Brain drain: Kiwis heading overseas as living costs rise

Source: 1News

Stay in New Zealand and get trapped by debt, or travel overseas and experience the world - that's the choice Alie Benge and David Coffey say they're facing.

The couple, both 33, are among the thousands of Kiwis economists forecast will leave New Zealand as the country's pandemic border controls continue to lift.

Kiwis David Coffey and Alie Benge are thinking of moving overseas.

Coffey, a mental health worker, said they started looking at options outside Aotearoa during last year's lockdown because of the Delta outbreak. The pair had initially planned a trip but were now looking at permanently relocating to Barcelona or London.

After looking at the costs of living overseas, the couple realised "this is doable" compared to what they were paying to flat in Wellington, he told Breakfast.

"It wasn't particularly tough" to make the choice to leave, Coffey said.

Commenting on recent media coverage about brain drain, Coffey said Kiwis had always wanted to spread their wings and learn more overseas.

One day, he said he wanted to come back to New Zealand and contribute - with those experiences under his belt.

Benge, a writer, said moving overseas was just the "logical next step" for them as a couple.

"Our options were so limited - it was either taking on that huge debt or spending all our savings on paying rent," she said.

"If we wanted to travel, then staying any longer in New Zealand would use up all the money we could spend travelling… it was either leave now or be trapped here with a huge debt that would be difficult to pay off."

With the cost of living now on par with other centres around the world, it made more sense to live in London instead, Benge said.

In March, Kiwibank predicted New Zealand would have an annual net loss of about 20,000 people as borders opened.

The Ministry of Business, Innovation and Employment estimated up to 125,000 New Zealanders - of which 100,000 would be people of working age - could leave the country in the next year. MBIE's ballpark prediction, though, was 50,000.

Meanwhile, Infometrics' principal economist Brad Olsen forecast New Zealand could lose between 24,000 to 58,000 people in the next year to Australia, amid temptations of higher pay and lower living costs across the Tasman. At the same time, New Zealand could get back about 49,000 people from Australia.

Finance Minister Grant Robertson, who appeared on Breakfast after the couple, cited the Reserve Bank's projections of net migration reaching gains of 24,000 people.

But, that figure was a long-term average. In the near term, the Reserve Bank said the impact of borders reopening on labour supplies was uncertain.

"It will be a balance. New Zealand has always relied on immigration coming in and we will be doing that over the next few years."

Robertson said Kiwis had been going on OEs for decades now and usually came back to raise their families. He added there was pent-up demand from the borders being shut in the past two years.

"What we have to do is make sure there's good quality jobs here, good quality housing here for them."

As for inflation and the rising costs of living, Robertson said inflation was increasing around the world and was driven by the likes of supply constraints and the war in Ukraine.

"This genuinely is a global phenomenon."

But non-tradable inflation in New Zealand - the rise of prices in items that aren't sold on the international market and are more impacted by domestic changes - hit 5.3% in the year to the December 2021 quarter.

Breakfast's Matty McClean asked Robertson how much the Reserve Bank's 'money printing' policies of the past two years had contributed to inflation.

Robertson said Kiwis needed to consider what the money was used for - everything from Covid-19 vaccines to supporting businesses through pandemic restrictions with the likes of the resurgence support payments.

He said New Zealanders were "pleased" that the country got through Covid-19 "with relatively limited health impacts, relatively limited economic impacts up until now".

In this high inflation environment, "the Government does its bit making sure we spend carefully and wisely", Robertson said.

"The Reserve Bank's job is the other side of the equation and that's obviously why interest rates are going up because they are now trying to bring inflation back down."

He said the consumer price index inflation rate of 5.9% between the December 2020 quarter to the December 2021 quarter was part of the cycle as the economy came down from Covid-19 stimulus.

"[Inflation rates] obviously are spiking up. By later in the year into next year, most people are predicting they'll come down again."