The Hollowing Out Of New Zealand
By Bernard LaganMay 24, 2012
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, 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.
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.
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.
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.
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.