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Jenny Shipley: Harmonisation of Australia & NZ

"Harmonisation of Australia & New Zealand"
Rt Hon Jenny Shipley
Speech to the Rotary Club of North Harbour, Takapuna
2 March 2001, 7.00am

You asked me to talk about the harmonisation of Australia and New Zealand, however the story of the recent past is one of disharmony.

Our relationship with Australia has taken a fundamental shift for the worse during the past year. Much of that came to a head earlier this week during Prime Minister Howard's visit.

The result is New Zealand becoming more and more isolated from our closest cousin and ally.

Labour is tearing apart the common strands and obligations we share with Australia. The gaps are visibly widening in defence and on our trade positions.

The new Social Security Agreement hammers another wedge in place which makes major changes to the common labour market. And for our exporters it sends a more alarming signal - that we are left behind as Australia moves ahead towards valuable trade deals.

Kiwis will now have the inferior status of "guest-workers" in Australia unless of course they take steps to become Australians as permanent residents. This, even though proportionately more New Zealanders are in employment in Australia than Australians. Those New Zealanders, on average, earn more than the average wage and their tax contributions more than cover the costs of welfare for other New Zealanders in Australia. The kiwi-bludgers image is a myth, and that was even acknowledged in Ministerial papers which Steve Maharey has refused to make public, but which were leaked to media.

Those who do require social welfare assistance in Australia will now have to wait around three years instead of two, because of the requirement to get permanent residency first. Official advice to the Government also says the agreement will lead to an increase in the numbers of beneficiaries in New Zealand. And as that happens, we will see young, skilled New Zealanders settling permanently in Australia because the agreement gives them every incentive to do so.

They are getting our skills, without the responsibilities.

At a time when there is a worldwide shortage of skilled workers this is a strategic blunder of the first order. It speaks volumes about the lack of long-term vision Labour has for New Zealand.

What National says is that New Zealand must become a much higher growth, higher skilled economy, so we become the destination of choice for talented Australians. That's our challenge - not capitulation that consigns New Zealand to be an exporter of talent.

Helen Clark and her government are out of step with how regional economies work in the global economy. As a result, they are creating a major problem for all of us.

Globalisation is a fact which even Helen Clark concedes, but she fails to see that increasing regionalisation is the balance to that process.

Clark - in words that are more spin than substance - says New Zealand needs to meet the challenges of globalisation by transforming our economy. What she fails to appreciate is that basic relationships in our region need to be transformed as well.

The track she is putting New Zealand on is toward isolationism and one which will exact a heavy price on countries that aren't team players.

Let's look more closely at our relationship with Australia because the wider that gap becomes the greater the threat to this region. New Zealand will only succeed as part of a successful region.

Take Social Welfare and benefit entitlement for a start.

>From July 1st 2002, New Zealanders who are resident in Australia will have to apply for permanent residence before they can receive Australian benefits. We retain our Special Category Visa access, which ensures that we can enter Australia as fast as we like. The Australians do want our skills, do want our brightest and best.

But the New Zealand Government proved itself incapable of defending the rights of less fortunate New Zealanders to the extent that WINZ's pamphlet Thinking About Living in Australia? is a minefield of misinformation.

For Ministers to sign off a document that now needs to be reprinted shows how little they understand about the detail or consequences of what they are doing.

New Zealanders who may need benefit assistance while trying to make a new life in Australia will feel booby-trapped by both governments, by an Australian Government which naturally wants the best, and by a New Zealand Government that doesn't want to know them or own up to them.

An open labour market between two countries connected as Australia and New Zealand are, should surely involve welfare agreements that place each other's immigrants on the same footing as citizens.

Even the most enterprising and well-qualified New Zealanders have down-patches as they set up a life in Australia. Now they will be forced to beat a retreat back over the Tasman to a government that's embarrassed by them, and didn't stick up for them.

We can never let New Zealanders be the Albanians of the South Pacific.

Trade negotiations mark another great disappointment.

National had hoped, when we were in office, that the CER agreement, which is 20 years old next year, would move on into a new and exciting phase. Free Trade Agreements were being negotiated between Australia, Singapore, and the United States in 1999.

It now appears that the United States and Australia could soon announce their own Free Trade Agreement. We are excluded. We've been cut out of the action.

And it is very clear that Australia can do that because New Zealand is regarded as more of a liability in a tripartite trade arrangement.

Let's not be naïve. Linkages are made between trade and defence, though diplomatic convention dictates that no-one admits to it.

If we are not prepared to pull our weight and contribute to a shared defence of the region, then we will suffer.

So, Australia has "parked" New Zealand as far as a free trade agreement with the US goes. We have been cut adrift because they would prefer to have a bilateral arrangement. They are leaving us out because we are being seen as a liability not an asset, the relationship is being seen as more parasitic than symbiotic.

Chile, was one of the other countries we intended to have in a free trade pact with Singapore, Australia and the US. But President Ricardo Lagos of Chile imposed a 12 % tariff on our dairy products exactly when Helen Clark was turning back from the summit of Mt Aconcagua.

Walking back down the mountain, she left her hopes for a Latin American free trade deal as well for a successful climb, both in tatters.

New Zealand and Australia can't even agree on a common tax regime. We're now far out of step in terms of corporate tax-rates.

Our corporate tax rate of 33 cents in the dollar compares with the Australian rate of 30 cents in the dollar from 1 July this year. It is currently 34 cents. And with tax rates for higher income earners at 39 cents in the dollar in New Zealand, it is little wonder that there is one-way traffic across the Tasman.

We are also now saying good-bye to the proposed merger of the New Zealand and Sydney stock-markets.

The ingredients for a successful and viable economy today are lower tax rates and a better education system. This government has upped the tax-rate and yet persists with dumbing-down our education system.

California's Silicon Valley wasn't created by subsidies from Washington. The French and the Russians tried that with indifferent success. But Silicon Valley is replicable on a smaller level, it can be imitated; as it has been at Bangalore in India and in the Silicon Fen about Cambridge University in Britain.

You can get an IT cluster from three elements which we can replicate:-a highly networked community, a world-class university or research community and innovative financing.

But it does need regional engaged-ness. It does require a regional transnational economy sustained by multi-lateral and multi-dimensional linkages. You can't build an IT cluster just for the economy of a small nation-state.

Helen Clark should be less selective about the examples she takes from Ireland. She should actually go to Ireland and have a real look. Ireland is engaged with the EU. It identifies itself with its own geo-region.

We don't. Under this Government we are becoming more and more isolated.

Regarding Defence, it is clear that New Zealand has dropped off everyone's radar screens. We just don't rate.

Our combat airforce, and Clark's new standards of transparency, nose-dived this week. She privately told our "closest" ally, Australian Prime Minister Howard, that our air combat force is now virtually inoperable.

Fortunately, outraged Air Force chiefs let it be known that Clark's shamefaced Cabinet had secretly agreed to measures which mean it would take 6 months before the Skyhawks could be combat ready.

This is one step short of scrapping them - watch for the announcement!

Another critical decision - to upgrade the surveillance capability of our Orions - appears doomed too. We will soon have no maritime surveillance capacity, which means we won't even be able to maintain the biosecurity of our region the way we would like to.

Labour is making us pay a high price for its isolationist principles.

Some would say we are right to be isolationists refusing to be bullied by Australia and the United States. It has some superficial appeal to our nationalistic instincts, but take a closer look.

Under Clark, we are swimming against the tide. We are ignoring the fact that globalization demands multi-lateral, multi-dimensional links between countries in partnerships. You cannot be just close partners on one or two matters and then not on the team for a whole range of others, especially when you're neighbours.

We are living in an age when globalization and regionalisation reinforce one another, balance one another, to create the current world order. The nation-state is now a team-player within a regional team.

The EU, the Mercosur Common Market in Latin America, the NAFTA agreement and ASEAN are examples of the kinds of teams that are being formed regionally. World economic political and military relations are now conducted on a regional basis. The sort of linkages which New Zealand used to have within the British Commonwealth for defence and trade, are now being carried out within regional systems.

The problem is that the New Zealand Government doesn't know how to live in a community of nations. We exist in no immediate community of neighbours, nor are we showing ourselves disposed to do so. In this age of increasing regionalisation, nations have to share partnerships and responsibilities on a variety of levels.

Labour's mistake is that it is trapped within an outdated definition of nationhood. It is stuck in the mid 20th century with the model of the isolationist sovereign nation-state, with just the United Nations as the main instrument for geo-governance. According to this view Australia is therefore a country we have to define ourselves from or we will end up getting absorbed by it.

Regionalisation doesn't mean however that national identity or that the nation-state are threatened by stronger powers. It doesn't mean absorption and domination by the Big Boys like Helen Clark thinks. This isn't about uniting with Australia or sharing a common dollar.

The trend is rather towards a reinforcement of the state in facilitating and managing regional and global governance. And it's about teamwork and cooperation between states to solve the problems of their region.

It's about a more level playing field for smaller nation-states like New Zealand which have skills, determination and ambition to offer its immediate neighbours and the world.

New Zealand isn't a dagger aimed at the heart of Antarctica as David Lange described it, to justify his isolationism. Nor are we the geological and demographic equivalent of a boomerang whirling back to smack Australia in the face. Multi-lateral partnership with Australia should mean we negotiate terms to our own advantage, instead of from the defeatist stance we're negotiating from right now.

If New Zealand is to have a successful and reciprocal relationship with Australia, it has to identify with our geo-political and economic region.

We have to accept that the best unit for engaging positively with the forces of globalisation, and providing some balance and reinforcement to it, isn't the lone nation-state, but teams of nation-states who are neighbours, and of comparable development, playing on the same side. As the Australian TV show theme said 'Everybody needs good Neighbours' - under this Government we're not seen to be doing our bit.

ENDS


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