and currently totally uncontrolled. Why are we subsidising the New Zealand economy and employment at the expense of our own. Pollies are tunnelled visioned. They need to look at all our borders in the national interest.

August 24, 2013 @ 3:19pm
by Luke

Nz was a part of NSW before in the 19th century. If NZ does not become a state of Australia again I will personally move there to live and farm thier fertile souls. I am an aboriginal Australian.

November 30, 2013 @ 12:44am
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