Australia will sell NZ apples - Gillard

Australia's Prime Minister Julia Gillard arrives in the debating chamber. Photo / Mark Mitchell

Australian Prime Minister Julia Gillard has announced Australia will sell New Zealand apples in her address to the New Zealand Parliament - the first ever by a foreign head of government in the debating chamber.

Ms Gillard said it was a "great privilege" to be the first world leader to speak in the house.

She said Australia would honour its free-trade obligations and accept the import of New Zealand apples, which have not been allowed in the country for 90 years. The comment was followed by applause from members of the house.

Ms Gillard's arrival at Parliament coincided with news that New Zealand soldier Private Kirifi Mila had been killed in Afghanistan.

"The Anzac legend is not confined to records and books - it is a living story," Ms Gillard told Parliament. "The Anzac spirit lives on in the most strategically difficult theatre of our time - Afghanistan," Ms Gillard said.

Ms Gillard said Australia grieved the loss of New Zealand soldiers as if they were their own.

"Australia has many alliances and friends around the world ... but New Zealand alone is family."

Recent tragedies in both countries had shown how close the two countries were, she said.

Referring to Pike River, Ms Gillard said: "We didn't just mourn for the loss of the two Australians - we mourned for them all.

"When the mine exploded Australia didn't need to be asked to help - we just did. When natural disasters hit Australia this summer New Zealand didn't need to be asked to help - they just did."

Ms Gillard said she Prime Minister John Key had agreed to improve contact between the countries' leaders, with Mr Key heading across to Australia next year and Ms Gillard promising to return to New Zealand in 2013.

Among those in the public gallery to watch Ms Gillard's address were the who's who of the public service, the diplomatic corps and senior Maori figures.

Former Prime Ministers Jim Bolger and Jenny Shipley were there, as was US ambassador David Huebner.

Others included Reserve Bank governor Alan Bollard, foreign affairs head John Allan, GCSB head Jerry Mateperae, Ngai Tahu chair Mark Solomon and Sir Tipene O'Regan. Several former MPs - Ron Mark, Paul East and Russell Marshall - were also present.

Ms Gillard sat where the Clerk of the House normally sits.

Her speech ended to a standing ovation from those in the public gallery as well as MPs. Only some of the Green Party MPs did not applaud, including Catherine Delahunty.

Ms Gillard was welcomed earlier with a powhiri by local iwi Te Atiawa before greeting Speaker Lockwood Smith and Prime Minister John Key with a kiss on the cheek.

She stood while Australia's national anthem Advance Australia Fair was played by the New Zealand Defence Force band before inspecting the troops.

Before speaking to the house, Ms Gillard met with Cabinet ministers and engaged in formal talks with Mr Key.

Mr Key started Ms Gillard's meeting with Cabinet by acknowledging the death of Private Kirifi Mila.

"We lost a soldier in Afghanistan last night," he said, going on to say family were yet to be contacted so the dead man could not yet be named.

Ms Gillard also briefly commented.

"I did want to start off by saying condolences on the loss of the New Zealand soldier and I will have something more to say about that later today."

Ms Gillard is on the second and final day of her first trip to New Zealand as Prime Minister. Later today she will sign the agreement with Prime Minister John Key under the Closer Economic Relationship, which seeks to increase investment between Australia and New Zealand.

The investment protocol will increase the threshold at which Australian investment in New Zealand business needs Overseas Investment Office approval from $100 million to $477 million and investment by New Zealand in Australian business from about A$230 million ($305 million) to just over A$1 billion.

However there are fears Australia's greater wealth and investment capability may undermine New Zealand efforts to keep control of strategic assets, and closer economic relations between the two countries will see New Zealand dominated by its much larger partner.

Speaking to Radio New Zealand this morning, Ms Gillard sought to allay those fears.

"I think a strong economic relationship between our two countries benefits both of us. We both get stronger together. And that's why over 30 years New Zealand and Australia have pursued greater economic integration and partnership," she said.

Ms Gillard said the signing of the investment protocol today was the next step in a "vision that has been 30 years in the making" since the two countries first sought closer economic ties.

Australia has a strong economy and had not suffered the affects other countries had during the global financial crisis, Ms Gillard said.

"A strong Australia is good for New Zealand. We are so closely tied that the stronger each of us is, the better it is for the other," she said.

"So I don't think it is about fearing Australia's strength, it is about a genuine partnership where Australia and New Zealand work together to give each other economic opportunities - including job opportunities. And there will always be a big two-way exchange of people between our two countries.

"I think New Zealand has a strong sense of itself, a really strong sense of its future and how it wants to grow its economy. There have been some tough times in New Zealand in economic terms and I know everyone is looking forward to turning the corner.

"So I don't think it is a question of big dominating small, I think it is a question of partnership and a sense of family and working together - which our two countries have."

Ms Gillard said it also made sense for the countries to bring their trade regulations closer in line.

In the future, Ms Gillard hoped to continue to make transtasman travel easier.

"We've got this aim of travel between the two countries feeling like travel between two Australian states - that is essentially borderless."

Ms Gillard said she had no current proposals to bring about in a common currency.

"I don't think that is on the agenda because there is so many things we would need to do to bring our economies closer together."