Latest CER developments
New Zealanders will be able to repatriate up to billions of dollars of locked Australian retirement funds in latest CER developments
Australian and New Zealand ministers meeting in Melbourne celebrated the 25 th anniversary of Closer Economic Relations and marked further progress towards creating a trans Tasman Single Economic Market.
Trade Minister Phil Goff, Agriculture Minister Jim Anderton and Commerce Minister Lianne Dalziel met with their Australian counterparts, Trade Minister Simon Crean, Agriculture Minister Tony Burke and Superannuation Minister Nick Sherry on Friday.
"We celebrated the enormous progress made under CER which has seen two-way trade between our countries grow by an average of 9 per cent a year to more than $21.5 billion a year," Phil Goff said.
"The WTO describes the CER agreement as the world's most comprehensive, effective and multilaterally compatible free trade agreement. But one of its greatest strengths is that it is a dynamic agreement, which continues to make forward progress.
"Perhaps the most important single issue of agreement for ordinary New Zealanders was that on progressing retirement savings portability between the two countries," Phil Goff said.
"In Australia, employers must contribute 9 per cent of wages into a locked-in retirement savings account under the Australian Superannuation Guarantee (ASG). New Zealanders who have worked in Australia and accumulated compulsory pension contributions under the ASG are unable to repatriate their savings to New Zealand before reaching the Australian age of retirement.
"The introduction of Kiwsaver in July 2007 presented an opportunity to address this problem. It has been judged as mutually compatible with the ASG, allowing savers to transfer their accounts between countries.
"Superannuation Minister Nick Sherry estimates that of the $13 billion in 'lost accounts' under the ASG, a considerable amount of this money will belong to New Zealanders who have returned home," Phil Goff said.
- With portability, he has undertaken to have New Zealanders' accounts in the Australian system proactively identified.
- This would be a huge bonus for many New Zealanders.
-A memorandum of understanding to formalise portability arrangements will be signed in October. Legislation in 2009 will then bring the proposed portability regime into effect," Phil Goff aid.
The CER Ministerial also marked progress in other areas including agreements to enable resolution of trans-Tasman civil disputes and more effectively and at lower cost; the facilitation of opportunities for businesses to raise capital on both sides of the Tasman at lower cost; and the re-negotiation of the Australia-New Zealand Double Taxation Agreement.