New Zealand and Australia: Best Friends in Changing Times

Within her initial statements after New Zealand’s new government was formed in mid-October, Prime Minister-elect Jacinda Ardern expressed her intention to quickly make arrangements to travel to Australia. Australia is New Zealand’s most important bilateral relationship, and for a relatively new player in New Zealand politics like Ardern (who only became the Labor Party leader in August), promptly establishing a rapport with the Australian government will be an essential component of the job.

Until it was recently overtaken by China, Australia was New Zealand’s largest trading partner; however, the country’s security and cooperative infrastructure remains based primarily around Australia. New Zealand’s distant geography and small population make it heavily reliant on its larger neighbor. Of course, the two countries maintain strong, almost familial, cultural ties, usually exemplified through an almost incessant teasing of one another. When former Kiwi Prime Minister Mike Moore stated that “the Australians are our best friends, whether we like them or not,” he was making both an amusing quip and expressing the reality of New Zealand’s place within global society.

Since the early 1970s, the main structural bond between the two countries has been driven by the Trans-Tasman Travel Arrangement (TTTA), an agreement that allows Australian and New Zealand citizens to freely live and work within either country. The agreement initially bestowed de facto citizenship for those wishing to move between the two countries, with only the ability to vote being withheld. Currently around half a million New Zealanders live in Australia, and around 60,000 Australians live in New Zealand. However, in recent decades Australia has progressively eroded the rights of New Zealanders living in Australia, an issue that was increasingly of concern to previous Prime Minister Bill English, and something that Ardern also flagged in her initial days as prime minister-elect.

In 1994 Australia introduced the Special Category Visa (SCV) for New Zealanders. The SCV was automatically granted to New Zealanders upon arrival in Australia without requiring any application, yet it indicated a major shift in power relations, from an agreement between two states, to one between a state and an individual. It gave the Australian government something they could alter or cancel far more easily than a bilateral agreement.

By 2000, major shifts in the rights of New Zealanders began to surface when Australia stipulated that holders of SCVs would need to live in Australia for two years before they would be able to access unemployment benefits. In early 2001 changes were made to the SCV that meant holders who arrived in Australia after February 26 that year would be limited in their ability to obtain Australian citizenship, removing an automatic pathway and shifting New Zealanders into the competitive pool for skilled migrants with all other nationalities. Those who arrived after February 26, 2001 were also deemed ineligible for most social security benefits, with the definition of "resident" being changed in the Social Security Act to exclude New Zealanders (although access to Australia’s universal healthcare system remained). This effectively created two classes of New Zealanders in Australia.

In 2005 those New Zealanders who arrived after February 26, 2001 were denied access to Australia’s student loan scheme. Although these New Zealanders were still classed as domestic students, they were required to pay their university fees up front. This remains the status quo; however, in May of this year the Australian government attempted to pass legislation that would classify New Zealand students as international students, a move that would see course fees for New Zealanders increase up to four-fold. The bill was rejected by the Senate, but has the potential to resurface later on.

At the time of the proposed changes, then-Prime Minister English said he was unhappy with the trajectory Australia was taking toward the rights of New Zealanders in Australia, noting "significant uncertainty about the Australian attitude towards that traditional arrangement." He further added, ”We want a serious discussion with them about where they're headed with this policy, rather than announcements that are made either without telling us or at short notice."

English rejected the idea that New Zealand would create retaliatory barriers for Australians in New Zealand. However, Ardern has not ruled out the possibility of a retaliatory policy, commenting that “if we do find New Zealanders aren’t able to access tertiary education the same way as Australians currently do, there will be flow-on effects here.”

This latest attempt to strip New Zealanders of rights within Australia is particularly galling for New Zealand as the Trans-Tasman Travel Arrangement (TTTA) is essential for the development of local skills. Although New Zealand is a developed country with excellent institutions – and it loses a great number of people to greater opportunities and higher wages in Australia each year – the prospect of New Zealanders returning with enhanced abilities and capital they couldn’t otherwise obtain in New Zealand is a major component of the agreement’s appeal. 

Defending New Zealanders’ ability to be treated as domestic students in Australia – as well as the other rights of New Zealanders in Australia – is a national interest. For the new prime minister, convincing Australia that the familial bonds between the two countries are of continued importance, and attempting to reverse the trajectory of Australia’s erosion of the TTTA, will be major component of her incoming agenda.