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"Making it easier to do business"

14 May 2004

"Making it easier to do business"

The tax break for Australian wine producers announced in Canberra this week demonstrates the distance still to go to get the trans-Tasman free trade agreement working properly.

For ordinary business people, today’s Australia-New Zealand Leadership Forum will be judged successful if the conditions for doing business on either side of the Tasman are made easier, said Michael Barnett, Auckland Chamber of Commerce CEO.

The key issues needing to be actioned are to ensure that:

Reporting and compliance cost standards are the same in both countries; SMEs can register in one country and do business easily in the other; Making sure neither country introduces regulations and legislation that penalises business in the other country.

“Australia’s introduction of a wine tax on the eve of the talks is a distraction. If the CER system was structured properly, it would never have happened, he said.

Some commentators might be saying Australia’s timing to introduce the tax was done deliberately to show Australian wine producers that “their” government will protect them against competition from more efficient Kiwi cousins – a stab in Kiwi backs.

However, Mr Barnett said he tended to the view that when Australian wine growers lobbied for a tax break, Canberra’s Treasury gave no thought to the CER arrangement, and that this lack of strategic thinking is the loophole that needs closing.

Talk of a single trans-Tasman currency was another distraction, suggested Mr Barnett.

“We need to get the horse in front of the cart. Only when the conditions are created that make it easy for Australasian businesses to operate in each other’s patch, will we have the environment that will justify a single currency being considered.”

Mr Barnett noted that when a single currency between Australia and New Zealand was debated a few years ago, the idea of both countries linking their currency to the United States dollar was raised. “We still need to have that debate too,” noted Mr Barnett.

“Instead of focusing on the single trans-Tasman currency issue, we need to walk the talk to achieve a truly aligned regulatory trans-Tasman environment” said Mr Barnett. He hoped this issue would be top of the agenda at today’s business leaders’ forum.


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