A notable exodus from New Zealand to Australia‘s Gold Coast has underscored the nation’s current economic challenges. Corey Ngaru and Elian Lellimo, like many others, recently relocated, motivated by the prospect of enhanced employment opportunities and higher remuneration. Ngaru anticipates a threefold increase in his earnings as a builder in Australia, a stark contrast to the financial constraints experienced in New Zealand. This movement reflects a broader trend, with preliminary figures indicating a record-breaking departure of 128,700 individuals in 2024, from a population of 5.3 million. This surge in emigration coincides with New Zealand’s most severe economic downturn since 1991, excluding the pandemic period. Analysts attribute this decline to diminished productivity and inconsistent policy decisions, which were exacerbated by unreliable economic data. The nation is grappling with elevated unemployment rates, the most substantial annual decrease in employment since 2009, and a rapid increase in business failures. According to HSBC, New Zealand’s economic performance in the preceding year was the weakest among developed nations.
Conversely, Australia’s robust economy, characterized by near-record-low unemployment, has re-emerged as an attractive destination for New Zealand job seekers. The longstanding Trans-Tasman Travel Arrangement, in effect since 1973, allows unrestricted movement between the two countries for work and residence. Although migration patterns have fluctuated over time, the superior employment prospects in Australia, particularly in the mining and construction sectors, have consistently driven a net westward flow. Currently, over half a million New Zealand-born individuals reside in Australia. While New Zealand continues to experience net immigration, the figure has significantly decreased, from 128,300 in 2023 to 27,100 in 2024. The economic downturn in New Zealand has been attributed to a combination of factors, including the swift implementation of pandemic-related border closures and economic stimulus, which inadvertently fueled inflationary pressures and inflated housing prices. Consequently, the central bank implemented rapid interest rate hikes, while the government swiftly curtailed fiscal spending, precipitating a recession. Shamubeel Eaqub, chief economist at Simplicity, highlights the “double effect” of substantial stimulus followed by abrupt reversal, contrasting this with Australia’s more gradual approach to monetary policy.
The Reserve Bank of New Zealand’s policy decisions were further complicated by the timeliness and accuracy of official economic data. Recent revisions by Statistics New Zealand revealed that the economy’s performance in 2023 was stronger than initially reported, but also that the economic contraction in mid-2024 was more pronounced. Paul Conway, chief economist at the RBNZ, acknowledges the challenges posed by imperfect data. The government’s fiscal strategy, focused on reducing debt, has provided limited support to the struggling economy. Despite spending reductions, lower tax revenues have compelled the government to abandon its goal of achieving budget surpluses within the next five years.
The economic slowdown has exacerbated poverty, with charities reporting a significant increase in the number of individuals requiring welfare support. A recent report by the Salvation Army indicated that 400,000 people are reliant on welfare, the highest number since the 1990s. Food insecurity and homelessness have also risen. Murray Edridge, city missioner for Wellington City Mission, observes that living conditions are exceptionally challenging for many. While economic recovery may be underway, its benefits have yet to reach those most in need.
Both the Treasury and the central bank anticipate modest economic growth in the fourth quarter, as indicated by data due on March 20. Conway suggests that while some businesses may experience improvement, households are unlikely to see significant relief until the latter half of the year. New Zealand’s economic productivity remains below that of its peers, compounded by high residential property debt. The government is pursuing policies aimed at stimulating growth, including deregulation, support for mining, and investment in tourism. Finance Minister Nicola Willis has emphasized the urgency of addressing these economic challenges.
Despite their affection for New Zealand, Lellimo and Ngaru, like many others, have opted to seek financial stability in Australia. They intend to return to New Zealand in the future, but for the present, economic realities are compelling many New Zealanders to seek opportunities elsewhere.
