Experienced workers are expected to leave New Zealand for better wages and living conditions as the border reopens.
On Monday the Government revealed fully vaccinated travellers will no longer need to self-isolate from 11:59pm this Wednesday, March 2.
While the decision was welcome news for the tourism industry there's concern it could encourage Kiwis to up and move to places like Australia as New Zealand grapples with high inflation, low wages and high house prices.
Independent economist Tony Alexander told AM on Friday not only will people be leaving on OEs but workers with experience will also be looking to leave in search of lower living costs.
"Once we get colder in New Zealand naturally people will be thinking, 'I would like to go somewhere warmer' and then, of course, I think young people are going to be looking at interest rates going up in New Zealand that might not have gone up as much in Australia," Alexander said.
"So for those thinking about buying a house and getting a mortgage and of course all someone has to do is compare the wage rate they're getting in New Zealand with what you can get in Australia where labour demands are really strong. It's what we Kiwis have done over the generations. I think we are going to go through one of those periods where people hop over to Australia."
Alexander says in the short term we are likely to see Kiwis returning but that could change in the next few months.
"The impact is going to be felt not just in terms of the rate of growth in our economy overall being a bit less than what would normally be the case. When we get net migration numbers being negative - in fact, we are already minus 4000 over the past year - that's just going to reinforce some of the pullback in the housing market, so house prices fall a bit further but the big impact will be on employers. Already they are having record degrees of difficulty in finding skilled and unskilled people."
Alexander said while migration might help slightly, it's still looking like a tough few years for businesses.
"Businesses in this country have definitely got a big challenge on how they manage their business going forward," he warned.
Alexander said while Omicron outbreaks will make staffing issues worse, moving overseas will be the real issue.
"The bigger problem simply is going to be staff going to Australia. You've got lower house prices, lower cost of living, higher incomes, a greater renege of industries and some that are growing tremendously."
It comes as inflation reaches a 30 year high and the cost of living skyrockets.
Earlier on AM, independent economist, Cameron Bagrie said businesses are concerned.
He warned many are looking to increase their prices or lower their output, which will result in higher costs and fewer jobs.
And Russia's invasion of Ukraine is expected to put pressure on the cost of items such as gas, oil, wheat, nickel and fertiliser.
