This morning’s Herald points readers to a Weekend Australian feature suggesting that New Zealand has become the place to be (“What has happened is that somewhere, somehow, perhaps in the dead of night when no one was looking, Australia and New Zealand have swapped sides”) and that thousands of Australians are flocking to New Zealand, for its better-performing economy (and government).
A couple of weeks ago, I highlighted this curious tendency in Australian commentary (especially that from the centre-right), which seemed quite detached from anything in the data. But, still, I wondered if I had missed something in the migration numbers.
Here is the chart of the monthly seasonally adjusted net flow from/to Australia, broken down between New Zealand citizens and others (the latter mostly Australians). And, sure enough, there has been a noticeable increase in the net inflow of Australians. That tends to happen whenever economic cycles are out of sync and temporarily in our favour.
But, even now, the inflow of (mostly) Australians is running at around 5000 per annum. And even in recent months, with the Australian labour market as tough as it has been for 25 years, that inflow is still outweighed by the net flow of New Zealand citizens to Australia.
Yes, the labour market is a bit easier in New Zealand at present than it is in Australia, although at 5.7% our unemployment rate is not something to be complacent about. But nothing has happened to even begin to reverse the decades-long widening in the now very large gap between New Zealand and Australian incomes and productivity. And favourable commentary from the other side of the Tasman will be a false friend if it distracts from the serious economic challenges that our own policymakers should be grappling with.