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An oft-forgotten ticking time bomb

Per capita, New Zealand has one of the greatest diasporas in the world. Nick Teulon asks what we can do to protect expat Kiwis under the crush of Covid uncertainty.

The tale of the Great Kiwi Diaspora has been told many times.

It first gained mainstream awareness during the 2001 Knowledge Wave conference resulting in the founding of KEA (Kiwi Expat Association) the following year by Stephen Tindall and David Teece. Its mission: to leverage Kiwi expats' global networks and intellectual capital to advance New Zealand's export potential in association with NZTE.

The actual estimate of the Kiwi diaspora varies widely, conservatively starting at 15 percent of the resident population all the way up to 20 percent. In short, potentially one million expats.

On a per capita basis the diaspora ratio of 1:5 has historically been a thumb wrestle between Ireland and New Zealand on who takes gold. In times of global stability, diaspora is just a quirky word and statistic that quickly gets forgotten outside of sociology faculties.

However, during the past 20 years, many pundits and social scientists have wondered if this extreme ratio, by global standards, is a ticking time bomb. Covid-19 has thrust the story back into the limelight as expats have returned to the safety of family en masse with geo-political tensions rising and government balance sheets under pressure.

In 2014, I was involved with a conceptual challenger political party called The Expatriate Party of New Zealand after stumbling on the little-known secret - at the time - that there were over 200,000 Kiwis in Australia on the SCV444 visa (Special Category Visa). The SCV444 is rather unique in that it gives New Zealanders the right to live and work in Australia indefinitely but without a straightforward pathway to permanent residency, a status needed to access the National Disability Insurance Scheme, unemployment benefits and become a citizen.

As the fear of Covid-19 gripped the world in March, many Kiwi expats, particularly in Australia, finally faced up to the reality they were in some sense, stateless.

The major flaw of the SCV444 is it removes all friction setting up a life in Australia - you can even access a first home buyers' grant - but results in headwinds later on as one is still considered a temporary worker despite a lifestyle reflecting that of a permanent resident.

This issue has traditionally not evoked much sympathy from resident New Zealanders who often take the position "you leave, your problem". But as we are finding out now, it is their problem, as the consequences of return mass migration during an indefinite period of instability is putting additional pressure on an already-stretched system.

It may feel warranted to express frustration at returning expats, but they are only following predictable human instincts during a time of extreme uncertainty. The problem is, this is a complex issue that has been largely ignored by consecutive governments, which until recently failed to grasp the significant consequences of a growing diaspora. Unfortunately, weak policy has a way of rearing its ugly head in times of crisis.

In defence of the Ardern and Key governments, there have been some attempts at lobbying Australia to recognise rights for Kiwis living in Australia but with only small wins to boast about.

As the fear of Covid-19 gripped the world in March, many Kiwi expats, particularly in Australia, finally faced up to the reality they were in some sense, stateless.

It took a petition of 300,000+ signatures on Change.org and public sparring from Prime Minister Jacinda Ardern before the Australian government reluctantly agreed to reverse its stance and provide short-term financial benefits to furloughed Kiwis through JobKeeper.

JobKeeper ends in September, so anticipate a second wave of returning expats in October providing borders are open. If not, expect another Change.org campaign and stories of homeless Kiwis.

Lobbying Australia typically hasn’t been an effective strategy; culturally, they don’t welcome compromise. Nevertheless, the slow breakdown of the Trans-Tasman relationship may reverse given the uncertainties of Covid-19, the mutual benefits of a travel bubble, and concerns around trade wars.  

Instead of publicly pleading for Australia to be a good mate, New Zealand does have unexplored options up its sleeve to address the Kiwi expat conundrum. Namely a global retail sidecar to the New Zealand Superannuation Fund for those on temporary visas.

A global sidecar to the New Zealand Superannuation Fund could achieve a number of objectives that supports the global worker and mitigates balance sheet stress to tax-paying residents inside New Zealand.

Firstly, provide cover to temporary workers through an inbuilt master insurance policy. Secondly, an easy and seamless line to transfer Super back to New Zealand upon return, and finally, release of emergency funds that can be made available in times of extreme hardship or global catastrophe.

During the last week of March, I tested this hypothesis through the website NZSuper.com.au. One small Facebook Ad campaign directed at Kiwis in Australia resulted in 521 page visits with 131 signing up, signalling a clear need.

By my estimates there may be up to more than $10 billion of Kiwi expat superannuation on temporary working visas under management. A 1 percent management fee could net $100 million per annum to grow an expat insurance fund that provides protection to Kiwis abroad and helps mitigate the cost of repatriation and quarantine for black swan events like Covid-19.

The tale of the Great Kiwi Diaspora is no longer a tale, it is a reality with deep consequences that needs serious policy discussion that acknowledges our unique place in the global labour market.

* Nick Teulon is a technology analyst who was once a member of The Expatriate Party of New Zealand 

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