Heading to Australia
The flow of Kiwis across the Tasman Sea for work has become the subject of frequent media and political comment. The flow is at one of its highest levels and a significant proportion of those going are young and qualified. The phrase ‘brain drain’ is appearing in the media often.
Peter Nicholl
One political response is that this has happened before and the flow will slow down and possibly even reverse when the New Zealand economy starts to grow again. The first statement is correct – this has happened before. But I don’t think the second statement is correct this time. The differences between conditions for young people in Australia are now numerous, substantial and, without policy changes in New Zealand , are likely to be permanent.
The first significant difference is salary levels. In dollar terms, salary levels are higher there than here. I know one young man from Cambridge who was earning $25 an hour here. He went to Australia last year and was immediately earning $40 Australian for the same job. Australian companies are advertising for our newly-qualified nurses and teachers and the starting salaries offered are substantially higher than here. Also, even though we are short of nurses and teachers here, many of these new graduates can’t get jobs here.
These salary differences are now much more attractive because of a substantial decline in the exchange rate. Last July 2025 our dolloar was worth 92.7c Australian – it is now 83c – a change
The Australian income tax system is also more favourable for people on low incomes. New Zealand is one of the few countries that taxes income from the first dollar earned.
In Australia, the first $18,200 of income is exempt from income tax. So current economic conditions for young people are much more favourable in Australia than here.
But the biggest change that could make the lure to young Kiwis enduring is that future opportunities look better in Australia too. New Zealand’s per capita growth has stagnated at a pathetic 0.5% a year since 2008 – a period of nearly 20 years. One thing that has driven our periods of economic growth in the past has been strong prices overseas for our main export products. We are in a period of strong overseas prices right now – but this time our domestic economic growth has so far not responded in the usual way.
Many young New Zealanders also believe they will have more chance to own their own house in Australia than here. This is one of the major negative consequences of the housing price boom in New Zealand a few years ago.
Older Kiwis like me know that New Zealand is sliding rapidly down the global wealth ladder but it is still a nice, comfortable and safe place for us to live – and our earning days are largely over so we stay here.
Young Kiwis see the same thing but are responding quite differently. Their earning days are just starting and Australia’s economic advantages have become too big for them to ignore.
Flag of Australia. Photo: Hugo Heimendinger, pexels.com
