Kiwis vote with their feet

18:51, Oct 08 2012

New Zealand's productivity growth had been markedly slower than in most other developed countries for many years, former National Party (and ACT) leader Don Brash said in May. Incomes in other countries accordingly had steadily risen above incomes in New Zealand, and more Kiwis were heading overseas.

Dr Brash's successor as party leader was John Key who - electioneering in 2008 - doubted our economy could sustain a brain drain to Australia of 750 people a week. A National Government would slow the outflow by matching New Zealand incomes to Australia's by 2025.

On becoming prime minister he set about delivering the goods by establishing the 2025 Taskforce, with Dr Brash as chair. It has since been disbanded and the outflow to Australia has quickened to more than 1000 people a week (let alone emigration to other countries).

The Government has tried to camouflage its impotence, insisting that Kiwis have been leaving Christchurch for Australia in the aftermath of the earthquakes; Australia has been attractive because of a major mining boom that will pass; some statistics show the wages gap is narrowing; and so on.

Mr Key now is reported to have said the "brain drain" is actually a "brain exchange" and rather than worry about people moving to Australia, let's appreciate that our population is rising, many bright people have been arriving here and this makes New Zealand a better and more exciting place. That's an unconvincing way of explaining why New Zealand recorded its highest net permanent long-term migration loss to Australia in 2011-12.

Mr Key should be dismayed. Campaigning in 2008, he told a university audience: “The brain drain worries the hell out of me.” Campaign billboards reinforced his concerns, pleading with voters to "wave goodbye to higher taxes, not your loved ones".

Dr Brash's taskforce found Australian incomes were at least 35 per cent higher than New Zealand's in 2008. That gap was probably now nearer 40 per cent, he said in May, and there was no sign of it closing any time soon. Rather, “it is much more likely to continue widening”.

It's not the only gap that should worry Mr Key. By turning a brain drain into a brain exchange, he has widened the credibility gap too.