Between December 2013 and March 2023, New Zealand’s unemployment rate was on average 0.3 percentage points below Australia’s.
The situation has changed recently, with New Zealand’s unemployment rate jumping significantly above Australia’s.
New Zealand’s latest unemployment rate was 4.6%, 0.5% above Australia’s rate of 4.1%.
New Zealand’s economy is also experiencing a deeper per capita recession than Australia, with GDP per capita declining by around 4% from its peak versus a 2% decline in Australia.
In the year to August 2024, 56,100 net New Zealand citizens departed the country, up from 38,615 the previous year.
There was a provisional net migration loss of 29,900 persons to Australia in the year ending March 2024. This included 17,000 migrants arriving from Australia to New Zealand and 46,900 migrants departing from New Zealand to Australia.
More than half (53%) of New Zealand citizen departures went to Australia.
Justin Fabo at Antipodean Macro has published some interesting charts showing the extent to which New Zealand’s labour market weakness has driven net migration to Australia.
First, Fabo has plotted the ratio of SEEK job ads in New Zealand to those in Australia (orange line) with net migration from NZ to Australia.
As you can see, relative labour market conditions have encouraged greater net migration out of NZ to Australia:
The relationship is also very clear when comparing unemployment rates between Australia and New Zealand:
Fabo estimates that the relative weakness of New Zealand’s labour market contributed to more than 0.5% of the Kiwi population leaving for Australia (in net terms) over the year to Q1 2024.
I will add that one of the reasons why New Zealand’s economy and labour market have been weaker than Australia’s is because it hasn’t benefited from the massive growth in heathcare and social assistance jobs arising from the NDIS:
Australia experienced a massive increase in the share of healthcare and social assistance jobs in the two years to 2024, whereas New Zealand healthcare and social assistance jobs recorded no increase.
