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Home / New Zealand

Fran O'Sullivan: PMs lacking in direction for common market plan

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·NZ Herald·
18 Feb, 2011 04:30 PM4 mins to read

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Julia Gillard and John Key failed to inspire any momentum towards an Australasian market. Photo / Mark Mitchell

Julia Gillard and John Key failed to inspire any momentum towards an Australasian market. Photo / Mark Mitchell

Fran O'Sullivan
Opinion by Fran O'Sullivan
Head of Business, NZME
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Why does a Muldoon-era Cabinet minister still display a much bolder ambition for the New Zealand-Australia relationship than a pair of Kiwi-Aussie Prime Ministers nearly half his age?

John Key and Julia Gillard cut the mustard on the political popularity front. But when "Julia met John" neither showed any real appetite to chart a swift course towards nailing a true Australasian common market.

It took 82-year old Hugh Templeton - whom Gillard invested with the Order of Australia at the Australian High Commission - to inject a good dose of reality into the two-day transtasman lovefest by pointing out little of real substance had happened since the closer economic relations deal he helped originate was signed more than a quarter of a century ago.

Hugh Templeton is of sufficient age and stage to make his points kindly. But there was no doubting his passion to see the job done when he exhorted today's leaders to address the three outstanding CER (Cs) - a customs union, common market and common currency.

But when it comes to bold transformative actions neither Prime Minister displayed the mettle that lead the founders of CER, like Templeton, to persuade their colleagues and countrymen to make courageous moves.

CER led to the removal of tariffs, export incentives and import restrictions between our two countries, making transtasman trade easier.

There were inevitably winners and losers, but it ensured the viability of our small nation at a desperate time when Britain had given us the flick - "Sorry chaps, you're no longer our farm. We're joining the European common market".

The official blurb noted that CER had been a sound foundation for subsequent joint ventures such as the transtasman mutual recognition arrangement and the work towards a single economic market.

But the reality is, while former Labour Finance Minister Michael Cullen and Australian Treasurer Peter Costello kicked this process off in 2003, progress has been piece-meal and inordinately slow. There is no single economic market.

Nor is there even a date for concluding the process, let alone what the ultimate shape of our Australasian market will be.

Before Gillard's visit I wrote: "Tempting as it may be for her to focus on the usual (easy) transtasman cliches - the big brother/little brother friendly rivalry, our shared Anzac tradition where we have "spilt blood" together on foreign battlefields and each other's blood when it comes to rugby - we should expect her to deliver much more than conventional bromides."

It was inevitable that at a time when another New Zealand soldier had just lost his life in Afghanistan our shared martial experiences would come to the fore.

Yet it would be churlish to ignore the aspirational rhetoric in Gillard's two set-pieces. She openly displayed a more robust and muscular vision for Australasia than Key, or, for that matter, her fraternal but increasingly insular colleague Phil Goff.

The realities of globalisation and free markets must be embraced, not repudiated. The United States is valuable as a friend and ally to these two Western "island" nations based alongside the burgeoning Asian markets and the necessity for ongoing structural reforms - these were just some of the realities that Gillard spoke to.

Her two speeches were a delight in stark contrast to our leaders' practice of wrapping their countrymen in political cotton wool.

But by itself this is not sufficient. The steady drain of our talent to Australia in search of greater opportunities and higher wages coupled with the remorseless transformation of New Zealand into a branch economy has a price.

It is high time we exacted that price by requiring the two Prime Ministers and their Cabinets to set a new agenda which puts some more value back here.

Whether by accident or design, PR minders made sure there was no time for substantive questions at the joint press conference.

Neither Prime Minister seemed to have the wit to make it clear that their press conference was to be on the substance of their talks - not an opportunity for the Australian press to bore their New Zealand counterparts witless with more questioning of Gillard on domestic health and mining issues.

And, conversely for Key to indulge New Zealand reporters by attempting to blameshift (wrongly, as it later turned out) Government officials for the big spend-up on new BMWs for his Cabinet.

There were few substantive questions on matters other than Afghanistan and too much time wasted on signing an investment agreement that was finalised last July.

Neither Key nor Gillard was asked why the Australian Government refuses to even the transtasman score by making vital tax changes that would put a billion dollars back in New Zealand's pockets.

Such breakthroughs will not happen until influential New Zealanders and Australians demand real substance rather than platitudes.

Discover more

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