Covid-19: The exodus after the borders open - MBIE estimates 50,000 Kiwis will leave

Government officials have estimated 50,000 New Zealanders will leave the country over the next year to head off on an OE or for work as the borders reopen after two years of Covid-19 restricting travel.

The estimate was included in a February paper to Immigration Minister Kris Faafoi from the Ministry of Business, Innovation and Employment.

It estimated that at the very most up to 125,000 New Zealanders could leave in the next year, although it was likely to be less and its "ballpark estimate" was 50,000.

However, that could be higher if demand for the traditional OE (overseas experience) resulted in an exodus – about 120,000 young people had missed out on heading off on an OE over the Covid-19 period. It could also be lower if people were still concerned about Covid-19 uncertainty.

MBIE noted it did not expect three years' worth of emigrants to head off all at once, suggesting concerns about getting "stuck overseas" while Covid-19 was still an issue could dampen demand.

It was also likely other countries would now start recruiting for New Zealand workers again, especially Australia.

It noted wages had historically been higher in other countries, but the strong labour market in New Zealand could help keep people here.

The paper said that the upper limit for "emigration risk" was 2.5 per cent of the population. That was 125,000, of which 100,000 would be working age, leaving in one year.

"The immediate risk of workforce loss through New Zealand citizens emigrating is significant, but containable to the extent that emigration loss is offset by other channels of labour supply."

Act leader David Seymour said the cost of living and wage gap in New Zealand would do little to keep people here.

"Labour's chickens have come home to roost. By locking the economy down and borrowing $50 billion they have left us with a mountain of debt and rising prices. Kiwis are finding it difficult to make ends meet and are heading offshore for a better chance of getting ahead in life.

"Rents are up, mortgage rates are on the rise, the cost of food is up, petrol is up, but wages aren't keeping up. What is Labour doing to make this a more attractive country for young New Zealanders?"

In Parliament, Prime Minister Jacinda Ardern said it had always been the case that a lot of New Zealanders left and returned in any year – and forecasts were for a net migration increase over the next few years.

Immigration Minister Kris Faafoi said New Zealanders had always been keen to travel overseas, but the opening of the borders now meant more could also come home easily.

"We just need to make sure we are attracting people back as well. This is not just in one direction."

He also expected New Zealand to remain an attractive place for migrants to come and work in and a new visa process would make that easier for skilled migrants earning at least the median wage.

The departure of 50,000 people would be about the same numbers as before Covid-19 – about 40,000 left each year between 2015 and 2019. At its peak in 2012, 70,000 left. Of those, up to 60 per cent were believed to be young people heading off on their OE.

However, those leaving were offset by migrants moving to New Zealand and MBIE pointed to the risk that would take some time to happen to build up again.

While New Zealand has historically had high rates of people leaving, the report noted that any exodus could worsen labour shortages in the short to medium term – because while New Zealanders could travel in and out, there was a lag before new migrants from other countries could come in.

The borders will open to vaccinated Australians without isolation tomorrow as well as to up to 5000 international students. Travellers from visa waiver countries will be able to enter from May 2, and from all other countries from October.

The advice estimate was based on longer term migration trends, but also noted there had been a significant drop in numbers departing prior to Covid-19 between 2012 and 2020.

The report said that while people would leave, it would still be some time before new migrants could come to New Zealand to take up the slack because of the staged border re-opening.

The borders reopened to New Zealanders travelling back from anywhere in the world on March 13 without MIQ or isolation requirements.