NZ 'caved in' on changes by Australia

By AUDREY YOUNG political reporter

New Zealand buckled in to accepting big changes for Kiwis crossing the Tasman for fear of consequences from Australia, official papers suggest.

Officials believed Australia had not justified its case to change the social security arrangement, but feared that unless New Zealand gave in, damage to the relationship would spill into other areas.

And the Treasury argued that the moves would create "two classes of New Zealanders.

"If New Zealand fails to satisfy Australia's concerns, we run the risk of souring the relationship," warned Don Greenfield, the manager of international policy and agreements in the Ministry of Social Policy.

"This could jeopardise work recently agreed to by Australian and New Zealand ministers to increase the level of cooperation under CER."

Prime Minister Helen Clark and her Australian counterpart, John Howard, announced the changes on February 26 as a "win-win" deal.

The changes ended automatic permanent residency in Australia - though not travel rights - and treat New Zealanders the same as other migrants for social security purposes.



The papers were released yesterday. "This 'immigration filter' will effectively create two classes of New Zealanders, those who hold Australian permanent residency and those who do not," a Treasury paper warned last July.

"The former will continue to have access to health, education and social security in Australia, while the latter will no longer be able to access social security and may have reduced access to health and education."

The ministry feared an underclass of New Zealanders could be created.

"Australia has not substantiated its position," said another Treasury report dated August 18, 2000.

This followed a joint report by the Australian Department of Family and Community Services and the NZ Ministry of Social Policy.

And it said New Zealanders in Australia already more than paid their way.

Their contribution of more than $2.5 billion in income tax a year was substantially more than the cost of their social security and more per head than other Australian residents.

Australia estimated it paid $A930 million a year in social security to New Zealand citizens (including those with Australian citizenship).

New Zealand reimbursed Australia annually; $125 million in the financial year to June 2000, and $89 million and $79 million in the previous two years.

National deputy leader Bill English said Helen Clark had caved in to Mr Howard.