English has finger on the Aussie pulse

WHEN it comes to predicting the fortunes of the Australian economy, don’t ask a highly trained Aussie economist, ask a New Zealander.

Deputy Prime Minister and Finance Minister Bill English says the net movement of his countrymen and women has proved a great indicator of Australia’s relative economic fortunes.

‘‘New Zealanders looking for opportunity have a better grip of this economy than Australian economists,’’ he told Citi’s annual investment conference in Sydney on Thursday.

New Zealand is experiencing record high net migration and population growth, largely the result of New Zealanders choosing not to seek work in Australia.

‘‘New Zealanders looking for work opportunities have a more consistently negative view of those than in a generation.’’

‘‘We’ve just had our sixth month of net inflows from Australia and that’s never happened before.

‘‘The job of the deputy prime minister is to greet each one of them at the airport. It used to be minus 30,000 and now it’s plus 300.’’

That’s good news for New Zealand. ‘‘It’s pretty important. Growth is people times productivity,’’ English says.

But the slowdown in migration is also creating potential issues for Australia, which has previously benefited from the growth boost that the flow of migrants has provided to the economy.

The Reserve Bank of Australia recently lowered its population growth forecasts as a result of less net migration from New Zealand.

This would reduce ‘‘growth in demand for goods and services, as well as

opportunities the economy’s capacity to supply those goods and services,’’ the RBA said.

While both Australia and New Zealand have been exposed to China, their fortunes have been tied to different facets of its growth. Australia’s economy is more tied to Chinese investment, which consumes iron ore and coal, while New Zealand, a large exporter of milk products, is more dependent on the consumer.

New Zealand expects to see growth in tourism, IT services and agriculture that will allow its economic fortunes to diversify away from China.

English said some parts of the New Zealand economy stood to make huge gains from the Trans-Pacific Partnership trade deal, citing an example of apple growers.

‘‘American apples are crap. With no tariff we are going to outsell those guys easily.’’