Allan Hawke: Comparing Oz apples with NZ pears

Relationships between transtasman heads of Government have been fraught more often than not, and especially where the leaders have shared the same political philosophy.

Prime Ministers [Malcolm] Fraser and [Robert] Muldoon illustrate that point. Bob Hawke and David Lange's relationship, which was also strained, deteriorated further over the Anzus schism.

Although Jim Bolger and Paul Keating worked together productively on the international stage, Paul held strong views about New Zealand and its direction, believing that you had taken the NZ out of Anzus as a result of your nuclear policy and its impact on the United States alliance, and that you were attempting to get defence on the cheap.

This is an appropriate juncture to record a telling point that escapes most people - it's the important part that personal relationships play in the scheme of things. Commentators and analysts almost always overlook this dynamic, yet we know from personal experience the fundamental truth of this. During my first week, I was told about the New Zealand media's preoccupation with any hint of criticism from Australia or Australians. That wise piece of counsel was soon to be visited upon me in no uncertain way.

On 15 August 2003 I delivered what was supposed to have been a Chatham House Rule address to the Australian Defence Strategic Studies course.

A little while later, a subeditor from the Dominion Post rewarded me with an eye-catching headline: "Once were mates, now rivals." While I never said that, the heading drew attention to my remarks that "the Anzac relationship is finely poised on the fulcrum. It can go one way or the other - in defence, in trade, in every way. That assessment will underpin my three-year term here as High Commissioner".

At the end of August, I returned to Australia for a ministerial meeting to mark the 20th anniversary of the Australia-New Zealand Closer Economic Relations trade agreement.

It became clear to me that the annual CER meetings between our Trade Ministers, which had served as a vehicle for progressing the transtasman relationship, had reached the point of diminishing returns.

That background led me to push three interrelated initiatives: establishment of an expanded dialogue between our Ministers for Trade, Agriculture and Industry to replace the annual meetings between Trade Ministers; the Australia New Zealand Leadership Forum; and the Single Economic Market aspiration.

Before turning to these, some observations about the contemporary relationship are worth making.

In essence, the transtasman political relationship is in very good shape, epitomised by the example set by Prime Ministers [John] Howard and [Helen] Clark.

The nature of the Costello/Cullen, Downer/Goff and other ministerial engagements demonstrates the golden era that we have been enjoying at the Government-to-Government level.

New Zealand has an active involvement with Australian Commonwealth and state ministers in various ministerial council meetings and our parliamentary select committees often cross the Ditch to learn from each other's experience.

The Australia New Zealand School of Government initiative will also help the cause.

Transtasman integration is proceeding on a range of fronts including food and other standards, legal issues and the proposed Joint Therapeutic Products Agency, which we hope will serve as a catalyst for a generic governance model for other such bodies.

New Zealand still regards Australia as its principal ally and its 2005 Budget may take some heat out of the defence debate and associated foreign policy aspects.

Earlier this year, Prime Ministers Howard and Clark were at Gallipoli to commemorate the 90th anniversary of Anzac Day.

That pilgrimage served to remind us that our nations have long been bound together by geography, beliefs and interests. [But] I believe the relationship that we have taken so much for granted may be at risk as the current cohort of Aussies and Kiwis pass on the mantle of leadership, power and influence.

For the next generation, the personal links built backpacking around Europe and Southeast Asia are strong - but, do they see Australia and New Zealand as constructive economic and policy partners on the world stage, or just as good blokes and sheilas to share a beer with?

Prime Minister Clark has observed on a few occasions that Australia and New Zealand are embarked on fundamentally different directions and the cultures of our two countries are moving further apart.

The way our nations view the world and our place in it is also diverging. Paradoxically, that divergence is not reflected in our economic convergence, the extensive and growing personal links, or the thickening web of structural connections.

Everywhere I go, I run across transtasman connections - an anecdotal expression of the extent to which we are intertwined and the significant people-to-people interactions which characterise our relationship.

With a population of around 20 million, Australia has one million expatriates - 60,000 of whom live in the Land of the Long Lost Vowel.

Four million people live in New Zealand, which also has a diaspora of one million, almost half of whom now choose to call Australia home.

Harnessing the contacts and skills of our diaspora is a challenge for both nations.

So far this year, each week, around 650 Kiwis have moved to settle permanently in Australia, offset by 250 coming back the other way.

I'll leave it to you to calculate the effect on the Muldoon intelligence quotient!

* The second part of this edited transcript of a paper prepared by Allan Hawke and used as the basis for his address to the New Zealand Institute of International Affairs in Wellington last night will be published tomorrow.