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Australia and NZ Govts Should Listen To Business

“The New Zealand and Australian Governments should listen to what the business community is saying about CER”, the Chairman of the Australia New Zealand Business Council (ANZBC), David Truscott, said today when releasing a report prepared for the council by the New Zealand Institute of Economic Research.

The report, commissioned by the ANZBC, is entitled ‘Stepping Towards a Borderless Market?’ and was prepared following interviews with companies having markets or investments in both countries. The study was undertaken with financial assistance from a number of organisations, including ASB Bank Ltd, Business New Zealand, Fonterra Co-operative Group Ltd, IAG New Zealand Ltd, Restaurant Brands Ltd, Telecom NZ Ltd and NZIER.

“The study confirms the advice which the council has been giving the two governments for some time”, Mr. Truscott continued, “that there is benefit to be gained by both countries if the further development of CER into a true, single market is pursued. NZIER estimates that, based on merchandise trade alone and ignoring the burgeoning trade in services which is difficult to measure, the benefits of a single, borderless market could be as high as $576 million per annum, while the costs might amount to only $128 million, once only.”

“The governments are encouraging co-operation between industries in the two countries in the development of other export markets.

“This is good, but more needs to be done in their domestic market if New Zealand and Australian companies are to be best able to take on the world. Those interviewed in the course of the study have highlighted a number of policies which are making it difficult for them to fully develop the CER market and therefore maximize their international competitiveness.

“They do not consider that for the past 10 years there has been any coherent strategic plan on a way forward for CER. What has emerged are trade agreements, legislation and codes of conduct that have led to a mixture of policies, some of which support enhanced integration of the two countries’ markets and some of which work against such integration’, Mr. Truscott said.

“In question are the present rules of origin, our divergent tax regimes, especially the approach to superannuation and policies towards trans Tasman migration, aspects of the Trans Tasman Mutual Recognition Arrangement, its exemptions and how it inter-acts with other regulatory requirements, and quarantine. The approach should be one where internal regulation in each country takes account of the trans-Tasman relationship.

“These issues need to be addressed if our industries are to get the maximum benefit from the co-operation now being encouraged. Unnecessary costs need to be squeezed from the business scene”, Mr. Truscott said.

The study also suggests a single body to administer competition law in the two countries.

“CER has come a long way in 20 years. Much of the benefit of closer economic integration has been achieved. But the study shows that there are remaining benefits to be gained and these far outweigh the costs. We have today asked the governments to bite the bullet on the remaining impediments to a truly single trans Tasman market,” Mr. Truscott concluded.

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