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Australia

Bilateral relationship

The relationship with Australia is New Zealand’s closest and most significant.  It is underpinned by geography and shared historical linkages, values and institutions.  It encompasses close cooperation, especially on trade and economic issues, defence and foreign policy, but extends across the range of government activities.  Migration, trade and other people-to-people linkages have helped shape a robust trans-Tasman sense of identity. 

Extensive engagement at the political level creates a sound framework for the management of the relationship.  The two Prime Ministers have annual bilateral talks and meet also on a number of other occasions through the year.  Foreign Ministers meet in six monthly talks.  CER Economic Ministers, the Ministers of Defence and the Treasurer/Finance Ministers meet at least annually.  In addition, New Zealand participates in more than twenty Australian Ministerial Councils.  Connections are also strong between Parliamentary committees, political parties, and government agencies at officials’ level.

Complementing the very high level of political engagement, senior business and community leaders (including relevant Ministers and Opposition spokespeople) from both countries meet annually as the Australia New Zealand Leadership Forum. The first meeting was held at Government House in Wellington in 2004, the 2009 meeting was held in Sydney in August. The Forum plays an important role by bringing together key stakeholders for high level networking and information exchange,and to explore possibilities for continuing to develop the relationship. Although strongly supported by both Governments, the Forum is a bipartisan, non-government grouping. The 2009 co-chairs were John Allen (New Zealand Secretary of Foreign Affairs and Trade, formerly Chief Executive of NZ Post Group) and Rod McGeoch (Chairman of Sky City Entertainment Group Ltd).

People-to-people contact is a key element of the relationship.  The Trans-Tasman Travel Arrangement allows New Zealand citizens and Australian residents freedom of movement to enter, reside and work in each other’s country. New Zealanders and Australians make almost two million short term visits across the Tasman each year.  There are substantial resident populations of New Zealanders in Australia, and of Australians in New Zealand.

Closer Economic Relations

CER is a series of agreements and arrangements governing trade and economic relations between Australia and New Zealand, built on the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) which took effect on 1 January 1983.  As one of the world’s first bilateral free trade agreements, CER was an ambitious undertaking, and it is still regarded as setting benchmarks for bilateral trade relationships. It has been described by the World Trade Organisation as “the world’s most comprehensive, effective and mutually compatible free trade agreement.”

CER creates a market of more than 24 million people.  It increases the effective size of New Zealand’s domestic market six-fold, and provides Australia with access to another market the size of Queensland.  Bilateral trade has grown rapidly under CER, averaging 6.2% growth per annum since 1991.  Australia is New Zealand’s largest trading partner, taking 23.3% of our total exports and supplying 17.8% of our total imports.  New Zealand is Australia’s sixth largest export market, taking 4.2% of Australia’s merchandise exports.

CER has been continually reviewed.  Since coming into force in 1983, both countries have moved progressively towards deeper and broader integration in policies, laws and regulations through processes of cooperation, coordination, mutual recognition and harmonisation.  CER remains very much a living treaty, and the original agreement has been extended and added to as the relationship has developed.

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Key Aspects of CER

Free trade in all goods was achieved in 1990 with the removal of all tariffs and quantitative restrictions, five years ahead of schedule.

Free trade in nearly all services was achieved under the 1988 Services Protocol allowing New Zealand and Australian service providers access to each other’s market on the basis of national treatment and a “negative list” (i.e. all services were included unless specifically excluded).  Those exclusions are reviewed regularly, and have been substantially reduced: New Zealand maintains two inscriptions (airways services and coastal shipping), and Australia six (air services, broadcasting and television (x2), third party insurance, postal services, and coastal shipping).

Mutual Recognition of goods and occupations:  under the 1998 Trans-Tasman Mutual Recognition Arrangement (TTMRA) most goods legally sold in one country can be legally sold in the other, and persons who are registered to practise an occupation in one country can register to practise an equivalent occupation in the other country.  Five product areas are exempted while standards are brought closer together (therapeutics, hazardous substances, motor vehicles, gas appliances and radio communication standards), as is one occupational group (medical practitioners trained outside of Australia and New Zealand).  The TTMRA enables business to manufacture to a single standard for the trans-Tasman market, provides greater consumer choice, and supports an open trans-Tasman employment market.  A 2003 review of the TTMRA confirmed that it was contributing significantly to increased harmonisation of trans-Tasman standards in both goods and occupations.  A 2008/09 review is underway.

Free Labour Market: a long history of arrangements and undertakings, collectively known as the Trans-Tasman Travel Arrangement, allows New Zealand citizens and Australian residents to enter, live and work freely in each other’s country.  These arrangements are supported by a Social Security Agreement (covering retirement pensions and severe disability benefits), a Reciprocal Health Agreement (providing for “immediately necessary” hospital treatment of short term visitors), and a Child Support Agreement (providing for the mutual recognition and enforcement of child support assessments across the Tasman).  New Zealanders arriving in Australia are automatically issued with a “Special Category Visa” (SCV), which grants the above rights, unless they are of health or character concern.  Since February 2001, New Zealanders living in Australia have needed to obtain Australian Permanent Residence status before they are eligible for Australian social welfare benefits (including the unemployment benefit); SCV holders are not eligible for most Australian welfare benefits.

Joint Agencies: the Joint Accreditation System of Australia and New Zealand (JAS-ANZ) was formed in 1991 to establish an internationally recognised accreditation system for quality management systems, and product and personnel certification in order to generate international confidence in Australian and New Zealand producers and products.

The Australia New Zealand Agreement on Joint Food Standards established the Australia New Zealand Food Authority in 1996 (renamed Food Standards Australia and NewZealand (FSANZ)) to develop joint food standards for both countries.  It also provided for New Zealand membership of the Australian NewZealand Food Regulation Ministerial Council comprising New Zealand and Australian Federal Government Ministers and State and Territorial Ministers.  An Arrangement on Food Inspection Measures (AFIM) came into force in 1997 under which most New Zealand foods entering Australia are treated for inspection purposes as domestic product, and vice versa.  A Joint Food Standards Code, agreed by the Ministerial Council, came into force in 2002. Negotiations are currently underway to improve the operation of the Joint Food Standards Treaty.

Towards a Single Economic Market (SEM)

Following on from the success of CER, successive New Zealand and Australian governments have committed to the long term goal of establishing a seamless trans-Tasman business environment – the Single Economic Market (SEM).  The concept was first discussed in January 2004 by New Zealand and Australian Finance Ministers and has subsequently been endorsed by their successors and successive Prime Ministers. 

The SEM initiative builds on the freer trans-Tasman trading environment created by CER by addressing ‘behind the border’ barriers to flows of goods, services, capital and people.   The SEM is based on the premise that deeper economic linkages provide bigger markets for goods and services, increase access to larger pools of capital and labour, and open economies to new ideas and technology.  The goal is make it as easy for a company in Auckland to do business in Sydney as in Dunedin, and vice versa, by identifying innovative and cost-effective ways to reduce discrimination and costs arising from different, conflicting or duplicate regulations or institutions.  The aim is to ensure that trans-Tasman markets for goods, services and labour operate effectively to maximise opportunities and economic growth in both countries.  This work also has an important part to play in helping to position New Zealand and Australia to address and recover from the impacts of the global economic crisis.

The SEM agenda has already brought significant economic benefits to both countries by lowering business costs and increasing the ease with which both businesses and people can operate trans-Tasman.  A broad range of initiatives to advance the SEM is currently in progress under the following four themes:

Reducing the impact of borders – focusing on reducing and streamlining barriers at the border (e.g. cooperation between Customs agencies to streamline border processing, negotiations on a CER investment protocol; work towards portability of retirement savings);

Improving the business environment through regulatory coordination –reducing behind the border barriers to trade by streamlining trans-Tasman regulatory frameworks (e.g. the entry into effect of a trans-Tasman regime for mutual recognition of security offerings in June 2008, and ongoing work in a range of areas including updating the Double Tax Agreement; near completion of mutual recognition of bans placed on company directors; harmonisation of accounting standards; joint work on banking supervision; and coordination of intellectual property regimes);

Improving regulatory effectiveness – finding ways for regulators to operate more efficiently and effectively (e.g. the Trans-Tasman Court Proceedings and Regulatory Enforcement Treaty, which was signed in June 2008 and will allow enforcement of civil judgements across the Tasman; development of a framework for trans-Tasman cooperation); and,

Supporting business opportunities– facilitating connections between businesses to take advantage of openness in trans-Tasman markets (e.g. in the Australia New Zealand Leadership Forum and through CER ‘business dialogues’ often held in conjunction with the annual CER Ministerial Forums).

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Closer Defence Relationship

Australia and New Zealand have an alliance relationship, and the two defence forces have had the closest of relationships since the shared Gallipoli campaign of the First World War.  The two governments shared an alliance relationship with the United States (ANZUS) from the end of WW2 until the mid-1980s. 

The end of ANZUS as a tripartite alliance led Australia and New Zealand to consider their own arrangements, embarking together on a process known as Closer Defence Relations, or CDR.   The CDR process was also driven by regional stability concerns and by the fiscal constraints facing both defence budgets (supporting cooperative endeavours like the ANZAC frigate project).  CDR is not a formal treaty, but a broad arrangement that spans and brings together a large number of agreements and arrangements including on policy, intelligence and security, logistics, and science and technology.

A major focus of CDR since the early 1990s has been on maximising force interoperability, the ability of both countries forces to operate effectively together.  The emphasis has been on intelligence sharing, harmonising equipment purchases and force structure, and a range of joint activities including doctrine development, planning exercises and exchanges.  In their annual meeting, Defence Ministers have focused particularly on areas in which New Zealand and Australia troops are deployed, as well as on the security challenges facing the immediate region.  They have encouraged regional cooperation in countering terrorist activity, and have emphasised the importance of timely coordinated and effective responses on the part of the Australian and New Zealand defence forces.

There is significant operational collaboration between the two defence forces, which have engaged together in recent years in operations in Timor Leste, Bougainville, Solomon Islands and Tonga.

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Trans-Tasman Cooperative Arrangements

New Zealand and Australia work together across a broad spectrum of governmental and non-governmental activity, and there are many cooperative arrangements in existence.  The following are four examples:

A Single Aviation Market was established in 1996, allowing virtually unrestricted services between and within the two countries.  This arrangement was expanded with the negotiation of an “Open Skies” Air Services Agreement which came into force in 2003, removing restrictions on Australian and New Zealand airlines operating services beyond the other country.

The Australia and New Zealand School of Government (ANZSOG) was established in 2001 by a consortium of the Australian and New Zealand Governments, Universities and Business Schools to develop stronger links between the public sectors on both sides of the Tasman.  Its objective is to enhance policy and management skills, and to invest in the further education and development of high quality public servants destined to become leaders in the public sector.  Since 2002, more than 50 New Zealand public servants have graduated from the school’s Executive Masters in Public Administration course.

New Zealand and Australia share a deep and growing science, research and technology relationship, with collaborative arrangements in place between New Zealand and Australian State Governments, Crown Research and tertiary institutes, and close contact at researcher level.  Vehicles for cooperation include: regular meetings of research, science and technology agencies; the Australia New Zealand Biotechnology Partnership Fund (ANZBPF); the Australia New Zealand Biotechnology Alliance (ANZBA); and New Zealand’s membership of the Commonwealth, State and Territory Advisory Council on Innovation (CSTACI).  New Zealand was a foundation investor in the Australian Synchrotron in Melbourne, which opened in 2007, and in March 2009 it was announced that New Zealand would support Australia’s bid to host the world’s largest radio telescope, the Square Kilometre Array (SKA).

The Australia/New Zealand Bilateral Climate Change Partnership waslaunched in 2003 and includes discussion on climate change policy design and implementation as well as engagement with business on technology development.  There are annual climate change talks held between officials.

Reciprocal Social Sector Agreements

In support of the large numbers of Australians and New Zealanders visiting each other’s countries, agreements have also been negotiated covering reciprocal access to social welfare and health services.

A new Australia-New Zealand Social Security Agreement was signed in 2001 and came into effect on 1 July 2002. The Agreement is limited to the provision of age pensions and severe disability benefits only. Each country now makes part payment for new beneficiaries who have lived and worked in both countries. The combined payment will be comparable to what people would get if they were receiving the age pension or severe disability benefit from the country in which they are living.

The Australia/New Zealand Reciprocal Health Agreement, signed in 1986, allows Australians and New Zealanders making short term visits to each other’s country to receive "immediately necessary" medical care on the same terms as residents of that country. It was amended during renegotiations in 1998 to exclude out-of-hospital (GP) treatment from the scope of the agreement, but still covers access to immediately necessary hospital care for New Zealanders temporarily in Australia (and vice versa). Further information is available from the Ministry of Health.

New Zealand and Australia also implemented on 1 July 2000 the world’s first Child Support Agreement. This Agreement provides for the recognition and enforcement, across the Tasman, of each country’s child support assessments.

Following a Prime Ministerial Task Force in 1999 which identified the need to develop more stable and durable social security arrangements, both Governments decided that payment of social welfare benefits other than for pensioners and the seriously disabled should be the sole responsibility of the country of residence. From February 2001 New Zealanders arriving in Australia are no longer eligible for Australian work place benefits (such as the unemployment benefit) unless they gain Australian Permanent Residency. They are also required to obtain Permanent Residence before they are eligible to apply for Australian citizenship.

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Education

Australians are treated as domestic students under the terms of New Zealand’s Education Act. New Zealanders also currently pay the same fees as Australians for access to all levels of the Australian education system, though restrictions apply in respect of New Zealanders’ eligibility for student income support.


Tourism

Australia is our largest source of foreign tourists, with 976,200 short-term visitor arrivals in the year to December 2008, an increase of 2.7% over the year to December 2007. Australia is New Zealand’s most popular tourist destination, with 949,624 short-term departures from New Zealand in the year to December 2008 (a 2.9% decrease on the year to December 2007).

Environmental

On 7 July 2003, the Hon Pete Hodgson and the Hon Dr David Kemp, Australian Federal Minister for the Environment and Heritage announced the formation of an Australia and New Zealand Climate Change Partnership. The partnership strengthens the extensive cooperation that already exists on climate change and helps both countries to focus on concrete ways to address climate change. A work programme is being developed with areas for possible action including engagement with business and local government on technology development, policy design and implementation, measuring and reducing emissions, enhancing climate change science and working together with Pacific Island countries to address regional challenges posed by climate change.

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Key facts

Geography/Demographics

Land Area - 7.7 million square kilometres   Population - 21.1 million (Australian Bureau of Statistics estimate) - Capital City  - Canberra - Language  - English

Political

Political system - Federal - National government - Australian Labor Party - National legislature - House of Representatives (150 members), Senate (76 members) - Last election - 24 November 2007 - Next election due - 2010 - Head of State - Queen Elizabeth II, represented in Australia by the Governor-General, Ms Quentin Bryce AC, sworn in on 5 September 2008 - Head of Government - Hon Julia Gillard MP, Prime Minister

Economic

GDP - US$ 1,010 billion (2008) - Real GDP growth - 0.4% (2008) - Exports - NZ$ 265.40 billion (2008) - Main export destinations - Japan (22.82%), China (14.54%), Republic of Korea (8.27%), India (6.07%), United States (5.45%), New Zealand (4.20%) - Inflation - 1.5% 2008) - Unemployment - 5.8% (June 2009)

New Zealand Trade

New Zealand Trade (to year ended February 2009) - Major NZ Exports to Australia (NZ million) - Crude Oil (1,949.00) - Gold (556.53) - Wine (312.73) - Cheese (271.60) - Timber (162.18) - Refrigerators, Freezers Etc; (121.44) - Plastic Containers (116.25) - NZ Imports from Australia (CIF) (NZ million)- Petroleum oils, not crude (551.39) - Crude oil (389.71) - Motor vehicles (351.18) - Aluminium oxide (307.58) - Medicaments (257.83) - Wheat (164.74) - Unrecorded media (140.08)

 

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Representation

New Zealand is represented in Australia by:

Australia is represented in New Zealand by:

 

Travel advice

The Safetravel website provides a travel advisory for travellers to Australia [external link].

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Page last updated: Monday, 09 December 2013 13:00 NZDT