KEY POINTS:
Australia's 2020 Summit was slagged in some quarters as a "gabfest" - Kevin Rudd's organised love-in with 1000 hand-picked participants.
But if the Australian Prime Minister picks up and runs with just some of the ambitions that were generated last weekend during the summit's economic sessions the pressure to reform New Zealand's economy will intensify.
The participants - who included chief executives of major Australian companies, business organisations, unions and think-tanks - set a goal that Australia "should be the best place in the world to live in and do business".
They wanted Rudd's Government to set a target to increase GDP per capita so that Australia is among the top five countries in the world on this measure with strong stable economic growth and inflation between 2 and 3 per cent.
As a proposition it is remarkably like some of those that fell out of New Zealand's 2001 Catching the Knowledge Wave conference.
Back then Prime Minister Helen Clark adopted an ambition for New Zealand to get back into the top half of the OECD club on the same growth metric. But despite New Zealand scoring above OECD average growth rates for some of her time as Prime Minister, Clark's Government has failed to achieve its target.
There is a lesson here for Rudd and also the business participants who should hold the Australian PM's feet to the fire if they genuinely want Australia to achieve the targeted growth metrics.
Australia's share of global GDP has remained at 1 per cent for nearly 15 years.
If the Rudd Government wants to increase performance it should set a national scorecard and measure the economic policy goals against some firm intermediary targets.
The NZ Knowledge Wave organisers tried to get the Clark Government to publicly sign up to such a score card (although it has to be said the metrics were rather soft) but nothing substantive eventuated.
Unlike Catching the Knowledge Wave, where the University of Auckland and Clark's Government combined to invite leaders from small countries which had revolutionised their economies, and leading world thinkers and scientists in areas where New Zealand wanted to emulate success, the Rudd summit was purely domestic.
This is a reflection of Australia's greater self-confidence and depth of business and institutional leadership.
Many of the economic session participants are well known here.
Former Westpac CEO David Morgan co-chaired the session which also included among the participants New Zealanders leading major Australian companies such as Ralph Norris (Commonwealth Bank) and David Kirk (Fairfax) and Australians with a strong interest in the transtasman agenda like Ann Sherry (the former Westpac NZ boss now head of cruise shipping firm Carnival Australia and who once chaired Clark's Growth and Innovation Advisory Board), Geoff Dixon (Qantas) and Margaret Jackson (former Qantas chair).
But despite the web of business connections, New Zealand (judging by the archived webcasts I watched) did not really register even in discussions over the proposal to create a seamless national economy.
This is important as the Australasian single economic market (SEM) process - started by former Australian Treasurer Peter Costello and Finance Minister Michael Cullen - was geared to minimise the regulatory differences between Australia and New Zealand and result in an Australasian market where business could be done seamlessly either side of the Tasman.
During his term as Treasurer, Costello did much to rationalise the business regulatory framework in Australia which is complicated because of the balance between federal and state responsibilities.
What went on the table last weekend will centralise the power of the Australian Federal Government even further. Particularly as the single market agenda (think Australia's SEM not Australasia's SEM) turns inwards to cover areas like electricity, water, labour and carbon.
New Zealand ministers have been represented at meetings of the Council of Australian Governments on many policy issues.
But again New Zealand does not appear to have figured in last weekend's thinking.
Cullen will be hoping the Rudd Government sends high level representation to the next meeting of the Australia New Zealand Leadership Forum which is scheduled to take place in Wellington in June.
Clark has had a commitment from Rudd that the SEM process will continue. But there is a danger that New Zealand will slip from the Australian radar screen.
The avalanche of New Zealanders crossing the Tasman to work and reside does not help business confidence.
But a series of graphs contained in background briefing documents illustrates that New Zealand is by no means behind Australia on all key metrics. For instance, New Zealand has higher labour force participation rates (though the 2005 figure is out-dated); Australia is also suffering from a decline in productivity growth and will face a major demographic shift where 23.4 per cent of its workforce will be over 65 years by 2030.
Unfortunately the sub-text is that Australia's demand for a more flexible, highly skilled workforce to achieve its growth ambitions will inevitably mean our bigger neighbour will continue to source New Zealanders to fill its labour force gaps. This has the potential to intensify the ageing of our own workforce if countervailing measures are not introduced here.
The upshot is that New Zealand politicians will have to set a very bold public policy agenda if there is to be any hope of turning the tide back in this country's favour.
So far, the only politician (and a prospective one at that) to come within cooee of setting a national objective is former Labour Finance Minister Sir Roger Douglas (standing for Act) who has targeted 2020 as the deadline for New Zealand to catch up with Australia as well as setting out a policy suite to help achieve this goal. But there are also problems across the Tasman.
Decreasing infrastructure investments where the rate of growth of public sector investment has fallen significantly behind that registered in the 1980s; the capacity of Australian ports to deal swiftly with throughput still lags; this means that infrastructure bottlenecks are expected to limit export growth.
Then there are the road congestion costs which are forecast to rise in Sydney, Melbourne and Brisbane by 2015, major investments required in electricity generating capacity, and, the impact of pricing natural resources to reflect the full economic and environmental costs in a carbon-constrained world.
Australian broadband penetration is ahead of the OECD average but trails the leading countries. New Zealand does not figure in this comparison but rates above Australia on download speeds.
The briefing documents also suggest that more than half of Australia's growth since 1990 (50-60 per cent) can be attributed to productivity improvements.
New Zealand spends more than Australia on early childhood education and tertiary institutions as a proportion of GDP. But Australia has more people aged 25-64 than New Zealand who have attained a vocational or higher educational qualification which suggest this country is educating graduates for the Australian workforce.
Australian private sector expenditure on research and development is among the lowest in the OECD at 1.8 per cent of GDP in 2006 (NZ is 1.1 per cent of GDP) but New Zealand has a bigger research workforce on a per 1000 workers basis.
All this suggests that unless some major steps are taken to increase New Zealand's international competitiveness this country will morph into being simply a highly skilled labour pool for Australia.
