New Zealand's Australia Problem

0:00 If anything can concisely summarize the present predicament facing New Zealand,

0:04 it's this single number, 73,852.

0:09 In the 12 months leading up to August 2025, 73,852 Kiwis immigrated.

0:15 In other words, 73,852 is the number of Kiwis that packed their bags and booked

0:21 one-way tickets out of the isolated island

0:23 nation to build a new life somewhere else.

0:26 Broken down, that's 202 people a day,

0:29 nearly enough to fill an Air New Zealand A321 aircraft.

0:32 More than doubling the number of Kiwis lost in both World Wars,

0:36 or ranking as the country's ninth largest if it were a city.

0:39 This number by itself is a major concern.

0:42 Making the problem only more glaring is that more than

0:44 a third of those leaving are aged 18 to 30 years old,

0:48 making the problem only more structural.

0:50 Long-term immigration by New Zealand citizens has

0:52 been steadily rising for more than a decade.

0:55 From 2015 to 2025, the cumulative total is at 454,000,

1:00 a number larger than all New Zealand cities aside from Auckland.

1:04 73,852 is not a fluke, but rather a sign of the times.

1:11 Now, there are plenty of theories informing why Kiwis are leaving,

1:14 but simply consider where this diaspora is

1:16 headed and a clearer picture takes shape.

1:19 Australia.

1:20 With the vast majority of these departures headed across the Tasmin Sea,

1:23 it's the recently established extremely close relationship between these two

1:28 countries that's sitting at the center of this developing demographic disaster.

1:33 across the entire English-speaking world,

1:35 even within the core five nations of the Anglophere,

1:37 the US, Canada, UK, Australia, and New Zealand,

1:40 all of which sharing British heritage,

1:41 democratic structures, and close economic relationships,

1:44 no two nations are nearly as culturally, politically,

1:48 and economically aligned as Australia and New Zealand.

1:51 Culturally, just as an unaccustomed outsider may confuse

1:54 an American and a Canadian because they sound similar,

1:57 they listen to mostly the same music,

1:58 they both watch the same professional sports leagues that span the two nations,

2:02 an outsider may do the same with a Kiwi and an Aussie.

2:05 They're both likely to care about rugby,

2:07 they're both probably proud of their Pavlova desserts.

2:09 They share a lot of popular culture,

2:11 and they too sound similar to the untrained ear.

2:14 But culture only acts as the visible surface

2:16 level of the closeness between the two countries.

2:19 If a New Zealand citizen wants to visit Australia, no problem.

2:22 All one needs is a passport.

2:24 Again, not so different from the US Canada experience.

2:27 But if that same Kiwi wants to stay for a while and work, again, no problem.

2:31 They just need a passport.

2:33 Should they want to live in the country for a while, well, that's fine, too.

2:36 Just a passport.

2:38 Only until a Kiwi wants to begin being considered

2:40 for state benefits does a visa come into question.

2:42 And should they eventually decide they want to become a citizen,

2:45 they simply need to be present in the country

2:46 for four years and a full-time resident for one.

2:50 In fact, flipping between the two and becoming a citizen is

2:52 seen as such a small deal in the scheme of things

2:54 that a note on the government website asks those pursuing citizenship to make

2:58 sure that they aren't already by law an Australian without knowing it.

3:02 For Aussies and Kiwis, it's easier to work and move between the two

3:06 than it is for a Canadian and an American.

3:08 And it's easier to become a naturalized citizen than

3:10 it is for anyone moving between countries in the EU.

3:13 This unique closeness carries over to business, too.

3:17 Whereas trade across the US Canada border is paperwork intensive,

3:21 increasingly politicized, and subject to tariffs,

3:23 business between New Zealand and Australia functions

3:26 almost as if there's no border at all.

3:28 working towards a fully integrated international

3:31 economic understanding called the single economy market.

3:34 Trade and business relations between the two

3:36 resemble what you'd see across American states

3:38 or the UK without the historical baggage that may

3:40 inform how a Scott thinks of a Brit.

3:43 Whether it's relocating, naturalizing, working, or doing business,

3:46 there's really no two large developed countries outside

3:49 Europe where the movement between them is as seamless.

3:52 All this is relatively new.

3:55 In the 1890s, these six British colonies comprising present- day

3:58 Australia began the process of coming together as a country.

4:02 An Australian national identity had begun to develop.

4:04 Concerns over defense had heightened and frustrations

4:07 over the economic inefficiencies of not

4:09 having a single national market for foods and services had become too much.

4:13 At the first of a series of conferences hammering out the details,

4:16 New Zealand sent delegates at home.

4:18 They began floating the idea of joining this developing Commonwealth.

4:22 Ultimately though, they chose not to.

4:25 And while much is often made of the fact that Australia's

4:27 1901 constitution ultimately left room for New Zealand to join,

4:31 less is made of the fact that they didn't want to.

4:34 Their own independently governed colony

4:35 with a fruitful trade relationship with Britain.

4:38 New Zealanders believe their culture to be too different.

4:40 Their policies towards indigenous people to in congress with Australia's

4:43 and their economies not yet potential allies but rather export rivals.

4:48 For much of the early 1900s,

4:49 New Zealand maintained its distance from Australia and benefited from it.

4:53 With the aid of refrigerated shipping,

4:54 a temperate climate ideal for animal husbandry, and a wildly prosperous trade

4:58 relationship with the ever resource-hungry Britain,

5:01 the New Zealand economy, on the back of raw agricultural exports, soared.

5:05 By the 1950s, by GDP per capita,

5:08 New Zealand had become the world's third most productive, prosperous economy.

5:12 But then came the60s, and with it change in the form of synthetic

5:16 wool and Britain entering the European economic community.

5:19 Suddenly, a one-trick pony economy had to diversify.

5:23 New Zealand built factories.

5:24 It explored exporting to other markets like the US and Asia.

5:27 It expanded state services.

5:29 And ultimately, it faltered.

5:31 In the age of global liberalization of Reagan and Thatcher,

5:34 New Zealand underwent its own process

5:36 of difficult right sizing through Rogeromics.

5:39 By this point, in the 1980s,

5:41 Australia's economy had surpassed the productivity of New Zealand's for good.

5:44 And with few other promising options,

5:46 New Zealand came to the table with their neighbor to figure

5:48 out a trade relationship that would mirror those taking shape in Europe.

5:52 First came the closer economic relations agreement in 1983.

5:56 With tariffs and quantified restrictions between the two countries phased out,

6:00 a new trading partnership bloomed, growing by 500% over 20 years.

6:06 It was a watershed moment.

6:08 The fruitful agreement was taken further.

6:10 In 1998, the two agreed that products

6:12 that passed inspection and testing and became legally available

6:15 to consumers in one country could now be

6:17 sold in the other without any questions asked.

6:20 This was then extended to the workforce.

6:22 Anyone who obtained lensure in most any field in one

6:24 country was able to perform the same work in the other.

6:27 The relationship was further crystallized

6:30 with the single economic market agreement of 2009.

6:33 This has made it even easier for businesses to work

6:36 across the Tasmin Sea by setting up TransT Tasmin

6:38 regulatory bodies and essentially turning the hard borders between

6:41 the two countries into something closer resembling ever permeable dotted lines.

6:46 For both nations, coming together in a time of real uncertainty

6:49 in the 1980s has been a major success and stabilizing factor.

6:53 But recently for New Zealand, it's begun to show some difficult downsides.

6:59 What's killing New Zealand is that such a permeable border between

7:02 two nations is allowing Australia's gravitational

7:05 pull to impact New Zealand's population.

7:07 There are two simple metrics that inform

7:09 the critical differences between the two countries,

7:12 population and GDP per capita.

7:14 At 27.2 million people, Australia's about five times the size of New Zealand.

7:19 And in GDP per capita, Australia's at 12th in the world with $66,000,

7:24 while New Zealand lags behind at 25th with $49,000.

7:29 These two Gulfs have real consequences for New Zealand.

7:32 Just take any Auckland kid about to make

7:34 a decision on where to go to college, for example.

7:36 Because the two nations are now so closely tethered,

7:39 any graduating Kiwi has the opportunity to cross

7:41 the Tasmin and study in Australia without

7:43 a student visa while paying the domestic

7:45 rate for university rather than the international fee.

7:48 Of course, it should be said the same

7:50 exists for an Aussie looking toward New Zealand.

7:52 But let's say a student from either of these countries is looking

7:54 for a bigger campus with a larger range of paths of study.

7:58 In New Zealand, there are six universities that boast a student body over

8:02 20,000 with University of Auckland far

8:04 and away the largest with 45,000 students.

8:07 In just the Australian state of Victoria, there are seven such universities.

8:11 In New South Wales, another nine.

8:14 And should this student be a high achiever,

8:16 it's four Australian universities versus zero New Zealand

8:19 schools cracking the US News top 50 list.

8:22 And it's not until number 10 before you find a New

8:24 Zealand university in the top regional universities across the two countries.

8:28 For a prospective student,

8:29 Australia just provides more opportunities and for the high achiever,

8:32 more prestigious pathways.

8:34 Furthering the hypothetical,

8:36 let's say this postcol student is interested in getting into investment banking.

8:40 In Sydney, there's the big international names.

8:42 There's Goldman Sachs.

8:43 There's Morgan Stanley right across the street.

8:45 Right below it is UBS and a few blocks down there's JP Morgan.

8:49 There are also offices of Barkley, City Bank, and Bank of America.

8:52 In Auckland, there's barely any investment banking.

8:56 While City Bank does technically have a presence with an office here,

8:59 banking of any sort in New Zealand is dominated by A&Z, ASB,

9:02 Bank of New Zealand, and Westpak New Zealand,

9:05 three of which are subsidiaries of banks in Australia,

9:07 the fourth originally founded in New South Wales.

9:10 So should someone want to get into investment banking,

9:12 their best bet would be to attend university

9:14 within the collection of the group of eight,

9:16 the region's most selective universities,

9:18 all of which located in Australia, then head to Sydney.

9:21 For banking or anything finance related, it just makes sense to base operations

9:25 out of Australia as the infrastructure already exists,

9:28 the currency is more international, the markets just bigger.

9:32 While intuitive, this in turn stunts any

9:34 potential development for New Zealand's financial industry,

9:36 as it just makes far more sense to simply

9:38 go to Australia and quite potentially never come back.

9:42 Now, in New Zealand's culture,

9:43 it may not be the end of the world to be losing its finance bros,

9:46 but losing their tax dollars and their subsequent

9:48 local spending cost the nation's economy.

9:52 This trend exists beyond the finance and white collar hypotheticals, too.

9:55 In 2021, this advertisement ran in the New Zealand Herald,

9:59 sponsored by the state of Queensland.

10:01 They were looking to pull registered nurses

10:03 across the ditch to fill vacancies across a host of facilities with the promise

10:06 that the state had a reasonable working conditions,

10:08 livable cities, and warm weather.

10:11 The timing was opportunistic as New Zealand healthcare workers had gone

10:14 on protest just a month earlier demanding better working conditions and pay.

10:18 Those who followed the advertisement west reported back

10:21 that the jobs lived up to the promise.

10:23 They had fewer patients per nurse and they got paid better.

10:26 By March of 2024, of the 38,000 nurses registered in Australia that year,

10:31 10,000 hailed from New Zealand.

10:33 With such asymmetrical opportunity in education and employment,

10:36 New Zealand is hemorrhaging able workers in a classic case of brain drain.

10:41 The country is able to raise middle and high-income workers,

10:44 but is increasingly unable to keep them,

10:46 their skills, and their dollars at home.

10:49 Of course, with such open borders and similar cultures, people go both ways.

10:53 Australians invest their time and money in New Zealand, too.

10:56 But it looks different.

10:58 On average, if an Australian is planning to go to New Zealand,

11:01 it's either to visit, to retire, or to check on their real estate investment.

11:05 All of which brings money across the Tasmin,

11:07 but money that does less to grow the economy

11:09 and money that has a complicated impact on the nation's direction.

11:13 Tourism, for instance, is a major part of the New Zealand economy.

11:16 It employs some 10% of the population, at least indirectly.

11:19 It accounts for about 7.5% of the nation's GDP.

11:22 And with between a third and half of all tourists hailing from Australia,

11:26 the entire industry relies on its neighbors to keep it afloat.

11:29 In a place like Queenstown with beautiful

11:31 waterways abudded by dramatic snowcapped mountains,

11:34 tourism does an amazing job of commercializing

11:36 what would otherwise be some pretty inhospitable landscapes.

11:39 In this way, tourism does a lot for a rather rugged and rocky nation.

11:44 The thing is, tourism is a difficult industry to turn into a career.

11:48 One can work at one of the two ski resorts near Queenstown,

11:51 but it's only a seasonal job from June to October.

11:54 It's a job that won't likely require a degree,

11:56 and one that will count on young adventure oriented employees,

11:59 and thus will not pay well.

12:01 The same limitations will go for a raft guide, a luxury hotel employee,

12:04 a server at the popular restaurant in the heart of town.

12:07 Employment will probably be seasonal.

12:09 Pay will be at the whims of visitation trends well beyond their control.

12:12 Jobs will perpetually remain entry level.

12:14 Career advancement will be limited, and benefits will be non-existent.

12:17 Australians will come visit, spend their money,

12:20 stimulate the economy for the moment,

12:22 but ultimately perpetuate a system with fairly limited long-term viability.

12:26 The same goes with Australians that make the move permanent,

12:28 those that retire there.

12:30 While they're moving in, stimulating the real estate market,

12:32 spending their disposable funds at local businesses,

12:35 they're bringing little to the table when

12:36 it comes to growing the country's economic output,

12:38 benefiting its age pyramid, and simply by buying into the markets,

12:41 only making the housing crisis just a touch worse for the average Kiwi.

12:46 What's easy to lose sight of when considering New Zealand

12:48 and Australia is that while they're both extremely isolated island nations,

12:52 one is far smaller and more isolated than the other.

12:56 That informs some important push factors.

12:58 If Kiwis are pulled to Australia, they're also pushed by the fact that life

13:02 is just generally more expensive and less convenient.

13:06 For a lot of products, New Zealand status on the very edge

13:08 of global trade routes doesn't matter too much.

13:11 Take imported Twinnings tea or Cadbury chocolate bars.

13:14 They're fairly similar priced in both Australia and New Zealand.

13:16 And when compared to those available in the US, they're actually cheaper.

13:20 Global shipping has figured products like this out.

13:22 They're shelf stable, small, easy to handle,

13:24 and thus cheap to move and cheap to buy.

13:27 But when there are blips in this system,

13:29 New Zealand's far more likely to lose out.

13:31 Take a fresher and more difficult product, orange juice.

13:35 In 2024, orange juice prices started to rise at every Kiwi's local Woolworths.

13:39 Then the cartons began to disappear entirely.

13:42 This was on account of a faraway cyclone in Brazil that set

13:45 the global orange juice supply behind on account of a lack of orange juice.

13:48 In Australia though, the shortage was minimized by the fact

13:51 that there's a fairly strong orange industry domestically,

13:53 a benefit of the country spanning three climate zones from aid to tropical.

13:57 Even in things that New Zealand is well equipped to produce,

14:00 goods are expensive.

14:01 Take beef.

14:02 If a Kiwi is going to buy ground beef,

14:04 it's going to be largely at the global going

14:06 rate as beef is a major export for the country.

14:09 That means when beef is in tight demand and the market rate rises globally,

14:13 for Kiwis to entice New Zealand producers to sell locally,

14:16 they have to roughly match the rate.

14:18 Buying beef at the international rate though is expensive for the average New

14:21 Zealander because their purchasing power is hamstrung

14:24 by a less and less productive economy.

14:26 By monthly cost of living,

14:27 which considers everything from rent to grocery bills,

14:30 New Zealand's in the world's top 25 most expensive,

14:33 while by purchasing power parody,

14:35 New Zealand's at 36th near countries where the price of living is much lower.

14:40 No matter how much a Kiwi may love their home country,

14:42 this massive disparity between purchasing power

14:45 and price of living is crippling.

14:47 It's simply a massively difficult place to make ends meet.

14:51 While Australia is even more expensive on a cost of living basis,

14:54 its PPP ranking is a whole 40 spots higher.

14:57 Rent will be higher, but so will wages and earning potential.

15:01 Increasingly, as more and more Australian companies come to establish

15:04 important holdings and provide important services in New Zealand,

15:07 whether it's the banks, the grocery stores like Woolworths and Kohl's,

15:10 the gas stations like Ample, or the food distributor Goodman Fielder.

15:14 And as more New Zealanders look to access

15:15 opportunity in the wider world through moving to Australia,

15:18 the relationship between the two feels less and less equal.

15:22 It feels not like the interaction between two

15:25 sovereign self-interested countries and more so the interaction

15:28 of a far-flung down at its luck state

15:30 and the prosperous nation within which it resides.

15:33 On balance, the softening of borders between Australia and New

15:36 Zealand seems to benefit the former far more than the latter.

15:41 Australia receives access to new markets, a host of hungry young professionals,

15:44 and a beautiful and convenient destination to travel.

15:48 New Zealand, in turn, has an important economic ally,

15:51 a market to send its goods,

15:52 and an army of tourists to pump at least some money into the country.

15:56 It's an uneven agreement,

15:57 and one that's costing New Zealand far more than it's costing Australia,

16:00 is an imbalance informed by size and geography beyond the control of either.

16:05 But it's ultimately an imbalanced deal that likely isn't going anywhere soon.

16:10 Ask a Kiwi and they're not likely to harbor

16:12 any bitterness towards Australia and this imbalance of benefits.

16:15 Ask a New Zealand politician and you'll get much the same.

16:18 There's little to no animosity toward the nation

16:20 taking some of its best and brightest.

16:22 Immigration is a real problem,

16:24 but immigration is a consequence of a deal that New Zealand relies on.

16:28 Remove Australia from the equation and New Zealand is only in more trouble,

16:32 more isolated, and left with fewer prospects.

16:35 A colonial enterprise from the beginning,

16:37 New Zealand is a global nation with global ambitions.

16:40 And to act on such ambitions as the most

16:42 isolated major nation in the world comes with real trade-offs.

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