By GREG ANSLEY Canberra Bureau Chief
CANBERRA - Australian Treasurer Peter Costello has confirmed that Canberra will not consider a new transtasman currency, despite Government-to-Government talks on the proposal.
Speaking during the first parliamentary session of the year, Mr Costello reaffirmed the position he took during last year's World Economic Forum in Melbourne, when he quashed speculation that a merged currency was on the agenda.
Instead, Canberra's view remains that Wellington would have to drop its own dollar and adopt Australia's if it wanted a single currency for the transtasman free-trade area.
Mr Costello's remarks, prompted by a question on notice from Labour backbencher Mark Latham, follow a year of increasing speculation on a possible currency union, largely prompted by growing support in New Zealand.
Last year a survey of New Zealand business found 80 per cent backing for the proposal, and with opposition by the Treasury apparently weakening Prime Minister Helen Clark said a merged currency was a logical progression of CER.
Support for an Anzac dollar is much weaker in Australia, but several commentators are now talking more seriously about such a move.
John Edwards, HSBC's chief economist for Australia and New Zealand, suggested in a recent article in the Australian Financial Review that the climate for a marriage of currencies was likely to improve.
"Despite [lack of Government support] there are grounds to expect a serious move towards a common currency, and in my experience the bigger the business, the more strongly it supports the proposal," he wrote.
Mr Edwards said financial integration across the Tasman complemented close trade and investment relations, and highlighted the fact that the single biggest impediment to closer integration was the separate currencies.
But in Parliament Mr Costello said that, despite talks on the issue during more general official transtasman discussions, an Anzac dollar would not be accepted by Canberra.
Mr Costello also said Wellington would have to make the running if it wanted to dump its own currency and join Australia. "The Australian Government is not in favour of a new or third currency," he said.
"Current monetary and microeconomic policy arrangements in Australia have proven effective in providing the economic environment for the strong, low-inflation growth and declining unemployment that we have seen in recent years.
"Were we to receive a request to adopt [other] currency arrangements the Government would have a look at such a request.
"No such request has been received."
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