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Statement By Co-Chairs Of The ANZ Leadership Forum

JOINT STATEMENT BY CO-CHAIRS OF
THE AUSTRALIA NEW ZEALAND LEADERSHIP FORUM

Margaret Jackson, AO and Kerry McDonald

Wellington, 16 May 2004

The two sides came together in this historic initiative because we are strongly committed to developing the Australia New Zealand relationship beyond where it is today. The current relationship – strong and robust as it is in many areas – is not sufficiently developed to support the competitiveness and viability of the two countries in an increasingly competitive and dynamic world.

In the 19th century we were one Australasian economy but for nearly three quarters of the twentieth century we drifted apart. NAFTA, and more particularly CER in 1983, saw us begin the move back together economically and this has substantially benefited both economies to a much greater extent than people generally realise. In the lead-up to Australian Federation in 1901 New Zealand had the opportunity of political union and decided against it. This was a moment in history that has passed and political union was not on the agenda.

Economic union, however, was the subject of sustained debate, in the context of the risks of not moving further, and faster, in this direction. A number of participants referred to the example of the European Union, where political and economic cultures with many more differences than exist between New Zealand and Australia have come together in a largely unified whole economic zone. Others noted a key difference was that the EU is made up of a number of large and small economies, not just two of different sizes. But all of us recognised, that in global terms, especially in our region with the rapid growth of China’s economy, the CER economies together are still relatively small and that Australia faces many of the same challenges that new Zealand does vis a vis other large economies.

In the era of globalised commerce, economic and commercial regulation is increasingly becoming borderless and much more efficient and nationality is not necessarily compromised by it.

We all know about the frustrations and cost of different regulatory systems within and between New Zealand and Australia, and barriers – including in the private sector (eg banking) – that make establishing a business of one country in the other more difficult and costly than it needs to be. Some work has been done in some areas – and we are pleased to see a Joint Therapeutic Products Agency being established which will be of benefit to consumers as well as contributing to the process of integration – but it is not enough.

We spoke frankly with each other about the concerns some have with the concept of monetary union between a larger economy and a smaller one, and we recognise that there are broader monetary and fiscal concerns that would need to be addressed as well as the question of what single currency we would have. But we also know that not having the same currency imposes costs on businesses and people who have to cope with exchange rate fluctuations when travelling. In fact the country disadvantaged on the latter is, and has been for a long time, New Zealand.

What we do not want, however, is to get hung up on such “icon” objectives when there is a lot that can be achieved through greater harmonisation and greater commonality of approach in a considerable range of areas, some of which are moving forward, some of which need, in our view, a much stronger push. And some – such as a common immigration border – have to date hardly reached the agenda stage.

We acknowledge the efforts of the Australian and New Zealand Ministers to consider some significant steps forward, including on the concept of a single economic area.

We see it as our role to interact with government and with broader business and union interests and the community, to help progress complex policy issues.

In this context we consider that we should:

- accelerate the work already begun on a Single Economic Market with a view to creating a seamless trans Tasman business environment

- explore the scope for a common border for Australia and New Zealand

- enhance the skills base of both countries through joint efforts with respect to standards, training and reducing compliance costs

In each sector that our discussions traversed participants proposed a range of possible initiatives of a more targeted or precise kind, eg harmonisation of aviation security and quarantine measures, common labour market regulations, a single entity and set of rules on intellectual property, harmonized securities and companies regulations, coordinated oceans management and consistent security requirements for goods and people. The two steering groups will consolidate this set of proposals and, working with the two governments, will take them forward. Issues which participants felt were worth exploring but were not necessarily in a position for immediate action will be subject of further exchanges. The simple act of exposing these issues and having them talked about in a broader context has ensured that they will remain ongoing areas of attention for the forum.

This forum brought forward a number of areas where we have an opportunity to put to decision makers in both the government and private sector options for moving towards a truly integrated economy and society. We will be pursuing these proposals over the coming year and be reviewing progress in our next meeting in Australia in 2005.

Kerry McDonald
New Zealand Chairman

Margaret Jackson
Australian Chairman

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