World Tour: A country in transition

NICK EICHER, HOST: Coming up next on The World and Everything in It: World Tour.

For decades, New Zealand has seen her 20-somethings head overseas for a backpacker’s working holiday. But recently, many haven’t come back.

Data reveals many young professionals are leaving the country in record numbers.

MYRNA BROWN, HOST: But there may be a silver lining. The country reports a lot of people are immigrating to New Zealand … offsetting the natives migrating out.

WORLD correspondent Amy Lewis reports.

AMY LEWIS: In April, New Zealand began offering the Active Investor Plus visa. It’s meant to encourage wealthy overseas investors to become permanent residents in the “Land of the Long White Cloud.” To qualify, you need to be able to invest at least $3 million U.S. dollars and live in the country for only three weeks over three years. It’s an expensive vacation to Middle Earth.

NATIONAL PARTY: And since then we’ve had 189 applications representing over a billion dollars of investment into New Zealand.

This country the size of Great Britain has four-and-a-half times more sheep than people and twice as many cows. It boasts snowy mountains and lush green valleys. For fans of the Lord of the Rings movies, who wouldn’t want to live and invest in the home of Hobbiton? It’s the dream destination.

So why are so many New Zealanders leaving?

According to news reports…it’s the economy.

BLOOMBERG NEWS: And in the last two years, more New Zealanders have left for Australia for better opportunities in the face of a cost of living crisis.

New Zealand has not recovered from the government’s $58 billion dollar pandemic payout to keep businesses from failing. The temporary influx of so much money increased inflation. Former Prime Minister Jacinda Ardern’s extreme green carbon-neutral policies like agricultural methane taxes didn’t help.

Australia and New Zealand’s decades-old reciprocal relationship makes matters worse when Australia advertises their essential worker jobs to New Zealanders. Bryce Wilkinson is an economist and public policy worker and a senior fellow at the New Zealand Initiative.

BRYCE WILKINSON: You know, our newspapers are reporting, you can, if you're a policeman or a nurse or something, you go, go to Australia and get 30 percent increase, or something like that, which is consistent with, with the data.

He says the current numbers of Kiwis leaving the country are high—but they’ve always been high.

WILKINSON: So that has been an ongoing feature of New Zealand's migration flows, that we've had a net outflow of people in 64 of the 69 years between 1950 and 2018.

Late teens and twenty-somethings traditionally drive the country’s annual net migration losses. New Zealanders expect young people to go on a backpacker’s working holiday, to go overseas and see the world.

WILKINSON: And I did so myself in my 20s, and get their overseas experience…it builds integration and knowledge and skills transfer and contacts and understanding of those countries.

Last year, more than 70,000 New Zealanders between the ages of 18 and 30 left the country, but only about a third as many came in. With an already plummeting fertility rate and an aging population, that could lead to economic stagnation and the collapse of rural New Zealand.

Now there are new worries that retirees are also leaving.

Janice Davidson and her family became New Zealand citizens 24 years ago after leaving South Africa. They lived in a rural area at first and had a very difficult time integrating and being accepted until they moved to a more cosmopolitan urban city.

DAVIDSON: I loved it, absolutely loved Wellington. If we’d stayed there, I would have been happy.

Nine years ago a friend convinced her oldest adult son to move to Australia.

DAVIDSON: And he loved it so much. And he settled very happily, and he wanted all of us to join him, so he started working on us.

After her second son moved to Australia, Davidson and her husband sold their house and moved over “The Ditch” to Bacchus Marsh, Australia. Their daughter followed. Now Davidson has grandchildren there. She’s unlikely to go back to New Zealand.

DAVIDSON: You know, grandkids kind of draw you.

Many New Zealanders fear it's turning into an exodus…but is it really?

WILKINSON: We don’t know for sure. We don’t have good enough data. But on the evidence, the people coming into New Zealand are outnumbering those who are leaving.

That means the population of New Zealand continues to grow. Last year official records showed that New Zealand had a provisional net migration of 21,000 people and the year before had a record-setting 135,000 people.

WILKINSON: So in my lifetime, the New Zealand population has gone up from about 3 million to about 5 million today.

Often, they come from Asian countries to escape oppressive governments. Many are also well educated. New Zealand’s official data agency Stats New Zealand says instead of a brain drain, the migrant arrivals and departures work more like a “Brain Exchange.”

WILKINSON: You know, you jump into a taxi in Wellington from the airport, and the taxi driver is from Sri Lanka or India or somewhere…I just sort of say, what's your degree in? And commonly, it's in engineering or something. And I sit there feeling very bad that our labor market’s, not using their skills better.

New Zealand’s COVID-19 travel restrictions significantly curtailed any movement in or out of the country for a few years. From those all-time lows to the peak in October of 2023, arrivals quadrupled. The stats look like a heart rate graph.

But Wilkinson says even since writing his report last year, things have changed.

WILKINSON: The numbers have got less dramatic. I don’t know how to interpret that.

And while overseas arrivals have slowed considerably following immigration policy changes, the rate of New Zealanders leaving continues to grow by a third.

WILKINSON: If people are voting with their feet, well, that's telling you something about yourself. And if you don't like it, you'd better change something about yourself.

Even an influx of new rich investors won’t solve all the country’s problems.

WILKINSON: We need all sorts of people. It's the advantage of as long as you know the money is being earned, you know, by productive employment and entrepreneurial effort, rather than sort of corruption in a corrupt country…but they see potential and feel they can contribute. That's gotta be good.

Reporting for WORLD Tour Special Report, I’m Amy Lewis in Bacchus Marsh, Australia.

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