Nearly 54,000 people left for Australia in the year to September and more than 170,000 have joined the trans-Tasman exodus since National came to power in 2008, Labour says.
"That's more than the population of Hamilton, or more than the populations of Dunedin and Invercargill combined," finance spokesman David Parker said on Friday.
Citing latest immigration statistics, he says of the 53,729 who left in the year to September 21,589, or 40 per cent, were in the 18 to 30 age bracket.
In September alone, 3714 people left for Australia.
Mr Parker says the government is in denial about the shrinking non-primary manufacturing sector and the high level of youth unemployment.
"New Zealand can't afford to continue to lose skilled workers every week to Australia," he said.
"The government has had four years to deliver on their promise to bridge the wage gap and stem the flow. They have failed."