Stay in New Zealand and get trapped in debt, or travel abroad and see the world – that’s the choice Alie Benge and David Coffey say they face.
The couple, both 33, are among thousands of Kiwi economists planning to leave New Zealand as the country’s pandemic border controls continue to lift.
Coffey, a mental health worker, said he started looking for options outside of Aotearoa during last year’s lockdown due to the Delta outbreak. The couple had originally planned a trip but were now considering settling permanently in Barcelona or London.
After considering the cost of living abroad, the couple realized that “it’s doable” compared to what they were paying for an apartment in Wellington, he told Breakfast.
“It wasn’t particularly difficult” to make the choice to leave, Coffey said.
Commenting on recent media coverage of the brain drain, Coffey said Kiwis have always wanted to spread their wings and learn more abroad.
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 abroad was just the “next logical step” for them as a couple.
“Our options were so limited – it was either to take on this huge debt or to spend all our savings paying the rent,” she said.
“If we wanted to travel, staying in New Zealand any longer would use up all the money we could spend on travel…it was either leaving now or being trapped here with huge debt that would be hard to repay. ”
With the cost of living now on par with other centers around the world, it made more sense to live in London instead, Benge said.
In March, Kiwibank predicted that New Zealand would have an annual net loss of around 20,000 people when the borders opened.
The Department for Business, Innovation and Jobs has estimated that up to 125,000 New Zealanders – of which 100,000 are thought to be of working age – could leave the country next year. MBIE’s rough prediction, however, was 50,000.
Meanwhile, Infometrics senior economist Brad Olsen has predicted New Zealand could lose between 24,000 and 58,000 people to Australia next year amid higher wage temptations and a lower cost of living across the Tasman. At the same time, New Zealand could recover around 49,000 people from Australia.
Finance Minister Grant Robertson, who appeared on Breakfast after the couple, cited Reserve Bank projections of net migration reaching gains of 24,000.
But this figure was a long-term average. In the short term, the Reserve Bank said the impact of reopening borders on labor supply was uncertain.
“It will be a balance. New Zealand has always relied on immigration and we will over the next few years.”
Robertson said Kiwis have been doing OEs for decades and usually come back to raise their families. He added that there was pent-up demand from closed borders over the past two years.
“What we need to do is make sure there are good quality jobs here, good quality housing here for them.”
Regarding inflation and the rising cost of living, Robertson said inflation was rising around the world and was driven by supply constraints and the war in Ukraine.
“This is truly a global phenomenon.”
But inflation for non-traded goods in New Zealand – the rise in prices of items that are not sold on the international market and are more impacted by domestic changes – reached 5.3% during the year. until 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 need to consider what the money is for – everything from Covid-19 vaccines to supporting businesses through pandemic restrictions, like resurgence support payments.
He said New Zealanders were “happy” that the country had come through Covid-19 “with relatively limited health impacts, relatively limited economic impacts so far”.
In this environment of high inflation, “the government is doing its part by making sure we are spending prudently and wisely,” Robertson said.
“The job of the Reserve Bank is the other side of the equation and that’s obviously why interest rates are going up because they’re now trying to bring inflation down.”
He said the consumer price index inflation rate of 5.9% between the December 2020 quarter and the December 2021 quarter was part of the cycle as the economy shrank after the Covid stimulus -19.
“[Inflation rates] are obviously on the rise. Later in the year and next year, most people are predicting it will come back down.”