Helen Clark's instructions from afar on the subject of the Australia-New Zealand Leadership Forum in Melbourne make strange reading. The Prime Minister has told her deputy, Michael Cullen, to keep an eye on things at home rather than venture to the gathering. This could be interpreted as a snub, given that Australia's representatives will include the Treasurer, Peter Costello, and a swag of top business executives. Without any doubt, it is a disservice to transtasman relations.
The error is the more curious, given the pattern of recent dialogue. Closer economic relations have long been driven by New Zealand Governments. This one has become occupied, in particular, with the overlaying of the CER trade agreement with common regulations, so that companies can more easily do business on both sides of the Tasman. That has required the keeping of a wary eye on any development that might impinge on sovereignty.
Australia has tended to be less enthused, if only because by dint of its size it has not needed to be. Until recently, that is. Spurred, in part, by a rush of investment in this country - traversing the likes of banking, newspapers, railways and retailing - Australian businessmen have begun to champion a single transtasman economic market. There is an obvious self-interest in this, but, equally, there is no arguing that the concept of collective power makes sense in a global landscape populated by strong regional blocs.
Given this Australian ardour, it is almost perverse for New Zealand's Minister of Finance not to be in Melbourne. Dr Cullen has worked closely with Mr Costello on the remaining obstacles to trade and business between the two countries, and it is apparent that the two men have a good rapport. His absence from the forum will hardly aid that sense of goodwill, in much the same way as Helen Clark's initially dismissive response to last year's leadership gathering was highly counterproductive.
That forum, the first, was marked by the Australians' push for a single market complete with a common currency (their own). That campaign fizzled as soon as it became clear New Zealand saw no benefit and potential economic-management detriment in this, and recognised the implications for its sovereignty.
A year on, a similarly contentious issue, that of harmonising transtasman banking regulations, is to the fore. Mr Costello has stipulated that movement in this direction is a "must". The Australians' favoured outcome would see banking regulation handed over to a single, joint regulator (their own). The protection offered by Reserve Bank rules would be sidelined. Again, there are clear sovereignty implications, little to be gained and much, potentially, to be lost, especially a reduced tax take from the Australian-owned banks.
The drive towards banking harmonisation is being backed by the warning that if New Zealand does not play ball, Australia will look elsewhere. That seems largely an empty threat, given Australian motives in this exercise. Certainly, it should not be the signal for panicky decision-making, or for New Zealand to bow to its big brother when issues of sovereignty are at stake. If business advocates developments along this line, it is totally out of step with popular sentiment.
The Leadership Forum will, hopefully, make significant inroads into issues such as taxation reform, and re-ignite progress on standardisation of the likes of securities, competition and accounting rules. No one questions the benefit of this, or that playing by the same rules is essential for the development of a coherent Australia-New Zealand economic unit. Neither is there any doubt that progress has been too slow.
But New Zealand must not be stampeded into terms that favour Australia, or risk surrendering its identity. The appropriate Government voice should be present in Melbourne to deliver that message, and to guide discussion on a single economic market down an acceptable path.
<EM>Editorial:</EM> Australians must hear Kiwi voice
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