Prime Minister's delegation attracts full house but agendas at odds

By GREG ANSLEY

SYDNEY - Prime Minister Helen Clark's economic mission to Australia yesterday was launched to a business audience more concerned with Wellington's trade, currency, industrial and liability insurance policies than her message of a new era of intelligent transtasman cooperation.

Delayed in Auckland for an hour by foul weather and arriving to thunderclaps and downpours in Sydney, Clark and the business delegation played to a packed house and strong media attention.

The theme of a combined assault on world markets was welcomed by talkback king John Laws - Australia's most influential broadcaster - and by former New South Wales Premier Neville Wran, a prominent Sydney businessman.

There were also anecdotal reports from members of the business delegation, led by Telecom NZ chief executive Theresa Gattung, of increased Australian interest in the New Zealand economy because of the mission, and the results and projections of last week's Budget.

Clark's appearance at a Trans-Tasman Business Circle lunch attracted more than 340 guests, including a heavy representation of major financial institutions, airlines, tourism operators and IT companies.

But while the mix reflected the mission's target audience - potential investors, buyers and collaborators in new and emerging New Zealand technologies - the questions put to Clark ignored innovation and investment.

Key issues were the possibility of a common currency; the Government's role in Air New Zealand (left unanswered); Wellington's bid for a free-trade agreement with the United States; the Accident Compensation Corporation and paid maternity leave.

The ACC is gaining increasing attention in Australia because of the continuing crisis over the cost and availability of liability insurance following massive compensation claims, and moves to introduce employer-funded maternity leave.

There is also strong interest in the future of free-trade negotiations, given the US farm and steel bills, emerging tensions between Europe and the US and the potential impact on the World Trade Organisation's Dohar negotiating round.

Clark said New Zealand's priorities in its separate negotiations for a US free-trade agreement were different to Australia's.

Wellington's main concern was dairying, with lesser worries about beef and steel; Australia had major issues with sugar, cotton, beef and steel.

For both countries, the main impediment was protectionism within the US and the present round of congressional elections.

But Clark warned that both sets of bilateral negotiations must eventually come into line.

"What is important to New Zealand is that discussions with one CER partner are sequenced with discussions with the other," she said.

"Were one to succeed in concluding an agreement and leave the other far behind, the result would be investment and trade-distorting [and] not in the interests of either of our economies or of our closely integrated market."

Clark also said the jury remained out on the benefits to New Zealand of a common currency, because of concerns that monetary policy of a currency union would follow Australia's monetary and economic cycles rather than New Zealand's.

But ahead of talks late yesterday with NSW Premier Bob Carr, and with Premiers Steve Bracks of Victoria and Peter Beattie of Queensland over the next two days, Clark was optimistic of gains through direct co-operation with the states.

"I think it's good that we compete because that keeps us sharp in our performance," she told the Business Herald.

"But there may also be areas in which we should collaborate more."