As borders blur in the age of global mobility, New Zealand finds itself in an awkward role: a polished launchpad for migrants eyeing bigger horizons across the Tasman Sea. What began as a symbiotic relationship between two close allies, rooted in the 1973 Trans-Tasman Travel Arrangement, has morphed into a one-way expressway to Australia. Recent policy tweaks in both nations, intended to boost economies and fill labour gaps, have instead supercharged a "stepping stone" dynamic. Winston Peters, New Zealand First leader and Foreign Minister, captured the frustration bluntly: "New Zealand is being used as a stepping stone into Australia. We take them in, train them, upskill them, look after their families, and then they emigrate." With record Kiwi outflows, 73,900 citizens departed in the year to August 2025, 58% bound for Australia, and nearly half of those applying for Aussie citizenship foreign-born, the maths is damning. This blog piece dissects how loosened rules on both sides of the ditch are turning Aotearoa into a migration mill for Oz, exacerbating brain drains and housing woes while inflating Australia's intake unwittingly.
At the heart of this flow is Australia's Special Category Visa (SCV, subclass 444), a frictionless entry for New Zealand citizens since 1973. Upon arrival, post-character and health checks, Kiwis get indefinite rights to live, work, and study Down Under, no sponsor required. It's a perk of the Trans-Tasman pact, but one with limits: no permanent residency (PR) status, no voting, and restricted access to welfare like unemployment benefits.
Yet the SCV's allure is undeniable. Australia's economy dwarfs New Zealand's, five times larger, with wages 26% higher on average, drawing professionals in healthcare, construction, and tech. By Q3 2025, a record 736,306 Kiwis held SCVs in Australia, up from pre-pandemic levels, fuelling a net migration loss of 30,000 to Oz in 2024 alone, the highest in over a decade. For migrants, it's a soft landing: enter NZ first (easier visas), gain citizenship, then hop the Tasman visa-free. As Emeritus Professor Jacques Poot notes, the linked labour markets favour Australia, but NZ bears the retention burden.
Enter Australia's July 1, 2023, bombshell: eligible Kiwis on SCVs for four-plus years can now apply directly for citizenship, bypassing the PR hurdle that snagged many pre-2001. Permanent residence is backdated for pre-July 2022 arrivals, and kids born in Oz to SCV holders from mid-2022 onward snag citizenship at birth. The Albanese government's olive branch, aimed at mending post-2001 tensions, has exploded applications: from July 2023 to June 2025, 92,000 "New Zealanders" sought Aussie passports, with 48% foreign-born.
Grants followed suit: up threefold in the year to June 2024, then sixfold to June 2025. Net flows from NZ to Australia hit decade highs, with 35% of 2024's Kiwi migrants to Oz born overseas, often via NZ's lighter touch on initial entry. Immigration Minister Erica Stanford downplays the "stepping stone" label, but Peters' "agree to disagree" on NZ reforms underscores the rift. This direct path not only eases Kiwis' transition but vacuums up NZ's immigrant talent pool, turning policy goodwill into a demographic siphon.
New Zealand's coalition government, under Christopher Luxon, is doubling down on inflows to juice GDP amid a sluggish economy. June 2025 brought the "Parent Boost" visa, up to 10 years for migrant parents, and a revamped investor visa luring high-net-worth types with laxer English and residency rules. Student perks? Work hours for internationals bumped from 20 to 25 per week starting November 3, 2025, under the "International Education Going for Growth" plan, aiming to swell enrolments and plug labour gaps.
Work-to-residency paths loosened too: new skilled migrant streams from 2026 reward five years' experience (two in NZ at 1.1x median wage) or local quals, despite NZ First's protests. These "smart, flexible" tweaks, per Minister Erica Stanford, target shortages in trades and tech. But critics like Peters see folly: easier residency begets citizenship, then a Tasman ticket. With net migration dipping to 10,600 in the year to August 2025 (from 173,000 peaks), the focus on volume over stickiness risks amplifying outflows; 73,400 Kiwis left July 2024-2025, only 25,800 returned.
Peters, ever the populist, has weaponised the narrative. At NZ First's 2025 conference, he decried an "unfocused" system: "Half the ones that have come here... have used New Zealand truly as a bolthole or stepping board to go to Australia." Invoking coalition dissent on September 2025 reforms, he pushes extending work visas without residency paths, train locals first, not "paper over cracks." Data bolsters his case: 35% of 2024 NZ-to-Aus migrants were foreign-born, up from population baselines, hinting at deliberate routing. Emeritus Richard Bedford echoes: NZ must make itself a destination, not a detour. Yet with unemployment differentials and wage gaps driving 70,000 annual Kiwi exits (two-thirds to Oz), Peters' values contract for migrants, pledging KiwiSaver hikes and anti-woke clauses, feels like a band-aid on a haemorrhage.
For NZ, it's a hollowing out: 69,100 citizens fled by February 2025, eroding tax bases and inflating housing strains from unchecked inflows. Australia gains, plugging sectors with trans-Tasman talent, but inherits unvetted "backdoor" entries, as pre-2001 critics feared. Globally, it spotlights migration's zero-sum traps: NZ's GDP push via visas subsidises Oz's labour market, while migrants chase opportunity without loyalty.
Fixes? NZ could mandate post-study work bonds or prioritise "sticky" skills; Australia, reciprocal checks on SCV inflows. Joint taskforces, per ANU's Alan Gamlen, could align incentives, retain talent via shared apprenticeships or wage parity pacts. Peters' domestic training focus merits traction: upskill Kiwis before importing. Digital nomad visas and values pledges might stem tides, but without economic convergence, the pond-jump persists.
New Zealand's mass immigration reforms, paired with Australia's citizenship olive branch, have forged an efficient stepping stone, 92,000 applications strong, half non-native. Peters' alarm isn't xenophobia; it's a plea for sovereignty in a porous pact. As 73,900 Kiwis (and their imported peers) eye Oz's brighter lights, both nations risk mutual erosion: NZ's vitality drained, Australia's controls diluted. Time to renegotiate the Tasman, not as rivals, but resilient partners. Otherwise, the stepping stone becomes a gangplank for all.
https://www.macrobusiness.com.au/2025/11/new-zealand-turns-migration-stepping-stone-to-australia/