He said that increase in people leaving would drive down the rate of population growth that had been recorded due to record immigration in recent years.
“We know that when net migration and population growth was booming, it was papering over a number of cracks in the economy. We’re now seeing those net inflows fall and there’s a high chance those cracks are going to be exposed over the remainder of the year.”
He said that would put more pressure on the retail sector, where sales were already weak.
And the pace of rent increases might slow, keeping energy out of the housing market.
“It’s quite a confronting thing to see in terms of outflows. It’s simply a reflection of Australia’s noticeably stronger labour market.”
Kelly Eckhold, chief economist at Westpac, said there was a narrative that New Zealand was losing skilled people and gaining unskilled migrants, but he was not convinced that was the case.
“A lot of the people coming are coming on work visas where there is a skills requirement, they have to be paid a margin over the minimum wage. That in itself should mean the people coming in have a skillset and are ultimately adding something to the economy.”
He said there was a clear trend and forecasts of unemployment in New Zealand compared to Australia would not indicate a turnaround in that for the foreseeable future.
Eric Crampton, chief economist at the NZ Initiative, said Australia usually had higher unemployment than New Zealand – but the reverse was currently true.
“Wages and employment prospects will always partially drive migration decisions. Over the longer term you might need to worry that Australia’s Reserve Bank will have to do more to keep fighting inflation than New Zealand’s will, which will soften the Australian labour market.
“But you might also worry that Treasury expects low productivity growth for New Zealand, and that will have its own depressing effect on wages, over time.”
