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PM’s Lightning Trip Across “The Ditch”

03 Mar 2015
Alexia Jablonski
Image Credit: Facebook (John Key's Official Page)

Prime Minister Tony Abbott’s first official visit to New Zealand on 27 February 2015 involved economic and national security talks with New Zealand Prime Minister John Key.

Purpose of visit

Abbott’s prime ministerial visit, which lasted little over 24 hours, coincided with the 10th anniversary meeting of the Australia New Zealand Leadership Forum, an annual event for over 100 leaders from the business, government and community sectors from both countries. Launched in 2004, the Forum’s past work has included efforts to expand bilateral investment, support joint trade negotiations with other countries and accelerate the Single Economic Market. The PM’s team included Minister for Trade and Investment Andrew Robb, Minister for Foreign Affairs Julie Bishop and Minister for Health Sussan Ley.

Issues under discussion

Trade and investment

Australia is New Zealand’s largest trading partner and New Zealand is Australia’s sixth largest trading partner. Discussion focused on eliminating trade barriers and enhancing bilateral exchanges. Introduced in 1983, the Closer Economic Relations (CER) Trade Agreement is one of the most comprehensive bilateral trade agreements in the world. Bilateral trade in goods and services between Australia and New Zealand was equivalent to A$22.7 billion during the year ending in June 2014. The two countries are also close investment partners. New Zealand has A$47.6 billion invested in Australia, while Australia has A$107.4 billion invested in New Zealand.

The annual Closer Economic Relations Ministerial Meeting on 27 February provided a forum for ministerial oversight of the CER Trade Agreement and 80 related agreements. The meeting also provided direction in pursuing the Single Economic Market agenda, which has the objective of reducing trade barriers and business costs, increasing investment levels between the two countries and liberalising trade in services. The Australia New Zealand Leadership Forum allowed business leaders to discuss issues obstructing investment and provided a platform to advocate for a better trans-Tasman investment environment.

National security

Against the backdrop of the Anzac centenary, the two countries proposed to enhance cooperation on national security issues. Tony Abbott and New Zealand Prime Minister John Key agreed to work together to help train Iraqi militants to combat ISIL. Key agreed to send 143 troops to Iraq, most likely alongside 300 Australian troops to be deployed in addition to Australia’s 170 special forces and 400 air force personnel. The leaders differed slightly on the timeframe of the mission. While Key said he was determined to leave Iraq in two years to avoid being “in the Middle East forever”, Abbott announced that the mission was likely to last two years, with a review every 12 months. Foreign Minister Julie Bishop also discussed New Zealand’s UN Security Council term, which commenced on 1 January 2015, and domestic counter-terrorism efforts with New Zealand Foreign Minister Murray McCully.

Welfare and taxation rights

Another prominent area of discussion involved reciprocal welfare and taxation rights. New Zealanders currently have minimal access to social support while residing in Australia. They are taxed twice on their Australian shareholdings, due to the absence of mutual recognition of imputation or franking credits.

Other topics

During the CER Ministerial Meeting, New Zealand’s delegation led by Minister of Trade Tim Groser and Australia’s delegation headed by Andrew Robb broached a number of other topics. These included allowing online credentials to be accepted in both countries to allow access to government services, introducing an alignment of qualifications framework to enhance student mobility and cooperating on rolling out “E Gate” to simplify airport flows. Foreign Ministers Bishop and McCully also discussed Australia and New Zealand’s joint work in the establishment of an Ebola Treatment Centre in Sierra Leone.

Implications

Despite the progress made on the security front, negotiations left some long-standing questions unresolved. Concerns by New Zealand exporters that Australia’s free trade agreement with China will leave them facing stronger competition were left unaddressed. There was no serious commitment on reforming social support and taxation restrictions for New Zealanders in Australia. Third, Prime Minister Abbott did not concretely express the intention to further economic integration with New Zealand. Yet with the Australian economy lagging behind New Zealand’s, the need to enhance economic cooperation is all the more crucial.

Alexia Jablonski is a research intern at the AIIA National Office as well as an assistant editor of Australian Outlook. This article can be republished with attribution under a Creative Commons Licence.