Bright young things simply following money overseas

DAVE ARMSTRONG
Last updated 09:02 05/11/2012

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Dave Armstrong

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OPINION: Bon Voyage! Last week I bade farewell to a friend moving to Auckland, and learned that a couple of bright young things I'd worked with had just jumped the ditch to Australia. So am I going to condemn the Government for forcing our best and brightest overseas? Sorry, but I'm cynical about the "brain drain".

During the 2008 election, the National Opposition gained great mileage out of our young people leaving our shores in record numbers. Apparently John Key's tax cuts would revitalise our economy and attract young Kiwis back in their thousands. Yeah, right.

Now, the 2008 brain drain looks like a neuron trickle in comparison to today's cerebral deluge. So I suspect Labour will argue back that National has done nothing to stem the tide, which is true.

Going overseas has been a rite of passage for many young Kiwis since the 1950s. It used to be called OE (Overseas Experience) and if you didn't do it you were considered strange.

However, back then, most Kiwis soon returned after a few years, mouthing platitudes like "it's a great place to bring up kids", which is ironic given our appalling child abuse statistics.

But has anyone considered the other reasons for our growing export trade in young brains? Despite being relatively free of corruption, New Zealand is a hard place in which to get ahead. If you're young and competent and you work in an office (public or private), before long, a genial boss, usually a middle-aged bloke, will tell you that if you don't rock the boat you might be promoted up a notch by the time you're 40. I'd leave, too.

Try establishing a business and similar things can happen. Larger businesses don't look too kindly on young upstart competitors and government tenders will probably require that you have "experience in the sector" before they hand you a contract. This means you'll have to wait until you've made as many muck-ups as the established firms. I've even heard organisations refer to 40-year-olds as "young blood".

Thanks to Solid Energy and other organisations laying off staff, we now also have a brawn drain. Miners and other workers are increasingly taking up employment in Oz. They would love to stay in New Zealand, but can't wait around until our government organisations and overseas insurance companies get their act together to start the Christchurch rebuild.

Yet though Kiwi brows are constantly furrowed about the brain drain, why is no-one talking about the "profit drain"? Every year billions of dollars of our best and brightest currency decides to upend its roots and head off overseas. Why? Because most of this country's businesses are now owned by overseas companies. But surely overseas ownership brings investment and jobs? Absolutely, but not nearly as much as local ownership. Profits produced in New Zealand slosh around in our economy for far longer.

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But apparently New Zealanders are too useless to own big private enterprises. We're great at manning petrol stations for the minimum wage, but we can't own our own oil company. New Zealand banks apparently give better service with Australians in charge, as do pulp and paper mills, insurance companies and newspapers. Our beer advertisements promote a proudly independent Kiwi spirit, yet the percentage of brewery profits that stay in this country reminds me of the pub drinker who jokes that "I don't really buy beer, I rent it". Make a movie here and we'll give you generous tax credits and free advertising space on our government airline.

So am I advocating state ownership of all industry and big barriers to foreign investment? Sorry Winston, I'm not. But a good hard look at our monopoly laws and more investment in organisations like Kiwibank, which keeps its foreign- owned competitors honest and reinvests its profits here, is worth considering.

So next time someone mentions the "brain drain", remember that our young people are simply following the money - travelling in the same direction as the billions of dollars that politicians ensure flow out of our country each year.

- © Fairfax NZ News

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