Labour's Goff attacks exodus to Aust under National, blames global recession for record departures under Labour

Labour Party leader Phil Goff has attacked the National-led Government over the exodus of New Zealanders to Australia over the last two years, but defended even higher rates of Kiwis crossing the Tasman under the previous Labour government as being due to the global financial crisis.

Goff's comments drew a response from Prime Minister John Key, who said New Zealanders should weigh up higher house prices and inflation in Australia when thinking of moving across the Tasman. Key also reiterated that the current government was building the conditions for businesses to create more higher paid jobs in New Zealand.

In a now-regular media stand-up on Monday afternoon, Goff said the fact 6,000 people attended an Australian jobs expo in Auckland over the weekend showed the Government was failing in its pre-election promise to stem the flow of Kiwis crossing the Tasman.

Migration figures from Statistics New Zealand show 36,830 people left New Zealand to live permanently or long-term across the Tasman in 2010, up from 32,755 in 2009. However this was still well down from 48,452 in 2008 and 41,634 in 2007 under a Labour government which governed from 1999 until losing the November 2008 election. See the second tab on the chart below for the net annual exodus across the Tasman.

"I think the difference [between the numbers leaving under National and the previous Labour government] is that was at a point when our country was at the height of the global financial crisis and we were more intimately affected by that than National," Goff said.

"We're now meant to be recovering from that international downturn, yet the figures show exactly the opposite. The figures aren't going down, they're going up," he said.

'Due to low building consents' and Key 'promised to close the gap'

"It's negative for this reason: That we have the lowest level of housing starts in this country in 45 years. Our building industry has tanked. We're building half the new homes that we need to meet New Zealand demand. And when we recover from this recession, we're going to find a huge shortage of skilled labour, of materials - an industry that's not geared up to respond," Goff said.

He was "of course" not happy with the amount of people leaving New Zealand under the previous government, in which he was Trade Minister, "but it was at the height of a global financial crisis".

"This was at a time where our economy was trending down, the Aussies had managed to keep their economy out of recession. Now we should be in recovery, and this is further evidence that we're not," Goff said.

"The big issue at the last election from John Key was that he was going to close the gap [between New Zealand and Australia]. That gap has got wider. It's got wider in terms of lack of employment in this country, as against employment opportunities across the Tasman, it's got wider in terms of wages going up across the Tasman and most people being worse off because of John Key's tax switch," he said.

'Real policies' needed not 'gimmicks' like cycle ways

Labour would reverse the situation with plans to get growth for jobs and growth in New Zealand incomes.

"Not gimmicks like cycle ways and job summits, but real policies that will get our economy moving," Goff said.

"We've talked about research and development - making sure that we can get a clever economy. That's what will keep our children employed in our country. About raising skill levels, instead of one in four of our kids going out of school and into unemployment. About a monetary policy that'll work for this country unlike the present monetary policy," he said.

Those were the basis of building a strong, export oriented economy, rather than one based on speculation, Goff said.

Key responds

Meanwhile Prime Minister John Key defended his government’s policies in the wake of Goff’s claims.

“[Overall] net migration into New Zealand has been strong – plus over 10,000 people, so  we’re gaining more people than we’re losing to the world,” Key told media at his regular Monday afternoon press conference.

“Even in terms of those going to Australia, they were smaller numbers in 2009, and [in] 2010 there were about 21,000 people net went to Australia. But that’s still less than say [in] 2007, 2008 – it was roughly around about 28,000,” Key said.

“The fact that people go to an expo, well that’s explained partly by the fact that their unemployment rate is lower than ours. So it’s understandable,” he said.

“But from that point of view, if you look at Australia, it’s an easy market for people to go to – you don’t require a visa.”

Australia had also been the best performing economy in the developed world.

“So yes it’s doing well, but it’s been the best performing economy, so it’s natural that some New Zealanders will shift over there,” Key said.

“Obviously we are trying to change the economic picture to encourage more New Zealanders to stay. If you look at our tax changes, it’s done that,” he said.

Speaking from experience; 'It's to do with China buying Aussie iron ore'

Key also said New Zealanders should weigh up their options before heading overseas, and that he himself had experienced high living costs while living in Australia.

“House prices are significantly more expensive in Australia, inflation’s running at a higher rate in Australia, the top personal [tax] rate cuts in at 45% - [in] New Zealand it’s 33%,” Key said.

"I think you’ve got to weigh all of those different factors up. There’s a lot more costs living in Australia. I lived there in 2001 and it was quite an expensive environment to operate in,” he said.

He defended the net migration outflows under his watch, saying the government was creating the conditions for businesses to create more higher-paying jobs in New Zealand.

"If you look in 2009 it was a large reduction [in net migration to Australia from 2008], in 2010 we’re back to sort of the 20-year averages. The truth of it is the only time that net migration between New Zealand and Australia has been positive, in other words more people coming from Australia to New Zealand than the other way round, was when wages were higher in New Zealand than Australia," Key said.

"So if you want to close that tide of people going across the Tasman you have to lift after-tax wages in New Zealand. We’re doing, I think, quite a good at that, given the conditions we face," he said.

"If you look at the terms of trade, which are driving a lot of the underlying wage growth in Australia, in New Zealand it’s been up about 30% on the back of commodity prices, particularly in dairy and sheep and meat sectors. In Australia it’s been 80%, so they’ve been big beneficiaries of China buying a lot of iron ore."

(Updates with more Key responses, including second video of Key)