NZ Inc set up to avert Aussie takeover at summit

By FRAN O'SULLIVAN, assistant editor

SYDNEY - Australia Inc arrives in force in Wellington today to push the case for a single Australasian market.

On the Australian agenda are a common currency, a single stock exchange, harmonising telecommunications, joint trade negotiations and much more.

Documents obtained by the Herald indicate Australia Inc believes New Zealand is "too small to go it alone" - a view which Herald investigations found is shared at the highest levels of the Howard Government.

About 37 powerbrokers, ranging from top-flight business players, senior Cabinet Ministers, regulators and defence players will converge on Government House for the opening day of the first Australia New Zealand Leadership Forum.

Led by Qantas chairman Margaret Jackson, the group includes some of the biggest names in Australian business and has prompted a last-minute flurry to make sure an NZ Inc team is also fielded to avert an "Aussie takeover".

Ms Jackson, who has a take-charge approach, kicked the ball rolling with a strong plug for a single Australasian market (SAM) early this week.

By midweek she had re-dubbed SAM the Tasman Economic Area after concerns were expressed on the Kiwi side that New Zealand's name did not feature among the letters which made up the acronym.

In a speech to a closed session of the Trans-Tasman Business Circle in Sydney, Ms Jackson said it was "time to restate our aspirations for the relationship".

"Big opportunities are going to waste; real risks to both countries are being incurred."

A single economic market to link both countries was put on the agenda in January following annual talks between Finance Minister Michael Cullen and Treasurer Peter Costello. Officials have been delegated to look at harmonising competition rules, banking prudential supervision and joint accounting standards.

The study teams have yet to report. But Australia Inc wants to go much further.

"It is wonderful to see Australia and New Zealand carving out independent but complementary identities," said Jackson.

"But we are now falling behind and placing ourselves at a disadvantage."

Driving Australia's concern is the rapid amalgamation of once warring countries into new blocs such as the expanded European Union.

In her Sydney speech, Ms Jackson promoted:

* One competition regime - "We need one process. And one umpire."

* A single body to administer a joint accounting regime. * Indirectly - a single stock exchange.

"We need to do all we can to facilitate a seamless transtasman market for financial services for the benefit of both consumers and investors on both sides of the Tasman."

Instead of isolated or incremental approaches to transtasman relations, Ms Jackson advocates that a "concerted, holistic and ambitious set of changes which will materially benefit both countries" needs to be put on the table.

"For the sake of both of our countries it's not good enough to have endless well-meaning discussions that drift along to inconclusive outcomes."

The Leadership Forum has been designed to strengthen relationships across a range of areas, not just business.

But it was not until the New Zealand side obtained the Jackson list a few weeks back that concerns grew the event would be strongly focused on the single market agenda.

It is clear New Zealand was caught back-footed by the resources Ms Jackson has marshalled to ensure a strong debate starts on the real issues underpinning all the political rhetoric about a transtasman single market.

For three weeks now, New Zealand co-chair Kerry McDonald has been furiously retro-fitting his list to ensure NZ Inc is also on parade.

Telecom chief executive Theresa Gattung, who had originally deputed her legal counsel to attend the forum, cut short an international roadshow to promote her company's bumper profits once she became aware Telstra would be promoting the axing of Telecom's local loop monopoly while in New Zealand.

Ms Gattung has since asked Mr McDonald to ensure the meeting does not become "subverted by narrow commercial interests".

NZX chief executive Mark Weldon became a last-minute addition as fears spread that the Australian Stock Exchange was about to renew its push for a transtasman merger. It is not.

But other Australian business players will do that instead.

New Zealand and Australia have been linked by the Closer Economic Relations (CER) agreement for 20 years, but politicians on all sides agree it is time to take the essentially trade relationship to a new level.

On the agenda at today's forum are gritty questions about the real nature of the bilateral relationship, economic challenges facing both, such as the growing political and economic power of China, governance issues in the Pacific, security and defence as well as the single market.

The Australian Financial Review's Asia Pacific editor, Rowan Callick - a member of Alexander Downer's Foreign Relations Council and Jackson's core team - indicated considerable pressure had gone back on to the New Zealand side to address obvious sectoral gaps.

There has been muted criticism over the absence of key players such as Roderick Deane, chair of Telecom, ANZ-National Bank and Fletcher Building, from the New Zealand side.

Dr Deane has some real concerns on the single market particularly if a decision is made to holus bolus adopt Australia's more burdensome regulation.

He told the Herald's recent Mood of the Boardroom survey "one of the strongest competitive advantages for New Zealand business is its high degree of flexibility and adaptability".

The absence of a coherent business organisation voice still rankles.

"We were pushing the Australians for years to take CER to the next level," said Auckland Regional Chamber of Commerce chief executive Michael Barnett.

"But now they've grabbed the single market concept and are running with it we've got behind the play."

But Mr McDonald's beefed-up list has gone some way to assuaging Australian concerns.

Jackson is not prepared to bag the New Zealand side.

"All I'd want to say on the delegates is the Australian steering group was free from interference from Government in the selection of the group of delegates.

"We believe the New Zealand group is also free of political influence."

Australia inaugurated its first US dialogue in Washington in 1993, bringing together top policy-makers from both sides of politics in Washington and Canberra each year, as well as leading figures from business, trade unions, academia and media commentators.

The brainchild of Australian businessman Phil Scanlan and former US President George Bush, the dialogue is credited with forging ties which resulted in the US decision to forge a bilateral free-trade deal.