Leadership forum fails to tackle big issues

Foreign Ministers Winston Peters and Alexander Downer at the Australia New Zealand Leadership Forum. Picture / Paul Estcourt

Australia and New Zealand are still a long way from the goal of a single economic market despite worthwhile progress in transtasman business, says James Strong, co-chair of the Australia New Zealand Leadership Forum.

A gathering of more than 70 business leaders, ministers, officials and academics from both sides of the Tasman in Auckland on Friday and Saturday could reflect on a number of incremental gains in removing barriers to business between the two countries.

But the big issues of a common currency, common border, a single capital market and the mutual recognition of franking/imputation credits remained parked in the too-hard basement.

"The networking was wonderful but when I go back on Monday I don't know what I could say we have accomplished or are likely to accomplish next year," said one participant.

"What's the point of having a gathering like this and not debating the big issues?"

The New Zealand co-chair, Kerry McDonald, said it was a matter of prioritising.

"It's not a matter of saying some issues are too difficult so we drop them altogether. But they may require more work or the timing is important. "Mutual recognition of franking credits, for example, that will take a while, but there are a whole lot of things that can be done in the meantime."

Strong said: "What this forum is about is trying to make these two countries combined stronger and better able to compete internationally. At the moment we are impeded by inefficiencies between the two economies. So it is about unpicking that as fast as we can."

McDonald cited collaboration on the new international accounting standards, which had resulted in a single package of accounting measures for both countries, reducing compliance costs.

"The same has emerged in a number of border issues and competition issues and we now have agreement on the mutual recognition of securities offering documents."

In many cases there are now common standards for products between the two countries. "A New Zealand company doing a production run can do it to one standard for both countries and can then compete offshore on the basis of higher volumes and lower costs," he said.

But despite such goals on the scoreboard, the sense of the forum - the third of its kind - was of an urgent need for this part of the world to get its house in order to cope with the competitive challenge and market opportunities presented by the dynamism of Asian economies.

The concern is that while both countries are intent on doing trade deals with other countries they are not doing the hard yards to improve their competitiveness.

Firms are quietly outsourcing to benefit from the lower manufacturing costs in China or software costs in India. But the resources freed up are not being redeployed in higher-value activities.

People who had taken part in the earlier forums said the latest event had a better, less fractious, atmosphere. The first, two years ago, had been marked by sparks flying over defence.

This time the extent of collaboration between the two Governments was on display, as Australian Foreign Minister Alexander Downer, his New Zealand counterpart Winston Peters and Defence Minister Phil Goff took time out from the programme to confer over the latest reports from the Solomon Islands.