New Zealand’s most important relationship is with Australia. It is our closest neighbour and our most important economic and defence partner. We have similar histories, culture, institutions and values. We share personal links through business, tourism, migration, sport and family contacts, which in turn underpin the close and warm government links. Over 800,000 Aussies visited New Zealand last year.
Our Prime Ministers meet each year, as do our Defence and Trade Ministers: Our two Foreign Ministers get together six monthly, and New Zealand Cabinet Ministers take part in the regular ministerial council meetings held between the State and Federal governments across a wide range of portfolios.
Last year we celebrated the 20th anniversary of the Closer Economic Relations (CER) agreement between Australia and New Zealand. It dramatically boosted trade and it underpins the growing economic inter-dependence between our two countries. Of greater significance, perhaps, was the pressure it bought to bear in making our two economies less protectionist and more competitive. Initially this meant competition between each other, but it has led the way to the wider international competiveness that has allowed Australia and New Zealand to compete so successfully in global markets.
Right now our two economies are performing strongly in the global context. We have both experienced good levels of growth while others have stumbled. Australia’s success matters to us as it is the largest market for our goods. A dynamic and prosperous New Zealand economy also matters to Australia, as we’re its fifth largest market.
Having seen trade across the Tasman grow by nearly 10 per cent a year over the past 10 years, the Australian and New Zealand governments are currently exploring the scope for developing a Single Economic Market between us. A growing number of companies now have a presence in both countries, and we want to remove as far as we can the remaining barriers and extra costs of doing business together.
The goal is to create a seamless trans-Tasman business market. We think that a combined market of 24 million people is good for business. And by closer collaboration we can more effectively build critical mass and compete better in the international market place.
Also we had a very close defence relationship over the four decades post WW II - both bilaterally and with the United States under the ANZUS Treaty. This was the case until the 1980s, when New Zealand passed its non-nuclear legislation. In response the United States put a hold on defence co-operation with New Zealand.
Because New Zealand no longer formerly participated in the alliance, differences on the defence front between New Zealand and Australia became apparent. Despite those differences, or perhaps because of them, our two governments embarked on a series of discussions in the early 1990s resulting in Closer Defence Relations (CDR). CDR is not a formal treaty, but a broad arrangement that brings together a number of other agreements and arrangements covering areas such as policy, intelligence and security, joint exercises and training, logistics and science and technology.
The focus of CDR is on maximising the ability of Australian and New Zealand forces to operate together. This has placed emphasis on intelligence sharing, swapping notes on equipment purchases and a significant range of joint activities and exercises. At their annual meeting last month, our two Defence Ministers reaffirmed the importance of the alliance relationship under CDR and our inter-operability.
So the defence relationship is in good shape. With regard suggestions that New Zealand is not pulling its weight on the defence front I would point out the following: New Zealand has a fully funded long-term development plan that provides for $3 billion to be invested in defence capability over the next 10 years. That’s not bad for an economy the size of Queensland’s. New Zealand is not only very active, together with Australia, in our own region but we are also punching above our weight in the war against terrorism.
The Pacific region has suffered increasingly from political conflict and instability. Population pressures, land disputes, ethnic tensions, failing economies, corruption and loss of the rule of law are common factors in Melanesia. The Solomon Islands, Papua New Guinea, Fiji and Vanuatu have all been affected by instability. Nauru is just about bankrupt.
These problems, of course, have a direct impact on the well being of the people of these countries, and also on stability and prosperity in the region. We have a commitment to work to help resolve these problems. It’s in our interests not to see conditions created which spawn international crime and which could also provide cover for terrorist organisations.
Edited transcript of the speech given to Women in International Security, Australia (Research Institute for Asia and the Pacific, University of Sydney) on August 25, 2004.