New Zealand economic slowdown raises emigration fears

29 May, 2006

When New Zealand's former prime minister Sir Robert Muldoon was asked his view of the flood of economic migrants quitting the country for sunnier and richer Australia, he said he approved because it would raise the average IQ on both sides of the Tasman Sea.
Little has changed since Muldoon made his comments in the 1980s. Every time the New Zealand economy takes a turn for the worse, the numbers of Kiwis heading across the "ditch" rises sharply.
More than 450,000 New Zealanders - about 11 percent of the country's population - live in Australia where wages and salaries are on average a third higher.
Emigration became a hot issue again in the last week as commentators and politicians compared the government budgets of the neighbouring countries announced this month.
Australian Treasurer Peter Costello was in an expansive mood, forecasting higher economic growth and handing out 36.7 billion dollars in personal tax cuts over four years.
In contrast, New Zealand is forecasting growth of just 1.1 percent in the current year to March and Finance Minister Michael Cullen resisted pressure to return at least part of a big budget surplus in tax cuts.
New Zealand's economic growth rate has averaged 3.5 percent over the last five years amid a boom in house prices, domestic demand and debt.

Read Comments