The inside story of why a torrent of Kiwis are heading across the ditch

Saturday, 26 October 2024

In 2024, the brain drain is becoming a torrent.

Kiwis are seeking their fortunes across the ditch in Australia in near-record numbers.

Quantifying the scale of the phenomenon is complex because of the various ways migration data is collected on both sides of the Tasman.

But what’s clear, regardless of which set of statistics you’re looking at, is that more New Zealanders are moving to Australia than in at least 10, possibly even 20, years.

First, the numbers

Statistics New Zealand estimated that in the year to March, 74,600 New Zealand citizens moved overseas. More than half of them – 39,600 (53%) – went to Australia.

A further 7300 non-New Zealand citizens migrated from New Zealand to Australia.

At the same time, 11,000 New Zealand citizens returned from Australia and 6000 non-New Zealand citizens moved from Australia to New Zealand.

That equated to a net loss of 29,900 people.

The annual average net trans-Tasman population loss (from New Zealand to Australia) was 30,000 between 2004 and 2013, but fell to just a tenth of that figure in 2014. This continued until 2019.

However, this year, the net loss is on track to eclipse even the record figures seen in the mid-to-late 2000s.

In just three months, from April to June, the net loss of New Zealanders to Australia already stood at more than half the previous year’s total, at 16,434.

This was the result of 21,703 New Zealand citizens moving to Australia, and 5269 Kiwis crossing the Tasman in the opposite direction, permanently.

And it isn’t just New Zealanders bound for Australia who have been leaving in droves.

The trans-Tasman brain drain has been happening against the back drop of a corresponding mass exodus of New Zealand migrants to other countries.

The latest provisional migration estimates, from Statistics New Zealand, from August, showed a record number of migrants, 134,300, left Aotearoa, while 188,100 new migrants arrived. That meant the net gain was 53,800.

What’s in a move? A $20,000 pay rise

But who exactly are the New Zealanders who’ve left the apparent land of milk and honey for the so-called Lucky Country?

We don’t really know. Neither the New Zealand nor Australian government is keeping tabs on the situation.

One of those crossing the ditch is Holly Greenwood, 28, who could sense the struggle in New Zealand’s job market before even looking, so she packed up and headed off to Brisbane in March.

Greenwood works in IT recruitment.In Australia, Greenwood could see there was a better economy, and room for her to “hone my craft”.

Straight away, Greenwood was given a $20,000 base pay rise.Superannuation is “incredible” too, with Aussie’s 11.5% contribution making NZ’s 3% “look like a joke”.

She pays $340 a week to live in a two-bedroom, two-bathroom apartment with a pool in a suburb that she describes as Ponsonby’s equivalent.

And there are Queensland’s 50-cent transport fares and the $2 blueberries and strawberries.

“Blue skies every single day, the weather is incredible, you almost get used to it, and you take it for granted.”

Should we be concerned?

Seeing an “extraordinarily high” number of skilled people leaving should be a major policy and political concern, said Dr Paul Spoonley, sociologist and emeritus professor at Massey University.

However, he preferred the term “brain exchange” to the almost cliché “brain drain” because “what we tend to get is people approved to come and live in New Zealand, who actually have higher qualifications than the resident population”.

He used the IT and health sectors, in which migrants make up a high proportion of workers, as examples of this.

Principal economist at New Zealand Institute of Economic Research Peter Wilson, however, said the to-and-fro movement was overall brain negative for New Zealand.

“Economic migrants go to where they'll do better. Obviously that doesn't always pan out.

“Although we don't have a lot of data, there is some evidence that New Zealanders in Australia do earn more than the average Australian, and pay more tax than the average Australian.”

That suggested the best people were leaving; not those who couldn't get a job, but those chasing higher wages, better conditions, and a stronger economy, he said.

Zach Coventry is one of them. He is finishing up his engineering degree at the University of Canterbury before he takes off to Perth in February to work in the mines.

His first year out of uni will see him earning around $150,000, more than double what he could expect in New Zealand.

While originally Coventry had planned to do engineering consultancy work in New Zealand, his goal to eventually go travelling and buy a house seemed more realistic on an Aussie pay slip.

“It’s kind of a no-brainer.”

Coventry’s biggest deciding factor was the advice from people who had done similar work in the past, and couldn't recommend it enough, he said.

He said he had been told the experience to be gained over there was of more value than that in New Zealand.

Digging into the detail

Prior to the scrapping of departure cards, in November 2018, Statistics New Zealand kept records of the occupations of people moving to and from Australia.

At that time, the data indicated New Zealand was shedding lawyers, IT professionals, nurses, midwives, farmers and teachers to Australia.

Our gains were tradespeople in the horticultural and food industries, as well as a small number of CEOs, plumbers and electricians.

We don’t know what sectors have been most affected by the latest wave of Kiwi migration to Australia, because there are no current statistics.

However, data from the 2021 Australian Census sheds some light on what types of jobs are luring Kiwis to the dustier pastures of Australia.

While the occupation of the majority of New Zealand citizens who had lived in Australia less than a year before the Census was conducted was not recorded, around one in 10 of those who did specify what they did for work were working in business, human resource and marketing professionals.

Fields such as construction and manufacturing and sales were also popular with Kiwis who had recently moved to Australia, the statistics showed.

Interestingly, the 2023 New Zealand Census found that the proportion of New Zealanders working as labourers had fallen from 11% to 9% in the last five years.

The proportion of people with sales-related jobs also dropped – from 9% to 8%.

Why do they want to leave?

Gabby Quinn left for Australia last year as working life for a nurse in New Zealand was understaffed, and underpaid.

While the 25-year-old nurse says the working conditions aren’t much better in Australia, the paycheque is, which is enough to keep her over there.

Quinn, who grew up in Wellington, earned $35 an hour in her fourth year on the job. She now makes $62 an hour in the Gold Coast.

“The weather is constantly good, the lifestyle, people are always out and about doing things, everyone's nice, everyone's happy.”

She says that while the cost of living is lower, housing in the Gold Coast is more expensive but better because of the higher-quality homes.

Quinn said she would consider nursing in New Zealand again, but it is dependent on “whether they up the pay”.

And for any Kiwis considering the jump, Quinn says “do it” ‒ but secure a job first.

Karl Woodhead, immigration policy director at the Ministry of Business, Innovation and Employment, said that the biggest driving force of trans-Tasman immigration was “the relative unemployment rates (and therefore employment opportunities) between the two countries”.

Australia’s unemployment rate is currently lower than New Zealand’s.

We were also most likely seeing a “catch-up from the closed borders during the Covid years” in the statistics on Kiwis crossing the ditch, Woodhead said.

Adam Shapley, managing director for technology and technical at recruitment giant Hays Australia and New Zealand said that Kiwis were attracted to the larger job market, better pay, and greater opportunities in certain industries in Australia.

Construction and trades, healthcare and aged care, mining, IT and technology and transport and logistics were just a handful of examples of such sectors.

Post Primary Teachers' Association president Chris Abercrombie said teachers – even experienced ones – were leaving for Australia, where the salary for a senior teacher was around NZ$60,000 a year higher.

A sharp decline in teacher salaries relative to the New Zealand median wage had pushed people towards options other than teaching, or overseas.

New Zealand teachers were “bombarded” with approaches to work in Australia, Canada and the UK, Abercrombie said.

Peter Wilson, the NZIER economist, pinpointed a similar phenomenon in highly paid careers like law and charted accountancy as being targeted by international recruiters to contact Kiwi workers in the hopes of poaching them.

“The concern I've got is that this is being caused by New Zealand's low productivity. At the root of it all, you've got bright New Zealanders who have prospects overseas,” he said.

Where are they going?

Data also reveals where the Australian hotspots are among the Kiwi diaspora.

According to the Australian Bureau of Statistics, about a third of the 14,910 New Zealand citizens who crossed the ditch for good in the first three months of this year, by its count, settled in Queensland. The ABS and Statistics NZ figures are different because they measure migration slightly differently.

Just under 30%, 4600, made the state of Victoria their new home.

New South Wales and Western Australia were the third and fourth most popular states among Kiwi migrants, with 2900 and 2200 New Zealanders settling there respectively last year.

Over the same period, the ABS put the number of Kiwis returning from Australia at 3210. This meant Australia’s net migration gain was around 11,700 – the highest it had been in a single quarter for at least seven years.

The ABS also records migration by country of birth. By this measure, 15,340 New Zealanders moved to Australia during the 2022/2023 financial year.

That was the highest annual figure in a decade.

Who’s replacing the migrating Kiwis?

In contrast, “millions” from other parts of the world are keen to come to New Zealand for wages better than they could earn at home, Peter Wilson said.

The danger is that type of immigration can lock us into a low wage, low productivity economy, rather than innovating.

“We have a ready supply of immigrants who on average, are not as highly skilled and not as highly trained. In some parts of the health system … there's a global shortage of doctors and nurses that we're tapping into, but it would be nice if we could train and retain more local doctors and nurses.”

Wilson said the labour shortage hurt New Zealand when Covid closed the borders. At that time primary industries and hospitality suffered. Innovation was a solution, while the immigration settings were contributing to the problem.

“If you have a shortage of labour, then one of the responses is to innovate and to automate. So if you can't get cashiers to run your supermarkets, you put in the electronic cashiers … and that's a productivity boost, because one supervisor looks after those six or 10 checkouts.

“The immigration system can provide certainty around time-critical activities like planting, pruning and harvesting, which leads firms at the frontier to invest in productivity-improving machines and facilities. But it can also enable apple growers to hire low-paid RSE workers instead of investing in hoists and automated packhouses and cool stores.”

Statistics New Zealand data showed more than half of the 139,187 migrants who came to New Zealand during the last financial year (to June) settled in Auckland.

Of those 75,128 new Aucklanders, nearly half (32,684) were young adults, aged 20 to 34.

International immigration to other main centres – including Canterbury, Wellington and Waikato - was much lower. Those regions saw permanent arrival numbers of 13,610,10,994, and 10,512 respectively.

More information on the types of jobs new migrants are working in will be available in an upcoming data dump, expected next month, from the 2023 Census.

One way to encourage high productivity was to make paying high wages a condition of being able to hire migrant labour, Peter Wilson said, as high productivity business models would allow firms to pay higher wages, and still make a profit.

But the Government recently reversed the minimum wage requirement for Recognised Seasonal Employer (RSE) workers removing that for the first two years of employment.

That would encourage low-wage low productivity business models and increase the likelihood of worker exploitation, he said.

“[We are] moving away from the idea that economic prosperity comes from growing things and making things and selling them overseas, to a world where economic prosperity comes from coming up with ideas … having an idea in New Zealand, patenting it, getting it up to a certain level, and selling that to a company overseas that will take it to the next level.

“That's a bright future for New Zealand, and it does get over the size of distance issue. We've got to have the end of day, a highly productive country. We've got to embrace what that means and help the transition from low productivity to high productivity, instead of just doing agriculture and closing steel mills and the factories.”

Check out tomorrow’s Sunday Star-Times for a deeper dive into what people are earning, and how much their homes cost, in Australia. On Monday in The Post, part three: Is Australia really the land of opportunity?