By David Hargreaves
It may seem utter madness to be raising the subject in the face of the recent enormous inbound migration figures - but watch out for talk fairly soon of an emerging brain drain again.
I think over the next couple of years the conversation is going to change markedly from what we've seen. And of course if there is a big switch in migration patterns, there's plenty of ramifications.
At the moment as a country we are looking to play catch up on infrastructure and particularly new housing based on recently rampant increases in population. What happens to this planning if the migration and population growth figures go into reverse?
As I say it may seem madness to be talking that way in the face of what's been very high levels of net migration, peaking fairly recently and for now continuing at high levels.
But these things are cyclical and they change faster than anybody tends to imagine.
I do recall when the migration numbers were seriously starting to move up in 2013 that economists and forecasters and the likes of the Reserve Bank were constantly under-estimating how fast the figures would grow and the sorts of levels they would reach.
Well, I reckon we are about to see things switch the other way.
The slackening of migration pressures is for a year or two going to be good. But there will be consequences if and when it really starts to gallop in the other direction - particularly if New Zealand citizens start voting with their feet again, as historically they have tended to do.
Against historical patterns, one surprisingly constant factor in the recent turbulent migration picture has been the stay-at-home mindset of Kiwis.
The low level of departures of New Zealand citizens, particularly to Australia, has been a significant factor in the net inbound migration figures hitting record annual highs of well in excess of 70,000.
A slight rise in the number of Kiwis now deciding to shift across the ditch has been noted.
But this is being talked about as a trickle, which at this stage it is. That the overall 'tide has now turned' is clear enough though. The extent to which that tide is turning is, when you dig under the surface, is much more so, and more suddenly, than is perhaps widely appreciated.
It's worth getting under the hood and digging through the figures.
Here's the overall picture (figures from Stats NZ's Infoshare) of New Zealand's net migration (actual figures) for the year to June going back to the start of the boom.
| Net migration June year | |
|---|---|
| 2012 | -3,191 |
| 2013 | 7,907 |
| 2014 | 38,338 |
| 2015 | 58,259 |
| 2016 | 69,090 |
| 2017 | 72,305 |
| 2018 | 64,995 |
Within that overall picture, this is what the Kiwis have been doing. This is the overall net migration picture regarding NZ citizens over the same period.
| Net NZ citizen migration June year | |
|---|---|
| 2012 | -39,507 |
| 2013 | -31,741 |
| 2014 | -12,058 |
| 2015 | -5,644 |
| 2016 | -3,139 |
| 2017 | -1,284 |
| 2018 | -1,770 |
I thought it was worth having a bit of a closer crunch at the recent numbers and had a look at Statistics New Zealand's quarterly seasonally-adjusted figures.
Generally I usually prefer to look at 'actual' figures but of course migration patterns are extremely, well, seasonal. And if you look back historically the Stats NZ seasonally-adjusted figures, which do aim to take that seasonality out, do provide a very meaningful indication of the overall trend and of emerging trends - perhaps before the actual figures really start to reflect such trends. Starting from last year, here's the recent trend for quarterly total migration as captured by Stats NZ's seasonally-adjusted figures.
| Seasonally-adjusted quarterly total net migration | |
|---|---|
| 2017Q1 | 18,320 |
| 2017Q2 | 18,170 |
| 2017Q3 | 16,360 |
| 2017Q4 | 17,170 |
| 2018Q1 | 16,490 |
| 2018Q2 | 14,900 |
It shows the figures dropping quite quickly from very high levels.
A key component of that has been the numbers of non-NZers now leaving. In fact in the June quarter, on a seasonally adjusted basis, the number of non-NZers leaving the country was at a record high. Here's figures again since the start of last year.
| Seasonally-adjusted non-NZ citizen departures | |
|---|---|
| 2017Q1 | 6,570 |
| 2017Q2 | 6,920 |
| 2017Q3 | 7,270 |
| 2017Q4 | 7,550 |
| 2018Q1 | 7,960 |
| 2018Q2 | 8,090 |
So, that shows some of the pressure is coming off from the migration of non-NZers, though the inbound figures have to this point remained at high levels. But with more and more non-NZers now leaving and with various rules having been tightened, I think we can expect this trend to continue.
What about the recent pattern for NZ citizens though?
Here's the net migration information for the same period.
| Seasonally-adjusted NZ citizen net migration | |
|---|---|
| 2017Q1 | -180 |
| 2017Q2 | -410 |
| 2017Q3 | -490 |
| 2017Q4 | 40 |
| 2018Q1 | -260 |
| 2018Q2 | -1,110 |
Okay, that's quite a big jump at the end there, basically a more than four-fold increase in the net loss of Kiwis between the first and second quarters of this year - and remember these figures are adjusted to take out seasonal factors.
Next step, and it's the revealing one, is to look at the NZ citizen's net migration patterns with Australia over the same period.
| Seasonally-adjusted NZ citizen net migration with Australia | |
|---|---|
| 2017Q1 | -1,180 |
| 2017Q2 | -1,380 |
| 2017Q3 | -1,510 |
| 2017Q4 | -1,090 |
| 2018Q1 | -1,270 |
| 2018Q2 | -2,000 |
That's a 57.5% spike in the latest quarter, caused both by fewer Kiwis coming back from Aus and more going. And remember again this is seasonally adjusted, so, it's showing the trend without the normal seasonal migration patterns being reflected.
Now, yes, those figures are small when looked at in a historical perspective. For example, In the 2011-12 period there were net losses of Kiwis to Australia of over 10,000 per quarter. Now that's a brain drain.
But if you imagine we are light years away from seeing those sorts of figures, take a look at this example from the early 1980s. At the start of the period here the net loss of Kiwis to Australia was low - and see what happened. Here's the figures for a two-year period in that time.
| Seasonally-adjusted NZ citizen net migration with Australia | |
|---|---|
| 1983Q4 | -260 |
| 1984Q1 | -790 |
| 1984Q2 | -1,370 |
| 1984Q3 | -2,200 |
| 1984Q4 | -2,850 |
| 1985Q1 | -4,090 |
| 1985Q2 | -5,130 |
| 1985Q3 | -5,460 |
| 1985Q4 | -5,750 |
Yes, so basically that was an over 2000% increase in the rate of net loss of Kiwis to Australia in that two year period.
And while that's the most spectacular example of the way the tide moves, it's not completely untypical of the kinds of trends that have been seen historically. Generally the turnaround is very quick. It's the snow ball effect. Once some Kiwis decide to go, so a lot decide to go. "I've had it, I'm going." "Yeah, me too."
I think all the evidence is there that we might be about to see something similar. Now there will be questions about whether it's now as easy for NZers to go to Austrailia. Will the Australian economy improve from here? What about the fact that there has been large scale migration into Australia from other countries?
So, because something has happened before doesn't mean it will happen again. But having said that, I reckon now it will.
A sour mood
The mood of New Zealand has soured. You can argue maybe we are talking ourselves into some sort of downturn. But the fact is that the knee-jerk, toys-out-of-the-pram reaction of business to a Labour-led government has now turned into a fully-fledged downswing in confidence levels that must have an impact on economic activity in the near term. People get down, they get nervous, they get uncertain, they put off investment decisions, they put off employment decisions.
It can become self-fulfilling and I think it is becoming so. And with frustration mounting about pay levels in this country and the fact the housing market is now flat, well, conditions are ripe for an exit in numbers.
I thought the reported comments of former Prime Minister John Key this week were extraordinary and the nearest thing I've seen to an explicit, if you will, manifesto or modus operandi, of the previous National Government - the thinking and the policy.
Specifically Key said: "..."it was a significant increase in migration, a very strong housing market, a lot of confidence running around in the business community, what was very low interest rates, and over time globally a capacity for governments to spend a lot of money."
But now, however: "...Most of those factors that drove that very strong economy are either being taken off the table or are reducing. That's the right of the Government. I'm not criticising that, I'm just simply saying that if you want to continue to stimulate the New Zealand economy the question is what replaces those factors and that's the question the Government ultimately needs to answer."
So, there we have it. The way to make the New Zealand economy tick is apparently to pump up inflation (which by the way helps to keep wages down) and watch house prices go up. Remove those things and what do we replace them with and what happens next?
Now the tide's changed on migration and the housing market is no longer giving everybody the feelgood factor lift.
I mean sure, on an external level, people go tut tut when house prices are shooting up - but internally, if they own a house, it's 'yippee'. And why not. It's the biggest asset for most people.
So, anyway, all the ingredients are suddenly being put in place for an outbreak of national grumpiness, which will see the brain drain become an issue again.
A test for the Government
And that's going to have all sorts of implications for the Government.
Does it hold its nerve with infrastructure plans and with the KiwiBuild 100,000 houses plan?
Look, I think it should. But its nerve I would say is going to be tested.
The fact is though these migration trends are always cyclical. And if in the next year or two we do start pulling back on building plans then that will come back to bite us in future.
As I say though, this will require perhaps more nerve and commitment than has been seen in the past. We've paid a price for not sticking with house building during the post-GFC period and we would pay the price again.
The flip side is though that if KiwiBuild does continue full steam ahead and the Kiwi brain drain starts in earnest, well maybe we may yet see a significant downturn in house prices.
I haven't believed that till now, but now do see it as possible in the next three to five years.
It's all conjecture, but the one thing I would say is the situation we are in right now needs watching very closely. If what looks like the start of a serious migration outflow really catches it will happen quickly. And adjustments may need to be made.
93 Comments
I thought the reported comments of former Prime Minister John Key this week were extraordinary and the nearest thing I've seen to an explicit, if you will, manifesto or modus operandi, of the previous National Government - the thinking and the policy.
It's actually not much different to what is happening in Australia. The only difference is that the infrastructure pipeline in Oz is much wider and more fluid. Furthermore, property construction has been in full swing with most capital cities looking at a state of over-supply. If anyone couldn't identify National's MO, I feel that there's very little that they could identify. Key didn't release any great revelation. He just couldn't explicitly express it while he was PM.
I mean sure, on an external level, people go tut tut when house prices are shooting up - but internally, if they own a house, it's 'yippee'. And why not. It's the biggest asset for most people.
If you take away the self interest, nobody would be cheering for property bubbles. They're ultimately destructive and not always for the obvious reasons. Elevating people's sense of self worth might be good for the consumer economy, but there is nowhere on planet Earth where this has been sustained, even in the medium term. The idea that NZ and Australia are young democracies with the world at our feet potentially does add to the belief that we are really that different to the rest of the world.
I am seeing quite a few nurses going or planning to go to Australia from my hospital in Christchurch. Pay negotiations do not seem to have made much difference. Most of those leaving are the ones who do not own a home. I doubt flat lining house prices has much to do with nurses deciding to leave Christchurch. In fact if the price of new warm dry houses came down probably less nurses would go. Incomes versus cost of living is better in many parts of Australia. NZ needs to do better to make that equation more favourable to us.
P.S it was the down turn in Australias mining industry which affected migration to Australia numbers. Not anything Key/National did.
Exactly. I remember looking at the graphs of NZD/USD and AUD/USD and CAD/USD to see if the downturn in the NZD was due to the change of government and coming to the conclusion that it had nothing to do with it as they all traveled down together, as they usually do. So more likely the slowdown is due to less capital flight from China, not the drama of our politics.
Your point about the lack of affordability of housing being a real issue in keeping our best and brightest is a really important one.
Traffic, congestion and housing problems born out of lagging infrastructure aren’t limited to NZ cities; these are global phenomena in cities witnessing high economic growth.
That being said, a highly skilled individual would be better off making a six-figure salary in a tier-2 American city or in Sydney and see greater career growth than face the downsides of living in a growing population centre like Auckland but for a lower pay and slower career growth here.
Who can blame them. For all their insincere "understanding" and comforting words this government has absolutely screwed them: once again. When will they ever learn? They are too wedded to caring and emotionally vulnerable to make a determined stand for themselves. The government has plenty of money for a bunch of other comparatively low priority expenditure.
$900 million on a handful of extra over indulged diplomats
$1 billion on a regional slush fund
$1.6 billion for 4 new aircraft for the airforce
$? for the racing(gambling) industry.
Watch the government take a much softer line with the teachers and increase their already higher offer to them.
Hi Chris-M
I agree with three out of the four examples you quote BUT not the fourth one $? for the racing (gambling) industry.
Gambling has nothing to do with it.
Successive Govt have been taxing the industry for years and putting nothing back into the industry. Taxing turnover not profit.
The Racing industry employs approx 40,000 people who all pay tax, GST etc. and the Govt has put nothing back.
The industry does not want Subsidies it wants recognition for the benefits that it provides to the Country's Economy.
At the moment people in the industry are producing a product that a lot of other people are making an income off.
Time for a fair Go. If a person makes an investment in an industry they do so expecting to get a return.
Like a lot of other industries in this Country they are being force to take their products off shore.
The only people who look upon the racing Industry as a rich man's hobby are those who don't want to put their hand into their pockets to pay ther fair share.
I suspect David's right. I know two people in my immediate work area heading to Aus - one next week and the other intending to go in October. Both are raving about how much better the wages are and how much cheaper it is over the ditch and how much easier the living is there. As the disparity grows I suspect the trickle really could turn into a tide.
Agreed. Have lost two very skilled people at work in the last 3 months because of the stupid house prices in Akl and Tauranga. Both getting paid good six figures but house/income options in Brisbane and Perth and so much better than anything in NZ. Both had sizable deposits in the bank and unfortunately for NZ, easily transferable skills.
We lost a couple of good Indian migrants who worked as data scientists to a smaller Melbourne firm back in April and all the CVs from potential replacements till date have come in from the subcontinent as well.
Seems like we are a training school for Asians who eventually move on to better things than what we have to offer.
Ooh that's salty.
NZ is already ranked #1 by the world bank's ease of doing business index, how anyone can suggest businesses have it hard here is beyond me. Union memberships are at all time lows and the IMF recently attributed weakening industrial relations laws to a rise of inequality.
Forfeiting civil rights in the name of growth is not exactly going to make our country more attractive to the intelligentsia of the world either.
Stuart,
Thank you for a post which combines commonsense, with social justice. There are a number of contributors like Foyle who just want the market to be the sole arbiter of success and failure. Those who have no market leverage are to blame for their own misfortune and deserve nothing from society. They believe in 'trickle-down' economics-let the poor catch the breadcrumbs from the tables of the better-off. What miserable,mean-spirited people they are.
My gut feeling (not very scientific I know) is that starting in January the 'brain drain' will be back. After all people migrate for housing, food and opportunity.
Housing quality here is very poor and not fit for the climate. The cost of living in NZ is excessive and many households struggle to put food on the table. There is opportunity in NZ, however most of this opportunity is only available to established/rich households.
On Checkpoint with John Campbell last night, a young apprentice builder spoke out. He said; often building apprentices are paid minimum wage and expected to provide their own work vehicle, fuel, ACC levies and tools down to replacement knife blades. He said; as such many of his mates who 'showed lots of promise' had been forced to give up on building.
Try running a gardening business when forced to live in a unit. Try expanding an IT business in a country where libraries serve up coding books 10-15 years out of date. Try building strong communities when people move suburbs every year ..
Many people with children, criminal records and large debts to the NZ government are stuck here. However, I know many people who are saving for Australia and some who have already made the move.
New Zealand doesn't work for everybody. If you're single, have no children and plan to stay that way - WAKE UP~!! You my friend are a MUG. You're subsidizing EVERYONE; the elderly, working for families, housing speculators, beneficiaries, etc, etc and in exchange get to spend the majority of your wages on rent and fuel.
This is all obvious, so yeah, of course people who see these realities will leave - unless they're benefiting from this current state of the nation, or forced to stay.
New Zealand is working for less and less young people.
I agree with every word you wrote except for the libraries. The latest books are purchased but borrowed; the old books do hang around but are still useful if you have old software on your home PC. Auckland has great libraries. That and the plantings in the Wintergardens are the only council activities I find easy to praise.
Just a thought about the current slow down in immigration, the possible future and the relevance to house prices in NZ.
2015 - 58,259 eligible to leave for Aus from 2017 (NZ housing prices start to slow at end of 2017)
2016 - 69,090 eligible to leave for Aus from 2018 (NZ market now showing clear signs of correcting down)
2017 - 72,305 eligible to leave for Aus from 2019 (NZ market in freefall)
2018 - 64,995 eligible to leave for Aus from 2020 (NZ market still falling and no one knows how far the bottom will be, but the Aussie market has now reached its floor)
NB the NZ dollar was weaker relative to other currencies in 2015, 2016 and while it has weakened a bit of late it is still far less attractive today to shift funds to than it was when we were receiving our immigration injection from Mr Key.
Just a thought, that's all.
This could get really fruity if NZ has just been a back door to Oz, maybe they will find people for all those apartments blocks.... doesn't look good for NZ though.
Nic, I don't understand your YYYY - NNNN eligible to leave for Aus from XXXX narrative
2015 - 58,259 eligible to leave for Aus from 2017
2016 - 69,090 eligible to leave for Aus from 2018
2017 - 72,305 eligible to leave for Aus from 2019
2018 - 64,995 eligible to leave for Aus from 2020
what eligibility we talk about here ? and what are the XXXX and YYYY years mean in those lines ?
NZ will always have high emigration. Native Kiwis have an OE culture. Many Kiwis were not born here so have less patriotic attachment than say 3rd generation Kiwis and they often retain links with their country of origin. There is no language barrier. But maybe most significant is the ease to live and work in Australia even if with minimal qualifications or work experience.
High emigration is OK if there is an equivalent number of Kiwis returning home; they would tend to return for quality of life (no snakes, clean air, clean water, plenty of green space, good schools).
The significant issue is the quality of who leaves and who arrives. My fear is NZ has substantial low-wage immigration which is leading to endless corruption and worker exploitation and quite simply a kick in the face for low wage and unemployed Kiwis. Replace every immigrant checkout operator, fast food server, Uber driver with a surgeon, university lecturer, experienced engineer and number would remain the same but the rorts would be eliminated and fear of a brain drain diminish.
It is significant that INZ do not publish stats about the IRD returns for immigrants; they fear the median immigrant is earning below the national median wage. Since most live in Auckland they ought to be way above.
Sorry Greg. I should have been clearer. Two years in NZ buys residency in NZ with a back door entry to Oz. I was just highlighting the numbers that could use NZ’s generosity on visa’s as an easier ticket to Oz than going direct. If it happens it’ll be interesting to see if the Aussies allow our freedoms to continue. If I were a younger and wanted to give myself a start in life then a migrant who hadn’t developed roots in NZ would be silly not to consider the benefits. The earlier years of our population influx are now becoming eligible to go... that’s all. Would it take pressure off housing (at the margins of there being too many people for the rental market) if they did move in big numbers, then yes demand would be massively reduced.
The additional requirements are designed only to filter out the unskilled NZ citizens of questionable character.
As it gets harder for accountants and IT workers from Asia to migrate and settle in Australia with tougher visa and PR requirements, the more attractive NZ workers appear to Aussie employers.
Moreover, those NZers who qualify as high skilled workers in Australia have a relatively easy pathway to citizenship. I mean why wouldn’t they given that they are highly trained by NZ employers.
Any migration (unless a forced mass exodus) does not reflect a cross section of a society.
Sadly, any migration such as from NZ to Australia, is going to be those with initiative and as is typically those with skills rather than unskilled. A loss of our better and brightest.
@ Mrs The Point
You suit your name as you did Miss The Point. The Kiwi's on the GC you consider "trash" probably moved to Australia because of attitudes like yours. The girls and guys on the GC are employed, tax payers and contribute to the velocity of money in the Gold Coast economy.
Kiwis who move to Australia are not entitled to unemployment benefits and are known to be hard workers. Many of the Kiwis deported back to NZ (501's I believe they're called) are now working in the Auckland building sector - often they are the ones running the show.
I hope more young Kiwis make the move. Attitudes and treatment in NZ towards the young is sickening.
Mrs The Point
I have a far better perception of young people than that portrayed on NON-reality shows such as GC.
It is sensationalising so called "reality" shows which are not the best and brightest on our TV attracting only the thickest of viewers; so no, and it appears unlike you, I don't really watch GC, MAFS, Bachelor etc.
MTP, take care you don't develop stereotypical prejudices based on such rubbish.
I see the brain drain occurring each time a national govt leaves office. They seem to be adept at 'convincing' everyone that times are good then when a Labor govt enters office the smoke and mirrors leaves with the previous govt and discontent at reality sets in and migration kicks off again....
"many"=civil servants, and those not connected to productive industries. The spenders rather than the producers.
Since the 1960's Labour has left NZ in recession every time they have been in power, so of course they spark a brain drain. Incredibly expensive to NZ when each go-getter kiwi represents about $1million in tax over their lifetime. And with international travel and communications so much easier now the shift to drain is bigger and faster when it does happen.
You're talking about Rogernomics, not the current Labour party and you do realise Rogernomics is being continued into the 21st century by the current National party, right?
Labour were split over that and the new Labour party formed in 1989 as a result. They couldn't be more detached from Rogernomics. Rogernomics was also a big part of the reason for National's in-fighting at the time Winston left the party.
People's perceptions could be altered by a change of government. An upbeat government touting a "Rock Star" economy, promoting business and largely ignoring inequality would be more appealing to those susceptible to being part of the brain drain.
A hand wringing government, focusing on fixing all social problems, declaring that things are a crisis and hell bent on throwing your money away would encourage the brainy to consider emigrating, especially in a globalizing world.
I have leftie governments to thank for my comfortable financial position in that every time I thought about repatriating when they were in power it was ‘yeah nah’ and I salted away more $ for my family’s future. Now I have to look over my shoulder every moment to make sure they’re not trying to take it off me. How those that stayed home during those years got ahead is a mystery.
Perceptions are often more important than the reality, unfortunately.
I see the two belligerants in our current political climate being New Zealanders represented by a coalition, versus National representing a nebulous foreign economic hegemony, and some lesser-educated folk who like the colour blue and rugby.
Before you go, consider https://www.bbc.co.uk/news/world-australia-45043299
Latest information on Overseas investment amendment bill
National shows that they stand with wealthy foreign buyers instead of New Zealanders.
http://www.scoop.co.nz/stories/PA1808/S00018/national-shows-its-true-co…
Yeah wasn't it obvious how all National can do is sell off NZ to the highest bidder. Remember they did that for nine years and now look at the mess we're in!
Article: John Key's secret flag donor luncheon
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11619417
"Prime Minister John Key was the star guest at a private fundraising lunch for the Change the Flag lobby group in a last-ditch bid to raise cash from wealthy Chinese donors who supported a flag change".
https://www.stuff.co.nz/national/politics/70872711/prime-minister-john-…
A new flag is "gonna be worth billions" to New Zealand, Prime Minister John Key says.
"People say it will cost $26 million, it will cost less than that," he said.
He argued that the flag would make New Zealand money in the long term.
"How much is it worth ultimately if we change our flag and people recognise and buy our products?
Our main product of course in his mind was our land and housing market.
So, have anyone heard of a FHB or an average NZ buyers of >$2.5M house ? .... In Queenstown or elsewhere? .. Who exactly is DP protecting? ... Are ordinary wage workers going to develop QT and build apartments for other workers ... etc ?
How many NZers can ( or Not) compete with o/seas investors > $2.5M?
the < 1% filthy rich as they are often called ? ...
SO, Why does Labour care so much about these now ? ... we were led to believe that they want them to crash and burn ... lol
DP is a nagging child who lost his toys and growing extremely jealous from those who have any ... he doesn't make any sense at all , just stirring the pot for any emotional crap to drive his ideological way and his rotten dreams!!
What’s the main reason do you think? No doubt there are multiple reasons but I suspect one of the main ones is dissatisfaction with the cost of living esp housing. With housing as unaffordable as it is the Auckland proposition just struggles to stack up anymore if you have transferable skills
Yeah, that and remuneration reasons. And it sometimes happens like with a workmate of mine. His daughter moved to Oz for work (CPA for a big four bank), she meet and married an Ozzie guy and had a kid. My workmate sold up and moved across last year to be closer to the grandkids, taking his job with him (Mechanical Design, all he needs is a phone, grunty laptop and internet connection). His son is now a qualified sparky not long out of his apprenticeship.. I give him <2 years before he jumps the ditch too.
It's pretty simple. NZ squeezes productive people. We get none of National or Labour's goodies. And stuff is expensive! I've heard of NZ wines being cheaper in New York than our local supermarkets. Highest interest rates in the world. The government continue to do nothing about the lack of competition everywhere.
There are only a few camps doing well:
1) Anyone making money off housing (landlords, tradesmen etc).
2) Business owners making $ off cheap immigrant labour.
3) Large families or single parent dysfunctional families hauling in heaps of family tax credits and benefits.
Anyone else gets taxed to death. 33% income, ACC levy, fuel taxes, GST, council rates. Then you get to spend what's left on either a huge mortgage on a house 1 hour away from work -or- a renting with all kinds of intrusions and uncertainty.
When the trickle becomes a flow the choice is easy. Food is expensive, flights to anywhere are expensive, housing is expensive. There better be something to balance all these negatives out. What is really left for them in NZ when all their friends have packed up and gone?
4) People who haven't been brainwashed by the consumerist marketing machine and are able to exert enough self control and imagination to live happily and healthily within their means in what is still mostly a very nice place to be.
Flying is expensive - don't fly, "there" is usually no happier than "here". Income tax annoys you, don't have so much income, you'll only waste it on rubbish. Interest rates are high, not sure, I don't have any debt. Food is expensive, yes but in general cheaper foods + a little effort can be the best for you. Wine is expensive, no it's too cheap, given the huge costs of dealing with the fallout from excessive alcohol consumption. Huge mortgage and hour away from work - don't own more house than you need, even better don't own a house at all, they are a liability. Either move closer to work, or work closer to home. No can't do all this at once but if you put effort into designing your life rather than worrying about what the Joneses are up to, in my experience it works out pretty well and you can be happy regardless of who is in the Beehive. Best wishes.
I'm one of those self controlled people. I grow my own veges. Very rarely buy alcohol and haven't been on an airplane in the last 5 years.
That's not the point though. You have admitted NZ is a total compromise. People can either live in NZ and just cut back on X, Y, Z. Just live in a small house 2 meters away from noisy neighbors. Just not bother heating the house and wear a jersey. Just eat cheap junk food. Or they can just live overseas, have X, Y, Z and still keep the same money in their pocket.
It's also difficult to "cut down" when NZ sucks at building small homes and also sucks at building transport. Thank our wonderful planning "experts".
It's not about keeping up with the Joneses it's about living standards. If you enjoy a frugal lifestyle that's great - but facts are facts your income will go a lot further overseas and you'll be able to retire earlier and be happier.
I wonder how the babyboomers view the risk of a brain drain now? When this last occurred there weren't quite the same volume of people about to hit retirement.
Increases in the dependency ratio a bit, which is already stretched and one of the reasons the last government were trying to pump the country full of people to pay for the boomies? Who'll pay the rent on the buy to let? Where will the buyers be when the babyboomers want to sell up? Next 5 years is going to be quite critical for policy makers.
The politicians will find ways around it.
Capital gains will continue to be a tax free and enabled by salary earners providing the tax base now or paying off the govt debt later.
Or failing that they'll just find ways to bring over more immigrant money. Seeing as the country is sliding down the all the rankings they'll have to offer quite a good deal to entice anyone here. Easy citizenship for chefs and their families.
I love NZ it will always be home but on just about any measure it can not compete with Australia and many other places overseas.
In the past it was a nice simple place to raise a family where it didn't matter that you had a modest income as most people were able to carve out a nice life for themselves and own a modest home. Now those modest homes are $1.5M and we are still earning $60k a year, eggs bene and a coffee will set you back $30, petrol costs $2.50 a litre with no other option but to drive, in peak hour traffic almost all the time with perpetual roadworks. Life has become a real grind.
Lots of Brits being sold the NZ dream for example end up going back when they experience the reality.
Yeah agree. Salaries are lower but if you could still afford a decent amount of living space Auckland stacked up a# a lifestyle choice compared to other destinations. But now, you don’t even get that. Without that key selling point Auckland really has tumbled down the list. Auckland has lost a lot of the things that made it appealing for families. There are a lot more “interest” factors like entertainment, theatre, restaurants, more diverse ethnic areas and groups, but basic liveability has seriously deteriorated. I think a key part of that deterioration has been the housing bubble. I think you can still get that type of experience in some regional centres but Auckland has seriously deteriorated for quality of life.
It's a mathematical certainty that if you are of average employability that you'll earn, on average, 25% more in Australia than you will in New Zealand. Hell, even Tasmania alone has a much better GDP per capita than New Zealand.
Then a basic comparison of Brisbane and Auckland using Numbeo produces the following summary:
Source: Numbeo
And I suspect that is probably a modest comparison based on a lifestyle in Brisbane that few would actually manage to afford in Auckland.
My family and I moved back from Perth to a NZ small region 3 years ago, from where I grew up, in order to expose my children to their culture. I am a NZ lawyer, and specialised in the Mining sector in Perth, through the boom period. I would manage contracts of up to $500 M, for some of the largest companies in the World. On the campsites I saw many of the Kiwi brothers, both Maori and Pakeha- and I can honestly say that there was a true comradery between the Kiwis. We would see each other, and say “Living the Dream”- many of the Kiwis are doing exceptionally over there- business owners, mining specialist- NZers are truly sought after and well respected over the ditch.
My experience in NZ was terrible. We have returned back to Perth. Wages as a lawyer was half of what I was getting in Perth (I have since walked into a role for $140k in Perth- much less responsibly and hours) and my phone is off the hook for job offers now that I am back. Food- if you go to the spud shed, our food cost for 6 people is $180 per week. For 5 people in NZ, our shopping was $380 at PacNSave. Petrol is 1.40 p/ltr. Our rent for a 6 bedroom with a pool (in a great area) is $500. In NZ, I was paying $430 in a terrible area for a 4 bedroom- cold and wet. To build- they have land and house packages for $300k – and they are much nicer than the houses that in NZ. My wife who is a professional and has her own business in Perth, could not even get a $15 per hour job without first getting a tertiary degree…You simply cannot get ahead in NZ.
The worst was the racism as a Maori – to my children, my wife and I…some of the stories I can tell you, would make you probably gasp in horror. In Perth I am a respected person, who is met with a real passion from people wanting to know more about my culture, and to hire me due to my work ethics. Pakeha NZers treat me as an equal.
I am telling everyone I know- get yourself over to Australia asap. NZ is very beautiful, and I miss the fishing, and me mates- but they way NZ is heading (ie: higest homelessness in the World, highest house prices in the World, Highest Drug use in the World, Highest Suicide Rates in the World for teens, Highest Poverty rates for Children in the World) you need to get over here, to get ahead.
Really sad to say, but it’s a reality.
Sad to hear about the racism.
I'm not sure why no government has ever attempted to do something about food prices. The commerce commission are all over petrol companies potentially ripping us off by a few cents, but duoploy supermarkets are never investigated.
The state of our housing is very poor. I honestly don't know why 99% of businesses in NZ have to take health and safety very seriously, yet landlords get away with renting out a substandard mouldy house which is making people sick. Being a landlord is a business and they should be forced to meet reasonable minimum standards. In my opinion that should include double glazing and full insulation. This should not be subsidised by the tax payer.
Would any other business get away with that? If a supermarket sold poisonous food could they just say it was too difficult not to?
Apparently half of middlemore hospital is full of kids that are sick from cold damp housing. So the tax payer is picking up the bill (as well as the children of course), yet the landlords have just made a killing in capital gains and not paid a cent in tax on it! The least they could do is spend a small percentage of their gains to bring their investment up to modern standards. But apparently they couldn't possibly do that without raising rents.
Hi Jimbo, thanks for the comment. I have to admit that the experiences when living in Auckland and Wellington, were not the same as the region that we stayed in for 3 years- still love the place, so I choose not to disclose! Absolutely agree- the people that I met that formally lived in Perth have either expressed their view to return, or have done so. I saw so much poverty in NZ- people that were on the bones of their arses- still getting the same wages/benefit of the 90s yet houses are no longer $60k...they are $600k!!! Food, clothing and housing all double than in Perth, yet half the wages. I tell all young people- come to Aust for a true, fair go.
J J,
That's not quite right. Yes,the banks and oil producers are overseas owned,as is Countdown,but New World/Pak n Save is NZ owned,as are the power companies and Spark.The government still owns 51% of mercury,Meridian and Genesis and NZ shareholders own a significant proportion of the rest.
Back to Perth,
That's a fascinating and dispiriting post. I am one of the lucky ones,having retired here from Scotland 15 years ago. I benefited from a much lower exchange rate against Sterling and have done very well from the stockmarket through higher dividends. I live in Mount Maunganui and enjoy the lifestyle. However,I have 4 young grandchildren and while they may well decide to travel the world,I want them to have the choice of making good lives here.
Making it partisan makes it all so simple. "Data from CoreLogic shows house prices grew 49 per cent from 1990 to 1999, under National-led governments.
Then, from 1999 to 2008, prices rose 113 per cent under the last Labour-led government.
Through the most recent [National] government's term, there was 69 per cent growth in house prices nationwide."
https://www.stuff.co.nz/business/property/98475352/labour-governments-h…
"Since 2007, average annual household income is up just over $35,000 (50.5 percent), to reach $104,583 (before tax) in 2017. Over the same 10 years, average annual housing costs increased from $10,658 to $16,478 (up 54.6 percent), according to the latest household income and housing-cost statistics. Inflation, as measured by the consumers price index, increased 20.2 percent."
It merely shows that both parties WERE a total waste of space. It is time that voters start looking for better sources. Top is worth watching if our current government proves to be a failure. Two party systems merely provide the same old same old and that is empirically proven.
indeed I find it extraordinary that people are prattling on about nurses, teachers etc etc striking. The fundamentals of which are based on the fact that housing is unaffordable, they wouldn't need to strike if they could afford the basics - a roof over their head, but that apparently is completely unacceptable to the "get ahead, buy a rental" crowd.
100% agree. Two thing that will rebalance most issue it a massive housing reset, or a trippling of wages and the massive flow on impact to every good and service (hyper inflation). Specuvestors and banks obviously very anti the first option as can bee seen in the debt/tax offset/renter crowd posts.
Possibly the biggest and most important fork in the road in NZ history.
I make more money after tax working 3 days week in Aussie than full time plus overtime in NZ. That and I just filled the car up at $1.26 a litre, milk is $1 a litre, and I get 9.75% employer super contribution plus numerous other perks I did not get back home. Despite living in a remote area were mining production is fast ramping up again and young families are flocking into town for work there is an excess of housing supply. And I don't work in the mines either so I think I would broadly reflect the difference in standard of living between the two countries.
As someone who has returned from Oz and enjoyed NZ for the last 10 years, I am sad to see that for my 4 adult kids at least, NZ holds very little future. From my standpoint NZ has a huge underclass of minimum wage earners which is distorting or removing any opportunities for enhancement. Of my three daughters, the only one who is progressing is married to a police man who is bootstrapping his way up into detective - a tough path and I admire him for his tenacity. The older one's husband just got made redundant from Spark but basically endured an entry job for 7 years. They will either go to Oz or USA. The younger daughter left for Oz last week. She was living in Taranaki/NP area and paying $340 for a tiny 2 bedroom duplex, whereas in Brisbane the rent on a nice 3 bedroom there is about the same - and the added advantages in terms of climate and COL etc. Our son arrived back to NZ in May with a degree. Jobs are there but pretty much all at minimum wage. In his first (freight) he was surrounded by a bunch of meth users and had to watch for side effects. He hurried to his current role (retail) where he was lucky to escape a round of redundancies and is looking at a third job this week. He is struggling to find an open door where he can utilise his degree.
So for baby boomers who can cash up in Auckland and leave for the regions or elsewhere, good on ya. I'll probably end up following the kids in a short space of time, retirement can't come soon enough.
Agreed. The 'No Can Do' attitude of Kiwis has a lot to do with the lack of opportunity there. Achievers ask themselves why they're trying to fight the sludgy tide of endless negativity when instead they can relocate someplace where success is encouraged and celebrated and failure isn't.
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