Why provide a faster pathway to Australian Citizenship for NZ Citizens?

Apr 26, 2023
Waving flag of New Zealand and Australia laid together

Anthony Albanese has in essence reversed the Howard Government’s 2001 changes to rules around NZ citizens living in Australia and their access to Australian citizenship.

For such a major change, it is surprising it will be brought in quickly from 1 July 2023.

Usually, major immigration policy changes take at least 9-12 months to design and implement after announcement because of the impact on IT systems, budget negotiations, designing of regulation changes which in this instance go well beyond the Migration Act. There will be a cluster of legislation in different portfolios that will be affected.

A bit of history

Before discussing why the Albanese Government may have done this, it’s worth going back to the time Howard made his changes – and the changes were very much Howard’s own idea.

In 1999, I was contacted by the Department of Prime Minister and Cabinet (PM&C) to participate in a process to tighten policy in relation to NZ citizens coming to Australia. At that time, NZ citizens in Australia could access the full range of government services and benefits and become Australian citizens without first acquiring permanent resident status.

Most new permanent residents also had to wait two years before they could access social security benefits as introduced by Howard in 1996. That was only a requirement for nationals of all other countries. Howard wanted to put NZ citizens in Australia on a temporary visa on the same footing as temporary entrants from all other nations.

I had a feeling Howard was still smarting from his bruising experience with the Asian migration debate of 1988 and Bob Hawke humiliating him with the 1989 Parliamentary motion to entrench non-discrimination in the permanent migration program. Howard would use Hawke’s motion to his advantage with the changes for NZ citizens.

The Howard Government eventually decided that all NZ citizens who arrived in Australia after 26 February 2001 who wanted to access certain social security payments, obtain citizenship or sponsor family members for permanent residence could only do so after applying for, and being granted, permanent residence through the migration program.

Some of the other drivers of the 2001 change included:

  • The net volume of NZ citizens coming long-term to Australia had increased significantly, especially in comparison with the net number of Australians going to NZ long-term. That was leading to a growing cost to Australia’s social security budget although that was offset by the taxes they paid.
  • The NZ economy had been going through very difficult periods with relatively high levels of unemployment which led in some years to negative net migration to NZ. Since around 2013, however, the NZ unemployment rate has been substantially lower than Australia’s and the net number of NZ citizens coming to Australia long-term has fallen significantly.
  • The NZ Government had loosened its immigration policy to address concerns of negative net migration at a time the Howard Government had significantly tightened immigration policy. Today the two Government’s immigration policies are more closely aligned.

In discussions amongst public servants leading up to the 2001 changes, the possibility these would eventually lead to a growing group of NZ citizens living long-term in Australia in ‘immigration limbo’ was extensively discussed. Eventually, PM&C decided this was not a pressing issue and could be addressed at a later stage given policy for NZ citizens in Australia on or before 26 February 2001 was to be grandfathered.

So why is Albanese reverting to pre-2001 policy?

The change the Albanese Government has announced will undoubtedly have a substantial budget cost, even though the people immediately affected have been living in Australia long-term – and thus will have no impact on net migration. We may know the cost of the change over four years when the May Budget is released. Many of the NZ citizens who benefit will be much older than the average age of migrants in the permanent program. Most will be relatively lesser skilled and on low pay jobs. This Budget cost will not include the taxes these NZ citizens pay as those are already built into the Budget figuring.

In theory, the permanent migration program would need to be increased to accommodate those granted Australian citizenship but I suspect they will be treated as a footnote when the 2023-24 migration program is announced on the basis they no longer go through a permanent resident visa stage. Indeed, if the permanent migration program is held at current levels, the effect of this policy change will be to free up around 8,000 to 10,000 places per annum that previously went to NZ citizens who did secure a permanent resident visa.

But there are good policy reasons for the change. The issue has been a long-standing irritant in the bi-lateral relationship, including due to Australia’s policy of deporting NZ citizens who commit a crime but have lived in Australia for most of their lives. NZ citizens who are in Australia long-term and acquire Australian citizenship will subsequently not be subject to s501 visa cancellation on character grounds.

I suspect that in exchange for this new policy for NZ citizens, the Australian Government has negotiated with NZ to increase the number of asylum seekers who arrived by boat after offshore processing was re-introduced by the second Rudd Government. The current NZ offer of 150 places per annum is insufficient to ensuring all asylum seekers on Nauru and PNG, as well as all ‘transitory persons’ in Australia, are resettled before the next Election. That is a primary objective for the Australian Government.

The most important reason for the change, however, is the more nebulous but hugely important objective of social cohesion. It is just not good policy to have a large and growing group of people from one nation in Australia in ‘immigration limbo’. That is simply a recipe for social unrest and resentment, especially amongst the children of this group. Albanese’s policy addresses that and that is a good thing.

Opposition immigration spokesperson Dan Tehan has objected to the policy change on the grounds that it is “jeopardising Australia’s non-discriminatory migration policy” and that it “flies in the face of Labor great Bob Hawke’s commitment to a non-discriminatory immigration policy”.

But Tehan forgets that it was the Turnbull Government that first introduced a special permanent resident stream specifically for NZ citizens in the Skilled Independent category and subsequently the Morrison Government introduced a special permanent resident visa for specifically for Hong Kong citizens. The Albanese Government has announced a special permanent residence visa lottery for citizens of Pacific Island nations starting from 1 July 2023.

Bob Hawke’s principle of non-discrimination in the permanent migration program is well and truly dead.

Tehan’s biggest concern, however, is likely to be the electoral consequences of the change. The speed of this change could mean that around 300,000 NZ citizens will by the time of the Voice Referendum have become Australian citizens and thus eligible to vote. There is no doubt they will be on the electoral by the next Election. It is worth noting that a disproportionate number of NZ citizens live in Queensland.

Albanese will be hoping these people reward his Government for the change and become rusted on Labor voters. Tehan and Dutton will need to be careful not to antagonise them further as they did with Australian-Chinese voters.

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