Some tough challenges face whoever forms the next government.

BNZ Chief Economist Tony Alexander says not the least of these will be stopping the growing tide of New Zealanders deciding the grass looks greener across the Tasman.

He says this country is already facing a 15 percent increase in the number of people leaving the country.

When New Zealand's manufacturing export weakness begins to feed through into other sectors of the economy, such as housing and retail, and the labour market loosens, Mr Alexander says a lot of people will move to Australia.

He says the incoming government will have to keep a careful eye on that and try to find ways to entice New Zealanders to stay home and adds it will have to deal with quite a few other chooks coming home to roost.

He says the country's external accounts are in a terrible position, meaning the value of the NZ dollar will drop sharply.

Other problems include over-valued house prices, shortages of skilled and unskilled workers, record debt servicing ratio in the household sector and the worst household savings rate in the OECD.

Mr Alexander says at the moment the pain is only being felt by non-agricultural exporters. Farmers, retailers and the housing market are fine at the moment - but he warns that cannot last.