Thanks Bro!

Australia has much to thank New Zealand for. Teaching us how to play better rugby is the most obvious one. Employing Kiwi, Robbie Deans, as head coach of our national rugby team, kind of says it all in terms of long-term Trans-Tasman superiority with the oval ball (although I will ask ‘who has won more Rugby World Cups?’).  
 
In the round ball code, the All Whites have performed well above expectations in South Africa in contrast to Australia’s World Cup campaign, which could only be described as disappointing.  
 
There are also plenty of economic reasons why Australia should thank New Zealand, but I’ll come to that shortly.  
 
Firstly let’s have a look at the performance of the New Zealand labour force over the past half decade or so.  
 

 
Source: Statistics New Zealand (Tatauranga Aotearoa), Labour Force, Feb 2010  
 
In the four and a half years between March 2003 and December 2007, the total employed went up by 290,000 workers and the numbers of unemployed dropped by 24,300 people.  
 
This surge in employment encouraged people back into the workforce as the labour force participation rate (defined as the % of all people aged 18 – 65 who are either in work or are actively seeking work) surged by over three percentage points.  
 
Clearly, the last two years have been difficult for the New Zealand economy, but they haven’t been on their own.  
 
The New Zealand unemployment rate of 7.3% doesn’t look great, however if Australia had the labour force participation rate (65.1%) of New Zealand (68.1%) then Australia’s unemployment rate would be 8.2% or in raw figures 914,000 people seeking work rather than the current 601,000 people.  
 
The biggest problem for the New Zealand labour market is that it lives next door to a very big gorilla. That gorilla’s name is Australia.  
 
In 2009 Australia’s annual GDP was USD$1,193 billion – about ten times the size of New Zealand’s 2009 GDP of USD$118 billion. This gorilla is very hungry for labour to feed its growing workforce appetite.  
 
Unfortunately for New Zealand, the gorilla is very selfish and the give and take is very unbalanced.  
 
For the 12 months ending 30 June 2009, the number of New Zealanders arriving in Australia was 47,782* as self declared long-stay or permanent Australian residents.  
 
The number of Kiwi arrivals contrasted enormously with only 16,760 Kiwi long-stay or permanent residents departing Australia.  
 
The ABS estimates* that around 548,000 New Zealand citizens are living long term in Australia. This is fantastic news for Australia on two fronts.  
 
Firstly, 31.7% of Kiwi arrivals are regarded as highly skilled labour. Secondly, the Kiwi labour force participation rate in Australia is very high at 79%, clearly indicating that New Zealanders overwhelmingly come to Australia to work rather than retire.  
 
This massively high participation rate translates to around 433,000 Kiwis who are working or looking for work in Australia.  
 
When the figures for New Zealanders working in the UK (63,000) and working elsewhere in the world (58,000) are added into the equation, we find that over half a million Kiwi workers are not participating in their home economy.  
 
The New Zealand workforce can be summarised as follows:  
 

 
* ABS Fact Sheet #17, March 2010  
** British Census 2001 (with trend growth factored in)  
*** http://www.census.govt.nz/  
**** assuming NZers-in-Australia participation rate of 79% applies elsewhere  
 
Clearly, New Zealanders love to travel and they especially like to travel and work. This is great for those individuals who make the decision to leave New Zealand as they find work relatively easily, and in larger economies they gain experiences that would be far harder, if not impossible, to attain in their home country.  
 
The challenge for the relatively new New Zealand Government is to find a way to attract far more of their best and brightest to come back home permanently, critically when these workers still have many years of high workforce productivity ahead of them, rather than on the verge of retirement.  
 
Let’s hope, for Australia’s sake, that NZ Prime Minister, John Key, does not succeed because just like we need Robbie Deans’s coaching skills for our national rugby team, we also need the hundreds of thousands of our skilled Kiwi cousins to feed our large and hungry economy.  
 
And that shows no sign of stopping anytime soon.  
 
So, thanks Bro. Keep coming over and bring all your mates. We need you.