The Dominion Post
We’ve paid Aussies $1.3b
Did you know that we have paid the Australian government well over a billion dollars to meet the welfare costs of New Zealanders resident in Australia? Over 21 years from 1999-2000 to the present day, we have paid $1,268,373,000 to Canberra, according to Ministry of Social Development figures supplied to me under the Official Information Act, the first time the total has been made public. That doesn’t include superannuation payments, which are covered by a separate agreement.
Why did we pay? We have an open border, and people in each country can freely travel, live and work in the other country.
The open labour market has been highly prized by successive governments in New Zealand. When our economy stuttered a bit (and it’s done that often over the past 50 years), Kiwis have simply packed up and moved across the ditch, often to better-paying jobs and more sunshine.
This had the politically very useful effect of keeping unemployment numbers lower in New Zealand than they would otherwise have been. No government wanted access to Australia to go, which gave the Australians a handy lever.
The relationship started to change in the late 1990s. On December 13, 2000, the NZ Press Association reported that ‘‘New Zealanders moving to Australia would soon lose traditional rights to welfare benefits and healthcare in a secret trans-Tasman deal’’. It said the New Zealand government was preparing to let Australia cut permanent residency rights for Kiwis, which would mean that ‘‘they would not be entitled to benefits such as family tax relief, maternity allowances, childcare benefits, housing benefits and even education for their children’’.
By that time, NZ was already paying the social welfare benefits of expatriates in Australia, something it did not do for Kiwis in other countries. In the four years from 1999 to 2002, the bill for that was over $598 million.
Then the Howard government in Canberra tightened the screws further. Helen Clark, prime minister at the time, recalled to me this week: ‘‘Mark Prebble, who was the head of the Department of Prime Minister and Cabinet, advised me that the issue of the cost of welfare for New Zealanders living in Australia was vexatious to the extent that it had implications for freedom of movement across the Tasman.’’
She confirmed there was an implied threat, not made explicit, that freedom of movement would be withdrawn or modified, unless New Zealand agreed to further changes. ‘‘We took the view that we didn’t control their welfare system, but they were certainly exercised about the cost.’’
So New Zealand paid up, and accepted that Australia would restrict the right of Kiwis to access the range of benefits normally available to citizens and permanent residents.
Perversely, the cost to the New Zealand taxpayer has progressively declined over the past 20 years as fewer Kiwis in Australia have qualified for benefits. In the five years from 1999-2000 to 2003-04 the cost was $701m, and in the next five years (2004-05 to 2008-09) it was $350m, falling to $162m in 2009-10 to 2013-14.
The response to my OIA says we have now stopped paying, after a final payment of $55m for 2014-15 to 2021-21. Total paid: $1.268b.
In a post marking 20 years since the changes, OzKiwi, which fights for Kiwis in Australia, said Kiwis were now second-class citizens.
A final point: does the Australian government pay us for the benefits we provide their people living here? Nah mate. That’s not the Aussie way!