The Australia-New Zealand Leadership Forum held in Wellington in May, was remarkably successful.
It brought together some 70 community, but mainly business, leaders from Australia and New Zealand, to discuss the nature and future of the relationship between the two countries.
It was successful because of:
* The strong representation from each country.
* The high quality of the presentations and discussions.
* The high degree of alignment in the Australian and New Zealand views.
* The clear agreement on the need for decisive actions, with urgency, to further develop the relationship.
* The strong impression the quality of New Zealand food and wines made on group of influential visitors.
The Forum’s conclusion on the need for urgent, decisive action, reflected shared view on the importance of the relationship to both countries. It agreed on the need to develop the relationship to its potential and expressed serious concern about the slow pace of progress since the successful CER initiatives of the early 1980s.
This slow progress was contrasted with the more rapid development of other countries’ trading relationships, especially in the Asia-Pacific Region, and the growing competitive pressures on Australia and New Zealand.
Recent initiatives from the two prime ministers and some other ministers, were acknowledged and supported, but there was an overriding sense of an opportunity lost, of failure to grasp the substantial potential to further develop and improve the relationship, and that these represented cost neither country could afford.
And, while the New Zealanders were concerned at the loss of high level jobs and head offices to Sydney and Melbourne, Australians were concerned about similar losses to Singapore, New York or London, which underlined strong sense that here were two relatively small and isolated countries with much in common and strong incentive to work together in an increasingly competitive and challenging world.
The Forum advocated the need to take more urgent steps to move beyond CER to develop single trans-Tasman economic market (Tasman Economic Area?) with common external border. Costly and inefficient inconsistencies or duplications in regulations and policies were highlighted for action. So was the potential to reduce inefficient duplication by moving to single, joint regulatory bodies. number of specific opportunities were identified.
Delegates suggested and received large measure of support for the concept of “two countries – one system”.
Overall, the Forum’s focus was pragmatic and realistic. The emphasis was on the big picture, single economic market with common border objectives, rather than preoccupation with particular policies or iconic issues.
Some issues will be relatively straightforward, uncontentious and easy to deal with. Others will be complex, contentious and time consuming, requiring significant community consultation and effective political leadership to resolve.
New Zealand must stay focused on the big picture benefits and not get bogged down in nickel and diming every element of detail.
A common currency, though considered ultimately desirable, is contentious, will take time and is down the priority list. Closer integration of capital markets is desirable and options should be worked on. There was, however, no demand to merge our stock exchanges.
Trans-Tasman taxation issues are problem, but moving to single system is impracticable so the focus should be on progressively removing the worst inconsistencies and working towards greater harmonisation.
What next?
The relationship has drifted post-CER. Developments have been piecemeal and limited. There has, until recently, been little sense of vision and no decisive leadership. Differences and impediments have been highlighted more than opportunities and New Zealand’s political constituency in Australia has weakened.
Given the global context of Australia and New Zealand we must work more closely, effectively and urgently to build the economic relationship and gain the benefits that come from closer economic integration.
Many New Zealanders seem oblivious to the tough, competitive world out there. This is not just about making things easier and more profitable for business. It is about better future living standards in both countries. We need to be focused and determined.
The Forum demonstrated strong desire for progress and willingness to be actively engaged. It is keen to work with politicians, officials and other interested community groups to turn conclusions into reality.
In dynamic, highly competitive world trade environment we must seize the opportunity. M
Kerry McDonald FNZIM is company director and chairman of the Bank of New Zealand.
