Four thousand more leave NZ for Australia

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Four thousand more people left New Zealand to live permanently in Australia in 2010 than 2009, although the outflow remained well below levels seen in 2008 and 2007, figures released by Statistics New Zealand show.

The numbers come against the backdrop of an economy struggling to recover from a recession that ended in mid 2009, with the possibility now of entering a double-dip recession, after a 0.2 per cent fall in GDP in the September quarter last year.

Figures yesterday showed New Zealand's unemployment rate unexpectedly rose from 6.4 per cent in September to 6.8 per cent in the December quarter, indicating a labour market struggling to gain momentum.
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There were 36,830 people who left New Zealand to live permanently or long-term (PLT) across the Tasman in the last year, up from 32,755 in 2009 but down from 48,452 in 2008 and 41,634 in 2007.

The number of PLT departures was mitigated by 15,842 PLT arrivals from Australia in 2010, giving a net departures figure of 20,998 across the ditch during the year 2010. The net figure was up from 17,962 in 2009, and down from the peak of 35,395 in 2008 and 27,998 in 2007.

In both directions most migrants were New Zealand citizens, Statistics New Zealand said.

New Zealand had a net PLT migration gain of 10,451 in 2010 from all countries, down from 21,253 in 2009, but above 2008 and 2007 levels.

Net PLT migration in 2010 was also below the average annual net migration gain of 12,000 over the last 20 years, Stats NZ said.
In 2010, the highest net inflow of migrants was from India (6300), Stats NZ said.

"This surpassed the net inflow from the United Kingdom, which dropped from 9,100 in 2009 to 5,300 in 2010. Almost three quarters of migrants arriving from India had student visas," Stats NZ said.

Meanwhile, seasonally adjusted figures show a net inflow of 750 PLT migrants to New Zealand in the December month, up from 620 in November.

December inflow was just above the monthly average of 700 since February 2010, Stats NZ said.

Speaking after the release of the unemployment figures yesterday, Prime Minister John Key told New Zealanders not to lose confidence that 2011 will be a better year than 2010.

"What happened is that there was a lot of confidence in the early part of 2010, but once the financial crisis hit again with particularly the impact on Ireland and Greece, you started to see a position where confidence evaporated quite quickly," Key told media in Auckland.

"Again we come up to 2011 with confidence looking more perky again, and you've got to remember unemployment's a lagging indicator, not a leading indicator, so typically it tells you what has happened, not what's happening in the future," Key said.

"What we see is a lot more energy from the New Zealand corporate sector, we see them looking to employ more people, we're seeing an increasing number of jobs being advertised, we're seeing a reduction of people on the unemployment benefit from the high over Christmas. I think we shouldn't lose confidence," he said.

Labour's new empoloyment spokeswoman Jacina Ardern said the government needed to invest more in research and development, and in increasing individuals' skills to create more jobs in New Zealand and stop the exodus to Australia.

"I think that the exodus of New Zealanders across the ditch is indicative of the fact that in New Zealand we do have low wages and job opportunities at the moment, as indicated by unemployment figures, the job market is pretty poor," Ardern, who is also Labour's youth affairs spokeswoman, said after the Labour caucus reshuffle yesterday.

There was a two pronged approach in getting youth back into the labour market, Ardern said.

"Firstly there's the issue of job creation generally, and the government could be taking a much more active role in job creation.

That's about research and development, that's about ensuring that the things we're doing to stimulate the economy create jobs," she said.

"The second thing though is about individuals. Making sure that they've got the skills that are required to get into work, and that's probably where our focus need to be for young people currently."

Following the Canterbury earthquake in September 2010, PLT arrivals to the Canterbury region were up 3 per cent in December 2010, while PLT arrivals nationally were down 3 per cent from December 2009, Stats NZ said.

"Increases in 'natural and physical science professionals' (which include geologists and geophysicists) and 'bricklayers, carpenters, and joiners' contributed to the increase into Canterbury compared with December 2009. There was a 12 per cent increase in PLT departures from Canterbury in December 2010, similar to the national increase of 14 per cent," Stats NZ said.

ANZ economists had expected a seasonally adjusted net PLT inflow of approximately 600 in December, with the annual inflow expected to slow to around 10,000.

ASB economists had said the household sector had remained weak in recent months, partly due to weak migration inflows over 2010.

"The pace of annual net migration has slowed over the past year, reflecting a higher number of departures, particularly to Australia.

Meanwhile, the number of new arrivals has also been weak reflecting the slack in the NZ labour market," ASB economists said in their weekly overview on Monday.

"In the second half of 2010 net migration showed signs of stabilising at low levels, reflecting the recovery in the number of arrivals while the number of departures slows. We expect the recovering NZ labour market will encourage migrants into the country," they said.

"However, continued strong labour market demand in Australia indicates the upward trend in departures to Australia will remain. On balance, we expect the monthly pace of net inflows into NZ will remain subdued.

"Nonetheless, the inflows will underpin population growth in NZ and thus remove some downside risk to housing demand and retail spending growth," ASB economists said.

Westpac economists had said net departures across the Tasman would continue to weigh on migration.

ASB economist Jane Turner said the number of permanent departures appeared to be stabilising on a trend basis, particularly the numbers departing to Australia.

However Australia's labour market was likely to remain relatively attractive, across many different industries and skill levels, which would continue to underpin departures out of New Zealand.

"Over the past year, the relatively strong labour market in Australia has drawn an increasing number of New Zealanders across the Tasman.

The December quarter lift in the NZ unemployment rate highlights the divergence in labour market performance remains, and we are likely to see a steady stream of New Zealanders leaving to Australia for the time being," Turner said.

"Permanent arrivals appear to be also stabilising, although remain relatively subdued. In particular, the number of arrivals from the UK and US remains very low, reflecting weak state of the NZ labour market.

Nevertheless, while the overall state of the labour market remains weak, demand for skilled labour has started to lift and already firms are starting to confront shortages.

This may put a renewed focus for firms looking to fill this gap by recruiting from offshore over 2011," she said.

"The low level of migration contributes to slowing population growth, reducing demand for new housing construction.

Indeed, the recent weakness in net migration is likely to be a key driver of low building consent issuance to date," Turner said.

"The domestic economy remains very subdued, with low inflow of net migration contributing to slower growth. The RBNZ is likely to leave interest rates low and stimulatory until the NZ economic recovery has regained traction, and we continue to expect the OCR to remain unchanged until September 2011," she said.

- INTEREST.CO.NZ