More competition, rather than collaboration, should drive the transtasman economic relationship, Finance Minister Bill English says.

Throwing down the gauntlet in a speech yesterday to the Australia New Zealand Leadership Forum, the annual gathering of business leaders and officials dedicated to advancing the relationship in general and the Single Economic Market in particular, English stressed the need to compete with Australia and the advantages the country has in doing so.

The fundamental competition is for capital, including Australian capital, he said, and over the next few years New Zealand's advantages would become more apparent.

"One is the wage differential. We have a workforce that is better educated, just as productive and 30 per cent cheaper," he said. Another is a better regulatory environment.

"While Australia had the better approach, consistent and steady reform over time, it stopped 10 years ago," English said."They were better at it. Now they are not, while we are getting better at it."

New Zealand has had a bipartisan approach to the reregulation of financial services and to pricing carbon, through an ETS.

Both countries are enjoying the benefits of strong export commodity prices. While the rise in Australia's terms of trade had been much greater, English argued that it is more narrowly based - on China's booming construction activity. New Zealand's, based on food, was broader-based and would prove more enduring.

English also cited New Zealand's "more coherent" political system as an advantage. It avoids the complications of federalism.

And voters in several countries are increasingly compelling politicians to make coalitions or minority government work, he said.

At least MMP is designed for that, and 15 years' experience leaves the Government better placed than its Australian or British counterparts.

English acknowledged the gains from the official incrementalism that had delivered, eventually, things like smartgate at airports and the investment protocol to CER, or - when Canberra gets around to passing the legislation - portability of superannuation between the two countries.

But he was sceptical of what talk about "working together to take on the rest of the world" means in practice.