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Australia, NZ progress bilateral economic interests

Saturday 19 July 2008, 1:42AM

By Michael Cullen

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The first formal meeting of New Zealand Finance Minister Michael Cullen and Australian Treasurer Wayne Swan in Wellington today acknowledged 25 years of Closer Economic Relations and discussed the shared goal of a Single Economic Market (SEM).

The SEM is a long-term strategic objective and a priority for both New Zealand and Australia. A range of related activities are already in progress, as well as a range of supporting technical work.

As well as reviewing a number of significant SEM achievements so far and discussing future development opportunities, Dr Cullen and Mr Swan made several SEM-related announcements.

* A new arrangement on private retirement savings portability between Australia and New Zealand will be settled by October this year. Both countries will then undertake the necessary steps to allow the transfer of retirement savings between complying Australian superannuation accounts and KiwiSaver accounts.
* Australia and New Zealand will progress negotiations on an Investment Protocol that aims to encourage investment in both countries. The intention is to conclude an agreement in early 2009.
* Negotiations are progressing well for a new tax treaty between Australia and New Zealand. Officials expect to conclude negotiations by the end of this year.
* A treaty on Trans-Tasman Court Proceedings and Regulatory Enforcement Treaty is close to finalisation, and the New Zealand and Australian Governments will sign it on 24 July in Christchurch at the Standing Council of Attornies-General Meeting. This will benefit businesses and individuals on both sides of the Tasman by resolving legal disputes more effectively and at lower cost
* Substantial progress has been made across an extensive range of issues under the Memorandum of Understanding on Business Law, in particular the entry into force of the Treaty on the Mutual Recognition of Securities Offerings.
* Agreement to consider proposals for the mutual recognition of imputation and franking credits.

The Ministers also took the opportunity to discuss challenges currently facing the New Zealand and Australian economies including the global financial crisis, rising global food and oil prices, and to share experiences on these matters. Dr Cullen and Mr Swan also discussed New Zealand and Australia’s mutual interests and engagement in regional and international arenas such as APEC, the Pacific Islands Forum and the IMF.

A particular area of interest for both Ministers was climate change and the progress Australia is making towards designing and implementing its Carbon Pollution Reduction Scheme. The Ministers agreed on the importance of New Zealand and Australian officials maintaining close contact to maximise prospects for future compatibility and harmonisation of the Australian and New Zealand systems with each other and with other future emissions trading schemes.