The NZ brain drain turns to a trickle

For decades, New Zealand has been a major exporter of people to Australia, a reflection of the relative economic performances of the Trans-Tasman neighbours and sometime rivals.

Jokes about Bondi bludgers and hand-wringing about brains draining from east to west have been a staple since the early 1980s. Then NZ Prime Minister Robert Muldoon famously quipped the exodus of Kiwis to Australia raised the intelligence levels of both countries.

"More New Zealanders are staying [home] but also more NZ citizens in Australia are returning home to a more buoyant economy."

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In net terms, over half a million people have migrated to Australia since the Muldoon era as Australia's wages galloped more than 30 per cent ahead of New Zealand's. Now that is changing - and in some surprising ways. 

The latest migration figures confirm record high net migration to New Zealand in the year to September of 45,400 or just over 1 per cent of the population. That's a massive turnaround from net outward migration of 3,280 just two years earlier. 

The biggest contributor was a turnaround in the migration flows to Australia. Net migration to Australia dropped to 5,986 in the year to September from 39,520 two years earlier. In the month of September, just a net 68 New Zealanders left to live in the 'lucky' country, down from 2,488 in the same month two years earlier. 

More New Zealanders are staying to help rebuild Christchurch and work on a building boom in Auckland but also more New Zealand citizens in Australia are returning home to a more buoyant economy.  

The number of Kiwis returning home has almost doubled to 15,083 in the year to September from two years earlier, while the number of citizens leaving for Australia has almost halved over the same period to 25,122. 

The contrast couldn't be more stark and it has proved a boon for Prime Minister John Key. One of his most effective campaign ads when he successfully bid for election in 2008 was staged in the Wellington Stadium, which has a capacity of 34,500. 

He gestured around the stadium in the ad to show how a capacity crowd left New Zealand to live in Australia each year and he argued he’d stop the drain. 

Last week, Key announced in his speech from the throne in Parliament to begin his third term his Government would hold a series of job fairs in Perth and Sydney in late November and in Melbourne and Brisbane in the first quarter of next year to recruit highly skilled New Zealanders home. 

Economic Development Minister Steven Joyce said construction, engineering and Information Technology workers would be targeted. 

"For many people Australia and New Zealand are becoming one labour market," Joyce said in announcing the job fairs. 

"We've donated lots of our people to work over there in the last 20 years. Now with our economy doing better, it's time to get more people moving back the other way." 

The turning of the tables in the labour market is also playing out in the respective tourism markets. 

New Zealanders are using the strength of their economy and the New Zealand dollar to pay for overseas holidays, mostly to Australia and often to the Gold Coast. About half of New Zealanders' 2.24 million trips overseas in the year to September were to Australia. 

The New Zealand dollar's rise to over 92 Australian cents for most of this year from 86 cents near the end of 2013 has helped make visits to sunnier and drier climes more attractive. 

New Zealanders' trips to Australia rose 8.5 per cent to 1.08 million in the year to September, growing much faster than the 3.4 per cent growth in visits from Australia to New Zealand over the same period. 

Many of those visits from Australia are actually New Zealanders who live there returning for a few days to visit family and friends. More than half a million of the 1.38 million visits to New Zealand by Australian residents are recorded as visits to family and friends. 

A few of them are likely to be scouting missions as New Zealanders resident in Australia look to jobs and homes to come back to. 

Now we wait for a repeat of the joke about this turning of the tables improving the intelligence and productivity on both sides of the Tasman.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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