Defence not travel worries Australia

By JOHN ARMSTRONG

Australia's Foreign Minister last night reassured New Zealanders that his Government had no intention of scrapping visa-free travel arrangements between the two countries.

But Alexander Downer, speaking on his arrival in Wellington for ministerial talks, indicated that Australia would deplore a "rundown" of New Zealand's Defence Force, including any ditching of the Skyhawks and the Air Force's air combat capability.

He also poured cold water on Prime Minister Helen Clark's hopes of a single transtasman currency, saying he doubted either country wanted to limit its flexibility on monetary policy.

"Our control over our own monetary policy would be diminished ... but you might lose out by being dominated by the Australian currency," he said, adding that enthusiasm for the idea had fallen away rapidly.

Mr Downer said there were no proposals to change the free movement of people between the countries, a 27-year-old arrangement he hoped would last forever.

"There is not a negotiation over scrapping transtasman travel arrangements."

The only negotiations concerned social security arrangements covering New Zealanders in Australia.

"I think we will be able to work out an arrangement Australians and New Zealanders will feel comfortable with ... It is going to be to work out a common-sense solution to what for us is a bit of a fiscal problem."

On defence, Mr Downer said New Zealand had to make its own judgments. But Australia's view was that New Zealand needed a credible, "well-structured" and versatile Defence Force, one that was compatible with Australia's and able to deal with a range of contingencies.

"If defence just fell off the agenda for New Zealand - and the Government says it won't - then New Zealand would lose the capacity to contribute to regional security.

"And I don't think New Zealanders would be pleased about that."