For much of the last 30 years, New Zealand has been one of Australias top source countries for migrants. But since 2013-14 Australia seems to have lost its attraction to Kiwis.

This is largely explained by the relative strength of the two countries labour market.

At the 2016 Census, New Zealand was the second largest source of overseas-born people in Australia at 518,466 or 2.2 percent of the population. This was still substantially behind the English-born at 907,507 or 3.9 percent and not far ahead of the Chinese at 509,555 or 2.2 percent.

On current trends, however, New Zealand will not maintain its second position.

New Zealand citizen contribution to net overseas migration, the way the ABS measures the contribution of migration to population growth, has been in steady decline since 2013-14 (see Chart 1).

The decline in New Zealand citizen contribution to net overseas migration is explained almost entirely by the relative strength of Australias and New Zealands labour market (see Chart 2).

From 2009 to 2013, Australias unemployment rate was consistently lower than that of New Zealand by around a full percentage point. This correlated with a New Zealand citizen contribution to net overseas migration of over 10,000 per quarter for much of this period.

Since 2013, the unemployment rate in New Zealand has declined significantly more quickly than in Australia. This has led to the New Zealand citizen contribution to net overseas migration falling to between 3,000 and negative 80 per quarter. In fact there were three quarters during this period that more New Zealand citizens left Australia than arrived long-term.

For most of 2019, the New Zealand unemployment rate was around 4 percent while Australias was around 5 percent. This suggests the ABSs preliminary estimates of the New Zealand citizen contribution to net overseas migration in 2019 may be substantially overstated.

Indeed, the Morrison Government may replicate the Abbott Government and deliver a number of quarters of a negative contribution of New Zealand citizens to net overseas migration.

This further highlights the Morrison Governments poor performance in terms of the labour market.

Abul Rizvi was a senior official in the Department of Immigration from the early 1990s to 2007 when he left as Deputy Secretary. He was awarded the Public Service Medal and the Centenary Medal for services to development and implementation of immigration policy, including in particular the reshaping of Australias intake to focus on skilled migration. He is currently doing a PhD on Australias immigration policies.