KEY POINTS:
In the dim dark past, when Australian Foreign Minister Alexander Downer was a young diplomat, former Australian Liberal Prime Minister Malcolm Fraser loathed the late Robert Muldoon.
Fraser was staying in a hotel room directly above Muldoon during a meeting in Rotorua, fuming in the early hours of the morning to Downer and other assembled officials about his Kiwi counterpart. Finally, at about 2am, he jumped up and down in the hope of waking Muldoon below.
In the 1980s, Labour prime ministers Bob Hawke and David Lange shared similar mutual feelings - so much so that Hawke recorded in his memoirs the "cynicism bordering on contempt" he felt for Lange.
Hawke's successor Paul Keating lashed New Zealand for "living off the scrapings from Australia's plate", had then-Transport Minister Laurie Brereton dump an open transtasman aviation market by fax - without warning - and fumed at Wellington's assumption of a special relationship between the two countries.
In 1996 this spun 180 degrees with the election of John Howard, a traditionalist raised on the mythology of Gallipoli, Anzacs and the sentimentality of transtasman brotherhood, blended with a pragmatism that recognised the benefits of a warm and close relationship. But Howard turned Australia on its ear, as had Hawke in 1983. For politicians and officials in Wellington, New Zealand's closest and most important friend became a different creature again, with new priorities and directions.
New Zealand had survived the Hawke-Lange years to develop the closer economic relations agreement as a global benchmark for trade agreements. Under the odd couple of Liberal Howard and Labor Prime Minister Helen Clark, even the deep thorns of social welfare and defence faded away.
Now, seven days out from another federal election and more than a decade since Howard won power, Wellington faces the probability of a Labor Government in Canberra under an untested leader and a package of policy statements barely acknowledging us.
Staying on Australia's radar screen has always been New Zealand's biggest challenge. If the polls are right, and Kevin Rudd wins the election, we will be competing with pressing international priorities and a packed domestic agenda.
Wellington will also be dealing with a new political leadership headed by a prime minister unlike any before him: a career diplomat and former bureaucrat who outflanked traditional Labor power bases to take control after only a few short years in parliament.
New Zealand will be losing great friends in Howard and Foreign Minister Alexander Downer, despite his recent fury over the caning Wellington gave Air New Zealand for flying Australian troops to Iraq.
Howard has worked hard to promote harmony and co-operation, developing a warm and efficient relationship with Clark that avoided most of the traps in relations that have snared previous transtasman administrations, and which promoted closer working relations between the two countries: not least in crises such as East Timor and the Solomons.
Labor, on the other hand, has not said much about New Zealand at all, although what has reached the surface has been warm. Shadow trade minister Simon Crean has upheld CER as the standard by which all other trade pacts must be measured, and in a recent speech, Rudd noted Wellington's role in the Pacific: "If this country finds itself incapable of acting independently - or in partnership with our close friend and ally New Zealand, whose efforts in the South Pacific in partnership with ourselves often goes unreported - then there is a long-term danger that the island states will increasingly turn elsewhere."
Rudd is pretty well known in Wellington, and in June held private talks in Australia with Clark. He knows Defence Minister Phil Goff well, and worked with New Zealanders in his former life as a diplomat. He understands New Zealand, has a sound knowledge of mutual concerns, and is regarded as a pragmatist with whom Wellington could work. Many of his likely frontbenchers are also familiar to New Zealand, through both the business of government and fraternal Labor ties. On the other hand, the shape and influences of a Rudd Cabinet have yet to emerge. Only two positions have been confirmed - Deputy Leader Julia Gillard in employment and industrial relations and Wayne Swan as Treasurer.
Much will also depend on a Rudd Government's majority and its consequent ability to push policy through parliament. Labor will almost certainly not control the Senate and will need the help of the Greens and other minor players to drive legislation through the Upper House, provided the minors hold the balance of power.
There is always the possibility that environment spokesman Peter Garrett's one-liner that Labor would dump its moderate policies to reveal a new agenda after the election may become fact. Howard has been making much of the heavy weighting of former union officials in Rudd's shadow cabinet, although unions are a standard Labor stairway to power.
The reality is that both countries recognise the value of close and harmonious transtasman relations. We add weight and influence to each other internationally, and our negotiating styles complement each other.
Economically we are tied at the hip through CER and other bindings. Our prime ministers, Treasurers, foreign, defence and trade ministers, meet in a formal annual schedule; our ministers sit on Australia's federal-state ministerial councils; police and other agencies have similar formal arrangements; defence ties are co-ordinated through closer defence relations.
The senior bureaucrats overseeing the relationship are likely to survive the transition to a Labor Government, operating a machinery that will continue to run efficiently regardless of who wins office. They will also guide their ministers.
There will almost certainly be an initial period when New Zealand sinks against the horizon as the new Government feels its way into power and deals with a rush of competing priorities and interests. But the baseline is that in terms of policy, no one is expecting great change under Rudd. He has moved Labor to the centre, and with a handful of exceptions intends following a very similar course.
A key concern will be his management of the economy. This will be important not only because of the significance of transtasman trade and investment for New Zealand, but also for areas such as employment and migration. Australia's skills shortage, for example, is pushing up wages and will suck talent across the Tasman.
In foreign policy there will be few real differences. Where changes will be made, there are opportunities for greater co-operation - or fewer differences of opinion - with Wellington.
The alliance with the United States will continue its central role. But Rudd intends to withdraw troops from Iraq in consultation with Washington, and to take a more independent position on specific issues, rather than Howard's more instant and reflexive responses.
Climate change policies could present opportunities. Rudd's promised ratification of the Kyoto protocols would open potentially valuable areas of co-operation, such as the alignment of carbon emissions trading schemes on the same multilateral path.
In the Pacific, Rudd promises a more holistic approach, lessening emphasis on security and law and order. In practice, this is likely to be more nuanced than major, as Australia already has a huge aid, development and good governance programme in the region - much of it below the radar but which will become apparent when Labor ministers get all the briefings and papers.
Closer to home, the present range of detailed and highly technical discussions and negotiations should continue under their own momentum and through the influence of vested interests. Work on a single economic market is expected to plod on.
As the dust settles down, it should be business as usual.
Golden touch turns to lead
Short of a miracle, next week is going to be very depressing for Prime Minister John Howard.
At the end of the fifth of six weeks of intense campaigning, and with the A$9.4 billion in new promises made during his campaign launch on Monday, the Government is still on its knees.
The launch needed to be the big king hit that shoved Howard back into the fight.
But yesterday a new ACNeilsen poll in Fairfax newspapers, made after the Brisbane spectacular, showed only a slight improvement in his fortunes.
The Government nudged up 1 percentage point to 46 per cent in the two-party preferred vote that decides Australian elections, still 8 points behind Labor's 54 per cent.
Labor Leader Kevin Rudd is still preferred prime minister by a long shot, and fewer than three in 10 voters expect the Government to survive into a fifth term next Saturday.
Howard appears to have lost his golden touch, a view strengthened by research by pollster Roy Morgan showing that Government advertising is failing to swing Labor voters across. But Opposition advertising is ringing bells with the other side.
Coalition voters showed sympathy for union and Labor Party TV advertisements claiming Howard's unpopular WorkChoices industrial laws were hurting working families, and reminding them of the six interest rate rises during Howard's watch.
On the other hand, Coalition advertising was essentially preaching only to the converted.
"This is not good news for the Coalition," Roy Morgan chief executive Michele Levine said.
The Government has not been helped by Health Minister Tony Abbott, who earlier in the campaign made headlines with a series of embarrassing gaffes.
Now he has made another - and in the crucial area of industrial relations, Labor has got hold of a video of Abbott this week telling a local electorate meeting that despite Government assurances to the contrary, workers' protections had by and large vanished under WorkChoices laws.
He said the best protection for a sacked worker was to find another job.
Nor did Howard need the latest report from the National Audit Office.
Reporting on the management of the Government's A$328 million regional projects fund, the office pictured Howard buying votes for the 2004 election through politically-directed grants that disregarded rules and guidelines.
Many grants were also made without proper assessment, against official advice and pushed through in a surge just before the election was announced.
In the final working hours of the day before the Government went into caretaker mode for the campaign, one minister alone approved 16 grants totalling A$3.5 million within 50 minutes.
The report followed widespread condemnation of Howard's campaign spending spree and warnings that such Government spending would create new pressures on inflation and drive up interest rates.
Rudd used Howard's campaign launch pledges to hammer the prime minister's economic management - the Government's one real stronghold - putting Howard on the back foot for the rest of the week.
In contrast to Howard's spree, Rudd made promises of less than A$2 billion during his launch on Wednesday.
