(Bloomberg) -- In a world divided by wars and politics, New Zealand is seen as a safe haven, drawing record numbers of immigrants since the pandemic.
So why are New Zealanders themselves leaving for Australia in droves?
“We are paid so much better here,” said Connie Valdez Gamalinda, who moved with her husband and young daughter to Geelong, near Melbourne, from Porirua, near Wellington, earlier this year.
The early childhood worker earns A$11 ($7.20) an hour more and was offered a relocation package of around A$17,000. Her husband Alvin, who works in mental health support, saw his pay double.
“And it’s not only the pay, rental properties are so much cheaper here, even the utilities are so much cheaper compared to New Zealand,” said Valdez Gamalinda.
Some 44,534 New Zealanders, almost 1% of the nation’s population of 5 million, left to live in Australia in 2023. The net migration loss, which takes into account Australians moving to New Zealand, was 27,011 last year, an 85% increase on 2022 and the most since 2013.
The two economies have taken different paths as they navigate the post-pandemic cost-of-living crisis. While Australia’s central bank has focused on engineering a soft landing for its economy during the fight against inflation, New Zealand raised interest rates more aggressively, resulting in a double-dip recession that looks set to continue this year.
New Zealand’s unemployment rate rose to 4.6% in the second quarter. By comparison, Australia’s rose to 4.1% in June.
“We’ve got a very weak economy in New Zealand and there are a lot of opportunities in Australia and obviously pay is a real attraction for many Kiwis,” said Jarrod Kerr, chief economist at Kiwibank in Auckland. “It’s been quite a long hard road here over the last 18 months and it’s continuing.”
Average weekly earnings in Australia are A$1,888. That compares with NZ$1,586 in New Zealand, which is the equivalent of A$1,453. That means Kiwis on average could earn almost 30% more in Australia.
Australia has long been a popular destination for New Zealanders. It is just a three-hour flight across the Tasman Sea and there is no visa requirement for New Zealand citizens to start a job.
In the 1980s a flood of Kiwis to Australia prompted then-Prime Minister Robert Muldoon to quip that the New Zealanders leaving were raising the IQ of both countries.
Australia today is running aggressive recruitment campaigns to attract Kiwis to work in sectors like healthcare, early childhood education, police and prisons, tempting them with higher wages and relocation packages. As a result, Kiwis are helping to address Australia’s skills shortages while some essential services in New Zealand, like hospitals, have been left chronically understaffed.
Government spending cuts haven’t helped. Since taking office last year, New Zealand’s new center-right coalition has embarked on a job-cutting spree in an effort to rein in debt and return the budget to surplus.
There have been more than 6,300 public sector job losses since the government came to power in November, according to a rolling tally complied by public broadcaster Radio New Zealand.
Shannyn Bristowe, a third-year nursing student in Whakatane on New Zealand’s North Island, said the struggle to find a graduate job at a time of still-elevated inflation and high borrowing costs is pushing many in her situation to look abroad.
“Students are uncertain if they’re going to be able to get jobs, that’s our biggest concern,” she said. “The opportunities that are presented in Australia at the moment are very beneficial and really rewarding.”
Record Immigration
While inward migration reached a record 239,000 in the year through October 2023 — more than twice the 102,000 people who departed — those numbers don’t tell the full story, said Gareth Kiernan, director at think tank Infometrics.
In particular, the country is seeing an exodus of 25 to 44 year olds and those losses are not being mitigated by an inflow of similarly aged people from overseas, he said.
“We’re seeing quite a lot of focus from young people on cost-of-living pressures in New Zealand and particularly on the cost of housing,” Kiernan said. “Young people who aren’t tied into the housing market in New Zealand and maybe not particularly tied into the job market, they see opportunities in Australia and that’s proving to be a real draw card.”
Valdez Gamalinda, who is originally from the Philippines and lived in New Zealand for 15 years, doesn’t think her family will move back anytime soon.
“New Zealand has given us good opportunity but it’s not the same anymore,” she said. “We feel like everything else is going up but not wages, so we had to think of where we could live a better life.”