New Zealanders Are Moving to Australia in Record Numbers. Can It Get Them Back?

Can I just grab a long black, please?

In Melbourne, the so -called coffee capital of the world, lawyer Sean Collier has found a new home.

Thank you so much.

The New Zealander moved to Australia in 2023.

I would say pretty much entirely for economic reasons.I was working as a lawyer in Auckland for about a year and a half, and I was essentially living at subsistence level, pretty much unable to save any money.Once you get paid, it would just be rent, groceries, gas.All the money's gone, essentially.Everyone's got like a different sort of version of events.But for me, at least, I basically doubled my income in less than a year.

And the cost of living went down.So the grass was very much greener.

Collier is part of a growing movement.About 41 ,000 New Zealanders moved to Australia in 2025, the highest level in 12 years, with more than half of those estimated to be between ages 20 and 39.And earlier this year, former Prime Minister Jacinda Ardern joined them.a move which made international headlines and shone a light on New Zealand's economy.

There's a bit of a view that our economy isn't performing quite as well as Australia's economy.Then you're feeding the narrative that people are starting to hear at dinner parties that, you know, all of our children are leaving, or the health care services are better, or some other kind of thing.

Like Ardern, John Key is also a former prime minister of New Zealand, and before that was global head of foreign exchange at Merrill Lynch.

The New Zealand economy is not as strong as we'd like it to be, and maybe not as strong as historically it has been, but it's not a story of universal lower growth.Actually, Auckland and Wellington, the main centres have been weaker, and largely weaker because of negative house prices.So that's had a big impact on construction and all sorts of activity related around housing, and the sort of negative wealth effect of people living in Auckland.And when you think Auckland is home to one and a half million people,of a population of about five million, it has quite a big impact.So yeah, that's been a bit negative, but the rest of the country have been very strong, actually.

Rural prices have been strong.So we're a big food producer, basically started life as Britain's little farm, and we continue to be that.We're very much a strong food producer, so that part of the country's been good.And there's lots of exciting things happening.Well, New Zealanders have always left for Australia, The question is whether they come home.Largely they do, but not always.

I mean, if you look at New Zealand, we're a home of say 5 million people now.half a million, maybe as many as a million New Zealanders live in Australia, so it's quite a few.We're a little bit like Canada is to the United States.In the end, the United States is a sort of magnet for talent out of Canada.Pay packets are higher, opportunities are greater.It's a little bit like that from New Zealand to Australia.

And every New Zealander has a free option, so you're free to go to Australia.It depends on the conditions of how you go, but you are free to go, so it's a very open labour market.And there's just no question that those jobs and opportunities are bigger, and the lifestyle is very similar.

But while New Zealanders have always sought the experience of living overseas, be it Australia, the U .K.or U .S., typically they would return home eventually to start a family and buy a house, often with more wealth and increased expertise from their time overseas.

I've always thought I would raise my kids in NZ.You know, I've always, like, when I moved here, the plan was to sort of get a bunch of money together and go home.And I've spoken to a lot of Kiwis over here, and that's very much their intention as well.To be honest, out of all the Kiwis I know that have moved here, I couldn't name more than three or four that have actually returned.So I think, I don't know, it's a pretty big issue.It's looking less and less realistic for me.

And it's showing up in the numbers.New Zealand's net citizen migration is at its lowest since official data began in 2001.In other words people are leaving like they always did.But now they're no longer coming back.

New Zealand has got a very big productivity problem in that its economy is just muddling through.

Gillian Tett is provost at King's College Cambridge.

There's a lot of self -inflicted wounds in New Zealand.not least, for example, the NIMBYism that prevents people from building enough houses to ensure that everyone could get access to a house cheaply and easily.So you're creating in New Zealand a real intergenerational inequality problem in that people who are inheriting assets are doing well, others aren't.So New Zealand has got a lot of problems, and that's one reason why you've got New Zealanders leaving at the moment.But in terms of trying to attract smart people and smart talent, that really is the big new game in town.

New Zealand's problem is not unique.Poland experienced a brain drain after joining the EU.Ireland did so in the wake of the great financial crisis.And Portugal is the latest in Europe.In all three examples citizens saw new opportunities for higher pay and better jobs elsewhere.But Tetz says the loss of intellectual capital isn't always a bad thing.

Is the flow of intellectual capital necessarily a zero -sum game?I saw a recent report that suggested actually both countries could benefit because people, when they go someplace else, maintain relations back with their home country.And there can be a flow of capital, of business across the boundaries.Can it be something that could benefit both countries?

One of the biggest mistakes people make is to regard intellectual capital as a zero -sum game and to assume they have to hang on to their brilliant minds at all costs and stop them from going around the world.That was a disastrous mistake, because history shows very clearly that to get innovation, you ideally need to have one or two things happening, ideally both at the same time.On the one hand, you need to have clusters of brilliant minds who can bump into each other, ideally from different disciplines, to create that kind of interdisciplinary collisions and creativity.But you also need to have some diversity and serendipity that allows people to bump into entirely different ideas in a way that enables them to be even more creative.But in terms of people moving around and spending of research time in different intellectual hubs and environments, it's absolutely crucial if you want to keep ideas flowing for the benefit of everyone and spark new ones.And it makes my blood boil when I see governments trying to shut the doors on people, whether it's the European Union, the UK, which have not yet implemented a youth mobility scheme.

That makes my heart break, frankly.The fact that it's become harder to move scientists back and forth across borders, or not just scientists, but social scientists and humanities scholars as well.But also what America's doing at the moment is not helpful in terms of sparking that extraordinary, if you like, you know, chemical mix of brilliant minds coming together.

A healthy flow of intellectual capital may be a good thing for a country but it needs to flow in both directions.Poland provides tax incentives and other support for citizens to return.Ireland's corporate tax rate attracted foreign direct investment to promote job growth.And Portugal is looking to stem its brain drain by offering tax exemptions for a worker's first decade of employment.

As politicians and I think even as business leaders we feel unclean about any kind of incentive to do something and so I mean for instance in my day I put up pretty big incentives for movies to be made that led to The Hobbits and so on.many other things happening at Avatar and you imagine the skills and technology and capacity that came off that.But it caused a massive outcry that we were essentially giving back some of the indirect tax that we got in the form of the subsidy because we didn't normally do that.But Ireland's done that, it's been quite prepared to do that.I mean Israel probably has incentives all over the show I'm guessing in the technology space.So I'm not arguing that we need to go back to a sort of stupid world where politicians allocate resources and the wrong outcomes come.

I'm just saying I just wonder whether we we sort of we let perfection get in the way of the possible.

During Key's time in office HSBC labeled New Zealand a rock star economy.praise that enhanced its global reputation and helped the country experience positive net migration with Australia for the first time in 24 years.

We had political stability.You know, I was starting to go through Australian prime ministers pretty rapidly.We'd had one myself.And by the end of it, that period of eight years in office, HSBC described us as a rock star economy.So people started saying, wow, there really are some great opportunities over in New Zealand.They started coming over.

So it's not an impossible thing to get.Sadly what you see is, in a lot of ways it's a good thing, but we have very much an integrated economy with Australia.So CER, Closer Economic Relations, is our free trade deal, and it's about the most comprehensive free trade deal you can get.Extremely comprehensive, so goods can travel either way, there are no conditions.basically investment can do the same.So one of the reasons why you see less Australians coming over is their investment comes into New Zealand, but then they stay in Australia and have someone running the operation here, but they domicile the operation in Australia.

So look, it's a challenge.There's no question about that.But then you've had isolated parts of the country, like if you look at say Queensland,it's had enormous connectivity with Australia, deemed to be kind of beautiful, the Aspen of the South.It's attracted an enormous number of migrants, both from the United States, United Kingdom, but Australia.And you are seeing positive net migration there.

So it's not every place, but it's certainly been hard as felt in Auckland where people have left, I think.

New Zealand's government has also introduced a range of measures including active investor visas for wealthy foreigners and tax incentives for investment.It's not yet driven the sort of economic opportunities to attract Kiwis back home.But for now he says New Zealand should lean into what it's known for.

It can be a little bit negative but.I don't know, I look at New Zealand and I say, OK, yeah, I understand all that, but we're 5 million people.We really are the last bus stop on the planet, but we're kind of a paradise as well.In a world where there's global insecurity, we seem like a really safe place.We are incredibly beautiful.I mean, there's a lot of things going for New Zealand.

So I'm kind of of the view to say, yeah, we need to acknowledge that the economy needs to be a bit stronger and create more opportunities.But let's not sort of panic that all is not fixable, at least in New Zealand, because I actually believe it is.

In terms of actually fixing these problems, I think, yeah, like, in a nutshell, we need to be looking at things that will actually attract young people back to the country.I think so many people have left now, it's not going to be good enough to just stop them leaving.We actually need to look at things that will bring people back.And for my generation, like the main problems are being able to afford property, being able to have kids, job stability, you know, AI is ruining job stability for a lot of people.So I think our government should be looking at ways to sort of guarantee that if you work hard and youZealand, you'll actually be able to have a good quality of life, which is not the current situation over there.