Fran O'Sullivan: When is Sam ever going to play it again?

It's showtime tomorrow for Australian Treasurer Peter Costello and NZ Finance Minister Michael Cullen as they get down to some serious decision-making to kick along their visionary proposal for a transtasman single economic market.

After a year of tortuous progress, moves to establish an environment where a New Zealand or Australian-based company can do business in the other country in a seamless fashion have run up against predictable hurdles. But what has so far been revealed publicly stops well short of the ambition laid out by Costello and Cullen in Melbourne last year for a true single market.

Back then Costello said: "I want to be ambitious. When we say we want a single market we should be ambitious."

Cullen said: "If you concentrate on the design of each jigsaw piece you never actually complete a picture. If you decide what the picture is you can make the jigsaw pictures."

"Sam" - as Qantas chairwoman Margaret Jackson memorably dubbed the proposal for a single Australasian market - is indeed in need of a "Just Play it" signal from the Australasian treasurers.

Predictably, the bureaucratic infighting since they laid out their vision has proved to be more complex than the Casablanca script.

Australian officials, who tend to view New Zealand as a simple extension of their home market ("just another Victoria"), have tended to play a dominant hand arguing for Australia to supply the muscle through single transtasman regulators.

New Zealand officials worry about the loss of national sovereignty and more "hollowing out" if this country simply tucks under Australia's arrangements for regulating competition and banking prudential supervision.

Costello is being pushed along by Australian banks and other companies with big investments here to hurry the process along so they are not confronted by extra compliance costs through conforming to New Zealand's regime every time they wish to open a business, mount a takeover or issue shares.

Cullen is being held back by a welter of New Zealand companies - particularly those enjoying dominant positions - and some institutions which have raised concerns that this country's economy will lose out if it simply becomes a branch office for Australia.

There are good arguments on both sides. The need for co-operation is heard more frequently in line with the proposals for mutual recognition. Many of the proposals in front of the two treasurers at their annual meeting tomorrow have this voguish concept at the forefront.

Take the competition arena. A joint statement issued after the Melbourne meeting put on the table joint decision-making on transtasman issues by competition authorities, improved co-ordination of authorisation processes and co-ordinated/combined institutional frameworks. But a subsequent report by the Australian Productivity Commission stopped well short of that. The commission's report basically reflected all-round intransigence.

If Costello and Cullen want to display some ambition and set firm timelines for action, this is one area crying out for political leadership.

Proposals to harmonise banking prudential supervision have similarly stopped far short of radical responses. Politically, this is a tricky one for Costello. The Australian banks which dominate New Zealand's banking sector argue they face unnecessary compliance costs here which add to their overall regulatory burden and ability to compete against much bigger international players who are muscling in on their home turf.

Cullen's interest is also domestic: Ensuring New Zealand is protected in the event of a major banking crisis which could destroy confidence in the financial system and knock percentage points off the country's GDP rate. It will take some tough talking to bridge the differences.

Even more important is the need for political courage so the single market concept gets off the ground. So far, it's been pure vanilla.