Analysis-New Zealand's economic missteps hasten exodus to sunnier shores

By Lucy Craymer

WELLINGTON (Reuters) - Corey Ngaru and his partner Elian Lellimo left recession-hit New Zealand for the sunshine of Australia's Gold Coast just a week ago, bidding a teary farewell to family and friends as they seek better jobs and pay elsewhere.

"There's a bunch more options, more opportunities," said Ngaru, who estimates he will be able to earn three times more working as a builder on the Gold Coast as he would in New Zealand.

Ngaru and Lellimo, who is originally from Argentina, follow 128,700 people, who permanently left the Pacific nation of 5.3 million in 2024, provisionally the largest exodus on record.

The rush to leave comes amid the worst economic downturn since 1991 outside of the pandemic, which analysts blame on low productivity and various policy missteps in part caused by unreliable data.

Unemployment is at a more than four-year high while the number in work saw the largest annual decline since 2009. Companies are going bust at the fastest pace in over a decade.

New Zealand's economy was the worst performing in the developed world last year, according to HSBC.

Across the Tasman Sea, Australia's economy has fared much better by comparison, with unemployment near record lows, making it once again a hot choice for kiwi jobseekers.

Since 1973, Australians and New Zealanders have been able to live and work in either country without restriction.

While the number of migrants has ebbed and flowed over the years, the greater job prospects in Australia - particularly in mining and construction - mean the net traffic is mostly westbound.

More than half a million New Zealand-born people now call Australia home.

To be sure, New Zealand still has more people arriving than leaving, however, net immigration has fallen significantly with 27,100 net immigrants in 2024 from 128,300 in 2023.

FLAWED DATA, FLAWED POLICY

Although New Zealand was quick to respond to the pandemic with early border closures and economic stimulus, both actions fanned inflationary pressures and pushed house prices to historic highs.

As a result, the central bank hiked interest rates at the fastest pace in its history while the government rapidly turned off the fiscal spigots, throwing the economy into recession.

"We had this kind of double effect of very strong stimulus that was reversed very, very quickly," said Shamubeel Eaqub, chief economist at pension fund provider Simplicity.

This, Eaqub compares with Australia, where rates never went as high. The Reserve Bank of Australia didn't feel the need to start cutting until last month.