New Zealand Migration to Australia

This story in the Fairfax press about New Zealanders living in Australia should have started a discussion. Most people in Australia know a few Kiwi’s. However it might surprise that the most recent estimate put the total number at close to 650,000. Citizens of the two countries can live, work and stay for as long as they want without the need to even apply for a visa (technically, they are granted a temporary visa on entry).

This policy, in effect since the early years of Australian government and formalised in the 1973 Trans-Tasman Travel Arrangement, is one of very few that exist globally. I believe this is a good policy. Despite the rhetoric about the UK, the US and China, arguably Australia has more in common with New Zealand than any other nation on earth. Both nations are predominantly English-speaking, historically Commonwealth outposts with similar political systems. In the 1980s, both economies were restructured by progressive ‘third way'(ish) governments.

For a nation of 4.4m, the 650,000 citizens living in Australia add up to a significant amount of people. Yet current Australian policy is intent on almost pretending these people don’t exist. As the story in the SMH outlined, there are a litany of government-funded support programs that New Zealand citizens do not have access to, including basic homeless shelters and some employment programs. The Department of Immigration and Citizenship’s ‘Factsheet 17‘ outlines some more detail on this issue.

Basically, a New Zealand is just another temporary resident who can only become a permanent resident through the standard means – either via the family migration pathway (expensive and quite the queue), sponsored by their employer or through the ‘points-test’, brandishing their post-graduate education and Australian work experience.

The issue is that of those 650,000 New Zealand citizens in Australia (of which, about 510,000 are classified as Australian residents for work and tax purposes with the remaining short term visitors), a considerable percentage will never qualify under these visa schemes. We are talking about people from all walks of society. This includes the educated elite but also less educated, poorer New Zealanders who come seeking work or to live with family. Especially vulnerable are New Zealand citizens who come from Pacific-island backgrounds, some who are illiterate and struggle to speak English. These migrants do not have access to English language support programs that most permanent arrivals enjoy. This is despite English language skills being proven to boost earnings significantly (see this paper by Australia’s own Paul Miller and Barry Chiswick).

One of the most crushing aspects of this policy position is the impact on young adults. Children who migrate often have no choice in the matter. Yet New Zealand citizens living in Australia who graduate high schools do not have access to the HECS system and have to pay upfront fees (albeit at a significantly reduced rate than international students).

Without hyperbole, HECS is probably the single greatest higher-education policy in the entire world. Unlike in the US, those who need support most are able to receive it. Those who go onto earn good incomes can then repay some of the debt over time. Importantly, the policy enables inter-generational social and economic mobility, something that needs to be encouraged in a high-skilled economy and a nation that believes in limiting inequality. Yet if you happen to be a New Zealand kid who just graduated high school with your 97.5 university entrance score, you better hope your parents can stump up enough cash to get you through 3-4 years of university fees. Oh, and if your parents do have enough money to pay those fees, unlike all those other kids boozing on their youth allowance payments, you don’t qualify for any support payments.

Perhaps fair enough you say. I mean, surely Australian’s are subject to the same type of requirements in New Zealand. Not quite. If you’ve been living in New Zealand for over two years, in most cases, you will qualify for the same support as any New Zealander. Granted, New Zealand has a different higher-education funding policy but at least you won’t be working 30+ hours a week to pay your rent. These young New Zealand citizens came to Australia in some cases over a decade ago and are still not entitled to this funding. They are for all intensive purposes Australians and deserve better opportunities than to be treated as permanent-temporary residents.

All of these changes came about in February 2001. Before then, New Zealand citizens living in Australia had pretty much open access to government funded programs, including education, employment and other support services. The Howard Government, aware more and more New Zealands were coming to Australia, believed this broad set of changes to social support and permanent residency would change the intentions of people moving to Australia. At the time, there were about 400,000 New Zealanders living in Australia.

Source: ABS (
Source: ABS (

As the graph above on the right shows, the Government could claim some success in deterring more people to arrive (but let’s be careful, as we all know, correlation, causation etc). There was a strong dip in the growth of arrivals from 2001. Yet whatever victories were won in the early 2000s, they were erased by the increases in the second half of the decade. The stats above only go to 2009 and end at 550,000. In the three years from 2009 to 2012, an additional 100,000 people arrived.

Another part of the reform rationale was to increase the skills-base of Australia’s immigration program. Open border access for Kiwi’s doesn’t add to the skills basis of Australia’s migration program despite there being many skilled New Zealand citizens. Skilled migration allows increases in economic output and benefits Australians as well as migrants. In fact, Australia probably has one of the most beneficial migration programs in terms of per capita GDP in the developed world. By trying to remove the incentive for movement from New Zealand to Australia was motivated in part by the reform to generate a more highly skilled immigration policy.

At the end of the day there are only two choices. The current policy limbo cannot be allowed to continue. Permanent ‘temporary’ migration is the worst option available. This cannot be emphasised enough. Any growing community that is excluded from the mainstream needs to be integrated to ensure social cohesion. Traditionally, Australia has been a world leader in ensuring this doesn’t occur. Poorer New Zealanders citizens, especially from Pacific and Maori backgrounds, will challenge this tradition sooner rather than later if the status quo is maintained.

The first option would be to allow migrants already in Australia to stay and place them on a pathway to permanent residency and citizenship. In the process, opponents of Australia-New Zealand migration advocate for New Zealanders to be classified as any other nation and for migrants to apply through the standard channels. Bob Birrell has recently argued such a position. Birrell, an academic based at Monash University, is right to argue that Australia will continue to attract New Zealand citizens while a significant gap in GDP per capita exists.

The other option is to maintain the migration status quo (open movement) but return to allowing these migrants access to the full suite of social support (after a defined waiting period, currently two years for other permanent residents). This would also include a pathway to citizenship. Despite this emigration, the New Zealand population is not declining, it’s growing. The economic, social and cultural benefits of an open-borders policy with regional neighbours cannot be discounted. The challenges of the future – increasing globalisation and a Pacific region beset by climate change and instability – will be better met with closer relations with New Zealand. And there is no closer relation than open borders. There will be fiscal costs associated with reverting back to providing services however currently New Zealander’s have a participation rate of over 75 per cent in the labour market, meaning significant taxation gains for the budget bottom line. I see these benefits as vastly outweighing any potential costs.

I’m not a believer in things occurring by stealth. This should be a public discussion, more so than it is currently. I see public acceptance of New Zealand migration leading to an important foundation for a broader discussion of immigration in Australia.

Additional information;

These graphs are taken from this excellent Discussion Draft paper on cross-border movements from the joint Productivity Commission study into Australia-New Zealand economic relations.

People movements over time


Gaps in Income


Screen Shot 2013-04-18 at 8.06.36 PM

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