A cup of tea and no officials, Key meets Rudd in the garden

John Key and Kevin Rudd spoke one-on-one at the Australian Prime Minister's residence. Photos / Kenny Rodger, Greg Bowker

Informal talks in the back garden were "probably the most valuable time" in Prime Minister John Key's meeting with his Australian counterpart Kevin Rudd.

Mr Key met Mr Rudd at his Sydney residence Kirribilli House over the weekend for the pair's first meeting in Australia since Mr Key took over as Prime Minister.

"We've had an hour and a half down the bottom of the garden at Kirribilli House, which is very pleasant. Had a cup of tea, no officials, and had a chance one-on-one to talk about a whole range of issues that we want to progress."

The two leaders later had dinner with top Australian ministers and chief executives, Mr Key told TV One's Breakfast show.

He said the informal talks were probably more important than official ones.

A single economic market and reclassifying trans-Tasman flights as domestic routes were high on the agenda.

With the global economic crisis forming a large part of discussions, Mr Key earlier said advancing the single economic market was an important step.

"Expanding CER into a single economic market can be very important for New Zealand, it can give us access to a market that is six or seven times larger than our own.

"There's potential opportunities around freer borders where New Zealanders and Australians may be able to travel much more freely into each other's market."

Making travel freer between the two countries was not a new idea, but had been set down to start 2015, Mr Key said today.

"Well, 2015 is a hell of a long time away for New Zealanders to have to go through passport control on the Australian side and line up when they come home at midnight on the other side in New Zealand.

"I can't see why if we are genuine in wanting to progress this idea we have to wait six years."

Mr Key could not give a start date but said a trial was possible.

"If it can happen in Europe surely it can happen between Australia and New Zealand."

Climate change was also in Mr Key's sights, with a potential move towards a single emissions trading scheme.

"It doesn't make sense for New Zealand and Australia to be operating under different rules when so many companies invest on both sides of the Tasman."

The pair previously met in Lima, Peru for Apec, and at the Pacific Islands Forum special leaders meeting in Port Moresby, Papua New Guinea.

- NZPA