Australia and the New Zealand brain drain

by Mark Benson on April 13, 2012

in Australia Immigration

Australia and the New Zealand brain drain

The New Zealand government has today issued a statement suggesting that more needs to be done to ensure that a so-called “brain drain” from New Zealand to Australia is tackled sooner rather than later. The New Zealand Labour leader David Shearer is deeply concerned about the growing evidence of a brain drain from New Zealand and believes this could have a long-term impact upon the New Zealand economy.

New Zealand economy

As the New Zealand Labour leader put it, “There’s a ceiling on how much butter, beef, meat and milk you can make off New Zealand grass”. This may seem a little abrupt and a little basic but the fact is that New Zealand has nowhere near the mineral resources of Australia. The country has for some time now depended upon its farming and agriculture exports and while this has fared very well over the years there is a growing gap between the Australian economy and New Zealand economy.

Recent government figures suggest that the New Zealand economy grew by around 1.8% in the first quarter of 2012 and is showing signs of a gradual if not patchy recovery. This is significantly less than that associated with the Australian economy and in many ways perfectly illustrates the different directions in which the countries are moving.

The brain drain

Despite the fact that New Zealand has what many deem to be a world-class education system it appears that there are few opportunities to retain these highly skilled individuals when comparing the New Zealand economy to the Australian economy. There are many people now looking over the water to see a higher standard of living, higher wages and at least in the short term greater prospects. The fact that the Australian economy is at the moment dependent upon the mining industry is but a side issue with more and more people blinded by the greater wealth on offer.

Stopping the brain drain

The New Zealand government has been very vocal in its concerns about the so-called “brain drain” and has also commented upon the fact that Australia is based upon the mining industry. As a consequence the authorities are now very keen to introduce innovative and groundbreaking initiatives to try and resurrect the problem of migration from New Zealand to Australia. Indeed the government of New Zealand has highlighted similar challenges which faced the Singapore, Denmark and Finland governments in the past amid suggestions that any future policies will be based upon the initiatives introduced by these three countries.

There can be nothing worse for the New Zealand government than to see millions upon millions of New Zealand dollars spent on the education system only for a significant number to have their heads turned by their “nearby” neighbour. There has always been a close relationship between New Zealand and Australia and in many ways this has not helped the ongoing brain drain problem because movement between the two countries is fairly easy. However, the authorities in New Zealand are well aware that the problem is growing and, with the economies moving at different speeds, now is the time to act.

Would a single Australian/New Zealand market help?

There has been talk over the last few years with regards to a closer relationship between Australia and New Zealand with particular reference to the economies. Indeed over the last couple of weeks we have seen the issue of a new single currency floated yet again and it is now very much on the political agenda. But would this actually help New Zealand?

A closer relationship between the two governments, two economies and the two countries would lead to a greater presence on the worldwide stage but at what cost to New Zealand? There are growing concerns that any single market would be dominated by the stronger party which is Australia thereby leaving New Zealand to hang onto the coattails of its neighbouring cousin.

Is the Internet the way forward?

Despite the fact that Australia is dominated by the mining industry at this moment in time, the government has made significant progress with regards to the roll-out of a high-speed broadband network. This would appear to indicate the Australian government is looking further ahead once the mining boom has subsided and this is perhaps a model which the New Zealand authorities could take on board. The online arena has opened up the worldwide market to companies and individuals and your next customer is literally just a click away!

Unfortunately over the last few days we have seen some criticism from the US government with regards to technology and in particular the New Zealand government’s aim to ban software patents. When you consider that the online arena has created a whole raft of software patents, and similar initiatives, would you be willing to invest millions of dollars in New Zealand knowing that your expensive software patents were not protected?

Does the New Zealand government need to think again?

The idea of using technology as a basis for growing the New Zealand economy in the future is very sound and very sensible in principle. However, the legislation currently before the New Zealand Parliament would effectively ban software patents within New Zealand. This is not the way to attract investment in technology and new innovations and there are many experts who believe that the New Zealand government needs to think again.

We are coming towards a major crossroads for the New Zealand government, the New Zealand economy and the New Zealand workforce and until this challenge is taken on wholeheartedly it seems that Australia will always be more attractive for those chasing a higher standard of living.


Australia has been accused on numerous occasions of instigating “brain drains” from various countries around the world although the more recent accusation takes in New Zealand. Unless the New Zealand government, which has invested in a world-class education system, is able to reduce the brain drain then the gap between the Australian economy and the New Zealand economy will continue to grow.

While Australia does have the benefit of a wealth of natural resources, recent New Zealand government suggestions regarding a change in legislation for software patents does not appear to show a thorough understanding of the situation. If there is no protection for software patents then who would be willing to invest through a New Zealand subsidiary?

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