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Home / Business

Liam Dann: Australia's fortunes a big factor in arrivals wave

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
3 Jul, 2016 05:00 PM4 mins to read

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Australia's political fortunes should loom very large for us. Photo / Getty Images

Australia's political fortunes should loom very large for us. Photo / Getty Images

Liam Dann
Opinion by Liam Dann
Liam Dann, Business Editor at Large for New Zealand’s Herald, works as a writer, columnist, radio commentator and as a presenter and producer of videos and podcasts.
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If Australia's economy or political policies change radically then New Zealand's migration story will too.

New Zealand's migration story is possibly the biggest driver of our economic success right now.

On that basis Australia's political fortunes should loom very large for us.

Okay, after the rush of Britain's bipartisan political meltdown, I'm looking for reasons to care about the Australian election.

It's hard work.

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But it isn't hard to draw a link between Australia's economy and our current immigration boom.

New Zealand's net migration gain of 68,400 in the year to May 2016 was a nominal record dating back to at least 1860.

We've never, even in colonial times, gained so many new residents in a year. There have been much bigger percentage gains of course.

Even on that basis, the past year has been huge. Our per capita gain was nearly three times that of Britain where immigration proved the divisive issue in the Brexit vote.

While there is a lot of focus on Chinese home buyers, it is New Zealanders coming home (and not leaving) that has made the difference.

Compared to the May 2012 year, departures to Australia have a fallen from 48,000 to 20,000. Arrivals have spiked from 8800 to 16,800.

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We even had a net gain of 1700 Australian citizens.

The open borders have always made the lure of Australia our biggest immigration variable. And it is one that can swing sharply.

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New Zealand's economic history matches, with unnerving precision, the line chart for our net migration flow through the years.

An arrivals spike in the 1860s followed by a mass exodus - the boom and bust of the goldrush.

A huge wave of colonisation in the 1870s and an economic boom as Julius Vogel invested big in nation building. Then another collapse in numbers as the money ran out and the country goes into depression. Incredibly for a colonial nation, by 1890 New Zealand was experiencing net migration losses.

Refrigerated exports drove a revival in fortunes through to the Great Depression - give or take a blip for World War I.

The correlations go on. A big pick up through the post-war boom of the 1950s and early 60s. Then a surprise migration slump around 1968? No surprise really. New Zealand also had a short, sharp recession that year as wool prices slumped.

Arrivals spiked again before the beginning of a long and famous decline through the Muldoon years. With the oil shock and Britain joining the EU our economy tanked.

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Robert Muldoon's joke - that Kiwis leaving for Australia raised the IQ of both countries - was popular but really belied a reality where many young Kiwis didn't see a future in their own country.

For years they even let us turn up and sign on to the dole.

There was concern in the 1980s about Kiwis as "Bondi bludgers" living the easy life, surfing and partying on the back of the Aussie taxpayer.

The restrictions have tightened progressively.

The end of the mining boom, an economic slowdown and the inclusion of Kiwi residents in tough immigration laws that allow for detainment and deportation based on "bad character" tests have dramatically reversed the flow of transtasman migration.

When we look at the pressure on housing and infrastructure it is our relationship with Australia that we need to consider first.

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How long will this trend last? Is our relative economic success a driver? Or is migration driving our economic success?

If Australia's economy or political policies change radically then our migration story will too.

Australians have been panicking about immigrants and to some extent their loss has been our gain.

Migration-driven GDP growth through a period of commodity price downturn has been a timely break for our economy.

There are signs that it may have peaked. The data shows a slight drop in the past four months.

Regardless, this has been a truly historic migration boom that will shape the country for years to come.

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It has created social pressures which the Government is now struggling to catch up with.

We need to make clever infrastructure investment choices and keep working on the crazy housing market.

There are risks that high immigration disenfranchises those at the bottom of the social ladder.

We need to ensure we have social policy to protect people from losing out and turning their anger towards migrants. We need to remember the current surge is not driven just by the more highly visible arrivals of different culture and ethnicity.

It is being driven by New Zealand passport holders.

History tells us this wave will not last. And that when it passes it will have left this country richer and stronger.

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