It was disappointing that Prime Minister John Key’s visit to Australia was dominated by breathless reporting of his remarks about New Zealand’s emissions trading scheme. This was not the main focus of Key’s visit to Australia, nor the substance of his speech to the Australian Parliament, the first by a New Zealand Prime Minister.
No, the main purpose of his visit was to advance the Kiwi government’s agenda of a single economic market with Australia. Australian exports to New Zealand are worth about $8 billion annually, only $1 billion shy of the value exported to America. Australia is the number one tourist destination for Kiwis and vice versa. Fifty percent of New Zealand’s foreign direct investment comes from Australia.
Any regulatory moves that facilitate trade, travel or free flow of capital between the two countries would benefit both New Zealand and Australia. No, the main purpose of his visit was to advance the Kiwi government’s agenda of a single economic market with Australia. Australian exports to New Zealand are worth about $8 billion annually, only $1 billion shy of the value exported to America. Australia is the number one tourist destination for Kiwis and vice versa. Fifty percent of New Zealand’s foreign direct investment comes from Australia.
Key argued that both nations share ‘a history of flourishing democracy, of free markets and prosperous economies,’ and that the ANZAC Closer Economic Relations (CER) agreement is the gold standard of free trade. To access the benefits of open markets, and exploit new markets, Key wants to pursue joint NZ/Australia joint free-trade agreements throughout the Asia-Pacific.
Unfortunately for Prime Minister Key – formerly a successful international banker with more insight on trade and the value of markets than your average politician – this part of his speech was largely ignored. Instead, the Australian media considered his thoughts on how New Zealand’s incoherent and costly emissions trading scheme – and how it could be hypothetically tied to a hypothetical Australian global warming tax – to be more salient.
The speech was rich in content, and demonstrated that Key is well worth listening to when he opines on free markets, which he predominantly seems to do while abroad, when talking to foreign governments and the media.
If Key’s agenda can dovetail with Australian Trade Minister Craig Emerson’s renewed free trade push, there could some exciting progress in this area.
Luke Malpass is a Policy Analyst with the New Zealand Policy Unit of The Centre for Independent Studies - see www.cis.org.au.
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