Common border high on PMs' list

John Key and Kevin Rudd had a packed agenda when they met in Sydney yesterday. Photo / AP

New Zealanders should know within a year if they will be able to fly the Tasman on domestic flights after talks in Sydney yesterday between Prime Minister John Key and Australian counterpart Kevin Rudd.

The possibility of a common border - under discussion since 1992 - has been pushed near the top of an official worklist already burdened with efforts to co-ordinate bilateral and international climate change policies and approaches to the global economic crisis.

The two nations will be working on a harmonised economic package for Australia to present to the impending G20 summit in London.

Both leaders see moves to accelerate talks on a common border, and to co-ordinate climate change policies that could lead to a transtasman carbon trading regime, as central to efforts to build a single economic market.

The meeting between the two prime ministers - the first official talks since National won power - reinforced a relationship that Mr Rudd described as "core" to Australian foreign policy, and set a clear agenda despite huge distractions.

It came as New Zealand firefighters battled Victoria's disastrous bushfires, and as the New Zealand Red Cross presented a $2 million cheque to its Australian counterpart.

Mr Rudd said both countries were keen to accelerate progress on a single economic market, with new talks on transtasman investment and the elevation of a common border to "decision-making level".

The two leaders said there were still barriers to visitors arriving in one country to be cleared for entry to the other, flying between domestic terminals in both countries.

These included quarantine and biosecurity, other security issues and customs.

"I believe they are surmountable," Mr Key said.

"Last year the [Australia-New Zealand] Leadership Group set an objective of reaching a common border by 2015. In my view that's far too long."

Mr Rudd said officials would work on the practical issues involved.

"It's one of those things that we've decided to crunch to see if we can get agreement within a year. If we can't, we will explain to you why."

Mr Rudd said he and Mr Key had also discussed at length approaches to the global economic crisis and would work together on appropriate policy responses.

"As we formulate our national responses and our global responses to this recession, we as governments will remain in absolute close contact on appropriate action," he said.

"As we approach the G20 Summit we will also be working closely with our friends in Wellington on the best set of approaches on globally co-ordinated stimuli, on the question of returning credit flows to normal as soon as possible, and through action on public assets and bank balance sheets, as well as other actions necessary to improve the regulation regime in the future for globally significant financial institutions."

Similarly, the two leaders were determined to accelerate closer economic relations, and to punch through obstacles remaining in the way of investment and other key areas, Mr Rudd said.

They also agreed to work more closely to harmonise climate change policies, a fraught issue for Mr Rudd, who is in the midst of a political storm over his impending carbon emissions trading scheme.

Mr Key said that while there were fundamental differences between the two economies, New Zealand and Australia needed to work together, possibly towards a transtasman carbon market.

"That may be a conclusion that results from the work that we do," he said. "But ultimately we need to look at where things are, how possible it would be for New Zealand to align itself with Australia."