Transtasman relations on front burner

By FRAN O'SULLIVAN assistant editor

Proposals to further integrate the Australian and New Zealand economies will dominate the agenda at a meeting between the nations' treasurers in Melbourne tomorrow.

Finance Minister Michael Cullen and his counterpart, Treasurer Peter Costello, are said to be "fairly advanced in their thinking" on mechanisms to draw the two countries together.

But any major steps - such as forming a single borderless market - will require significant political and business support.

Tomorrow's meeting, the second between the finance top dogs, comes with growing business support for taking Closer Economic Relations (CER) to the next level.

But there are wrinkles to iron out.

Two issues that are likely to be discussed are the Qantas/Air New Zealand partial merger which has been stymied by competition regulators on each side of the Tasman, and the problems afflicting National Australia Bank, which owns the Bank of New Zealand.

Ministry of Foreign Affairs & Trade sources stressed the most important aspect from New Zealand's perspective was that "broad macro-economic issues" would now be discussed on a regular basis.

Since last year's inaugural Costello/Cullen meeting the triangular taxation measures confirmed then have gone into effect.

In December a treaty was signed that will see Australia's Therapeutic Goods Administration (TGA) and the New Zealand Medicines and Medical Devices Safety Authority (Medsafe) replaced by a single agency accountable to both the New Zealand and Australian Governments.

Among issues often raised in the transtasman context is full monetary union, but that will not be part of the formal agenda this week.

Also up for discussion at an A-list business lunch tomorrow will be plans for the inaugural Australia New Zealand Leadership Forum, set down for the first half of this year.

The forum will draw key decision-makers together to ensure working groups have been formed.

The New Zealand group is chaired by Bank of New Zealand chairman Kerry McDonald.

Other members include: Carter Holt Harvey chairman John Maasland; NZ Rugby Football Union chairman Jock Hobbs; Council of Trade Unions president Ross Wilson; Telecom chief executive Theresa Gattung; Seddon Bennington, who heads Te Papa; Chris Tremewan, pro vice chancellor of Auckland University; John Shewin, chairman of PricewaterhouseCoopers; Sir Frank Holmes, who was a key player in driving the initial CER agreement; and Mfat chief executive Simon Murdoch, a former High Commissioner to Australia.

Qantas chairwoman Margaret Jackson is leading the Australian core group. Other members include: Allan Fels, Dean of the Australian New Zealand School of Government; David Hoare, chairman of Principal Global Investors (Australia); Business Council of Australia chief executive Katie Lahey; Rowan Callick, Asia-Pacific editor of the Australian Financial Review; and Bob Cotton, former High Commissioner to New Zealand.