Copeland pushes ANZAC currency

In the light of the Reserve Bank’s decision to leave the official cash rate unchanged at 5.75%, United Future’s finance spokesman Gordon Copeland suggested today that it would be timely to look once again at the possibility of a monetary union with Australia.

“The recent rapid appreciation in the value of the $NZ indicates that there may well be a cost, particu-larly to exporters, in New Zealand continuing to maintain interest rates at around 1% higher than the equivalent rate in Australia,” he said.

“While that continues, overseas investors have an incentive to pile into the $NZ boosting our exchange rate even further. Commentators are even now beginning to talk about whether the kiwi dollar might achieve parity with the Aussie.

“These realities bring into focus once again the question of a monetary union. If the countries of Europe (except the UK for the moment) - many of whom have populations of 50 million or more - de-rive benefit by switching to a common currency, it is surely something that Australia and New Zealand with their relatively small populations should be considering,” said Mr Copeland.

“I appreciate that at first sight an Australasian Reserve Bank issuing a new currency for use by both countries and setting a single interest rate etc might seem radical and raise questions, and even fears, about a loss of Kiwi sovereignty. But the reality is that globalisation continues apace and as a small isolated nation of just 4 million people, we risk being left behind in a rapidly changing world.

“Sport aside, Australia and New Zealand have always been the best of friends and currency union does not automatically lead to a diminution in our national identity. As in Europe we can still have our own Parliament, write our own laws (monetary policy aside) and continue to challenge Australia on the sports field.

“Personally I am persuaded that it is an idea whose time at the 20th anniversary of CER has now ar-rived. I can envisage it as a first step which might eventually link Australasia into a common currency trading bloc with the rapidly growing markets of Asia. Alternatively the two countries could look at common currency with North America.

“The important point is however that we need to look now at taking the first step and that should be with Australia,” said Mr Copeland.

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