Top Aussie trio declare: time for NZ cuddle-up

By COLIN JAMES

New Zealand is too small and has to get more aligned with Australia, say three Australian chief executives of major New Zealand organisations.

"If we [Australian and New Zealand] don't get it together, it's going to be a Texan boot or something like that that kicks us," TelstraClear CEO Rosemary Howard said yesterday.

She was speaking at a conference organised by Victoria University's Stout Centre and Institute of Policy Studies (IPS) and part-sponsored by the Australian High Commission and Qantas.

With Howard on the platform were Securities Commission chief executive Jane Diplock and Federated Farmers chief executive Tony St Clair - described by former IPS director Arthur Grimes, chairing the session, as "Aussies who have battled their way to the top - the top of New Zealand".

All unselfconsciously used "we" to refer to their temporary adoptive country. Diplock enthused over a "spectacular country as your playground", Howard that "New Zealand is incredibly innovative".

Diplock said New Zealand had a "fantastic story to tell". Howard gave an example: as early adopters, New Zealanders were a good market for international businesses to try out new inventions.

But Diplock laid it on the line: "Size is important in capital markets."

Australia had only 1.7 per cent of the world's capital market and New Zealand 0.1 per cent. So "it is sheer madness to have barriers [to investment] in the form of different hoops to go through. We should be moving to make one capital market in Australia and New Zealand".

Diplock acknowledged sovereignty concerns and issues of personalities and culture had meant there were few stock exchange mergers round the world. Nevertheless, other ways had to be looked at to make one capital market to "make sure that what comes to the 1.7 per cent also comes to the 0.1 per cent".

As one step, she had, she said, discussed with the Australian Treasury the possibility that an offer made in Australia would automatically be made in New Zealand and vice-versa.

Pressed by Grimes to say whether they thought New Zealand should simply adopt Australian business and investment rules (which many New Zealanders regard as inferior), Diplock and Howard said yes - with reservations.

Diplock: "Adopt them and then hold them up to the light and see how we can make them work."

Howard: "If I had to make a decision, yes, we should adopt them", though she admitted to a "nervous Nelly" feeling about Australian competition regulator Alan Fels.

Asked whether a transtasman economic community could be formed, as advocated by the parliamentary foreign affairs, defence and trade committee this year, St Clair said that could "be done very easily" for farming.

Only the politicians stood in the way. In fact, last week the Government, in a generally tepid response to the committee, fended off the economic community suggestion as "premature", needing much more public debate and analysis along with "other options".

Howard said "business is doing it anyway", though Australian politicians and bureaucrats did not understand that.

St Clair, a veteran of five years in this country, deplored the duplication of trade negotiations and promotion - two meat selling organisations in Washington, a town which did not distinguish between the two countries, two wool marketing countries - and research effort and "government funding going back and forth across the Tasman". Separate exchange rates impeded business.


Howard listed a number of disabilities: a negativity among business leaders, a "defensiveness, a fear of being taken over" and a dearth of players in any one sector. And in this "branch office" economy, head office in Australia too often thought it knew best - "you can't manage a New Zealand company from Australia". Yet "nearly all of our top-end customers have their buying decisions made in Australia".

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