KEY POINTS:
At least six Australian Cabinet ministers led by acting prime minister Julia Gillard will turn up for a major gathering of about 80 Australasian leaders in Wellington next weekend to debate the future of the transtasman relationship.
They will outline priorities for the new Australian Government at what will be the fifth annual meeting of the Australia New Zealand Leadership Forum.
The big muster of Australian Cabinet members will be read by New Zealand and Australian business people as a positive sign that Kevin Rudd's Labor Government is committed to a strong bilateral relationship.
Actions, however, speak louder than words. The business sector will also want to see a positive commitment not only towards the single economic market - enabling business to be transacted seamlessly across the Tasman - but also towards exploring genuine transformational measures such as currency alignment, controversial taxation issues, common third-party free trade pacts and common climate change platforms.
The Cabinet panel is also expected to canvass progress on the work done by Ross Garnaut on climate change issues; its "rollback" of the workplace reforms instituted by the Howard Government; the comprehensive tax inquiry that is now under way; and what is being promoted as Rudd's "big idea" for the region - an Asia Pacific community by 2020.
The single economic market agenda - an initiative launched by Finance Minister Michael Cullen and former Australian Treasurer Peter Costello to establish common regulatory frameworks for transtasman business - has come a long way since the pair set out their objectives in January 2004.
Many of the elements are non-contentious. But a clamour is starting to emerge within business to explore genuinely transformational policies.
A campaign by previous forum leaders for a true single economic market surrounded by a common border resulted in push-back from political leaders on both sides and replacement leaders being found.
But as Australia's investment footprint on New Zealand continues to increase, there will be more calls to either go a step further and cement the linkages, or for New Zealand to strike out on a more competitive and independent track.
What's on the agenda
The Australian Government's agenda will dominate the opening session, which will then segue into key economic priorities. Cullen will outline his priorities for the single economic market - the carbon challenge, trade and investment and strategic issues.
What's not on the agenda
The "little elephant in the room" is some potentially negative impacts of the Australian buy-up of New Zealand. Australian investment in New Zealand doubled in the five years between 2001 and 2007 to reach $79 billion. But many New Zealand business people are concerned companies and advisory firms have been hollowed out with control being administered from Sydney or Melbourne.
On the governmental end there have been stresses over tax issues. The IRD launched claims against Australian banks and there have been investigations into alleged profit-shipping, and unions have claimed workers are paid less by Australian-owned companies.
These issues are unlikely to be confronted but may come up in backroom discussions.
What should be on agenda
The global food crisis: New Zealand and Australia can take leadership on pushing for freer farm trade at the WTO. New Zealand's long-run economic prospects are quite rosy given the dire outlook for food supplies as the world population escalates. This factor is not appreciated sufficiently by Australian elites.
The credit crunch: The New Zealand Reserve Bank fought off an attempt to administer Australasian banking prudential supervision by a single regulator. With the credit crunch in full swing, the wisdom of governor Alan Bollard's subsequent moves to bolster the capital of New Zealand-domiciled banks is clear: the Australian parent banks have not "turned off the tap". But there are still common challenges which should be confronted.
Taxation: Leading Kiwi accountants such as PriceWaterhouseCoopers' John Shewan were chastised by Costello for pushing for mutual recognition of imputation or franking credits. But as the transtasman investment environment gains greater connectivity this issue cannot be left off the table.
Currency: National's John Key pushed a common currency at the last forum and has continued to do so. His contention is Kiwi business would benefit through lower transactional costs. Opponents have pointed to negatives, such as the end of an independent monetary, loss of economic sovereignty and a reduced ability to insulate ourselves from any shocks befalling the Australian economy.
Customs union: The Treasury asked the New Zealand Institute for Economic Research to explore a transtasman customs union, a free trade area with a common tariff. There are revenue implications on both sides and difficulties posed by the varying degrees of protection.
