An opinion poll published this week found 51 per cent in favour of a single transtasman currency.
Certainly, with the exchange rate on the outskirts of US40c, it is easy to regard the New Zealand dollar as a dog (though the Australian dollar also has a certain canine quality right now) and to cast about for alternatives.
But if the poll had put the same proposition another way, I wonder if the results would have been the same: "How do you feel about the Reserve Bank of Australia setting your mortgage rate, according to what it thinks would be best for Australia?"
Forget the "Anzac dollar."
The Australians, as their Treasurer, Peter Costello, made clear again recently, are not interested in a new currency and a new central bank with NZ representation. Why should they?
So what we are talking about is adopting the Aussie dollar, just as Ecuador has recently adopted the US dollar.
Adopting the Aussie would mean giving a sort of power of attorney to the Reserve Bank of Australia to determine monetary policy on this side of the Tasman as well.
That might make it less volatile, but there is a downside risk.
While Australia's growth and terms of trade cycles often move in tandem with New Zealand's (a study by Dr Arthur Grimes and Sir Frank Holmes put the fit at about 70 per cent), that still means that a significant minority of the time monetary policy appropriate for them would be wrong for us.
How uncomfortable ill-fitting monetary policy can be was brought home to New Zealand exporters in the mid-1990s when they suffered high interest and exchange rates as the Reserve Bank tightened to quell an overheated Auckland property market.
If New Zealand suffered an economic shock of, say, an outbreak of foot and mouth disease which Australia did not, it would be a huge advantage to have our own exchange rate to take the initial strain, spreading the cost of the inevitable economic adjustment across the whole country and over time.
Without that buffer, to quote Opposition finance spokesman Bill English, "Something else has to give, and experience elsewhere tells us it is jobs and wages that take the hit."
Advocates of dumping the kiwi dollar sometimes say we need a currency with "critical mass."
But even a currency with the heft of the euro can find itself sold down to levels incomprehensible on fundamental grounds, while its central bank can only look on in baffled impotence.
After nearly 20 years of CER, few impediments remain to the free movement of goods, money or people between Australia and New Zealand. Some of the remaining integration issues, such as a stock exchange merger, are already being addressed, while others, as in the tax area, are no more likely to progress with currency union than without.
But despite the large extent to which New Zealand and Australia are already a common market, only about 22 per cent of our trade is with them, and only 5 or 6 per cent of their trade is with us.
Grimes and Holmes argue currency union would make it easier for small and medium-sized New Zealand firms to make their first foray into exporting.
No doubt. But foreign exchange risk is only one of the hurdles the fledgling exporter faces (and there are a number of hedging products available to manage that risk).
The costs of shipping goods across the Tasman, and even more across Australian wharves, remains an issue. Third-country competition, notably from Asia, is another.
Even for that minority of exporters whose market is Australia, a common currency is no bullet-proof vest.
<i>Between the lines:</i> Adopting Australian dollar no panacea
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