New Zealand is too small and has to get more lined up with Australia, three Australian chief executives of New Zealand organisations told a conference on Saturday.
“If we (Australian and New Zealand) don’t get it together, it’s going to be a Texan boot or something like that that kicks us,” said TelstraClear CEO Rosemary Howard at the conference, organised by Victoria University’s Stout Centre and Institute of Policy Studies (IPS) and part-sponsored by the Australian High Commission and Qantas.
With Howard on the platform were Jane Diplock, chief executive of the Securities Commission and Tony St Clair, chief executive of Federated Farmers — described by former IPS director Arthur Grimes, chairing the session, as “Aussies who have battled their way to the top — the top of New Zealand”.
All unselfconsciously used “we” to refer to their temporary adoptive country. Diplock enthused over a “spectacular country as your playground”, Howard that “New Zealand is incredibly innovative”.
Diplock said New Zealand had a “fantastic story to tell”. Howard gave an example: as early adopters, New Zealanders were a good market for international businesses to try out new inventions –“you can do things faster with customers than in Australia”.
But Diplock laid it on the line: “Size is important in capital markets.” Australia had only 1.7 per cent of the world’s capital market and New Zealand 0.1 per cent. So “it is sheer madness to have barriers (to investment) in the form of different hoops to go through”.
“We should be moving to make one capital market in Australia and New Zealand,” she said.
She acknowledged sovereignty concerns and issues of personalities and culture had meant there were few stock exchange mergers round the world. Nevertheless, other ways had to be looked at to make one capital market to “make sure that what comes to the 1.7 per cent also comes to the 0.1 per cent”.
As one step, she had, she said, discussed with the Australian Treasury the possibility that an offer made in Australia would automatically be made in New Zealand and vice-versa.
Pressed by Grimes to say whether they thought New Zealand should simply adopt Australian business and investment rules (which many New Zealanders regard as inferior), both Diplock and Howard said yes — with reservations.
Diplock: “Adopt them and then hold them up to the light and see how we can make them work.” Howard: “If I had to make a decision, yes, we should adopt them”, though she admitted to a “nervous Nelly” feeling about Australian competition regulator Alan Fels.
Asked whether a trans-Tasman economic community could be formed, as advocated by the parliamentary foreign affairs, defence and trade committee earlier this year, St Clair said that could “be done very easily” for farming.
Only the politicians stood in the way. In fact, last week the government, in a generally tepid response to the committee, fended off the economic community suggestion as “premature”, needing much more public debate and analysis along with “other options”.
Howard said “business is doing it anyway”, though Australian politicians and bureaucrats didn’t understand that.
St Clair, who at five years in this country is a veteran, deplored the duplication of trade negotiations and promotion — two meat selling organisations in Washington, a town which did not distinguish between the two countries, two wool marketing countries — and research effort — “government funding going back and forth across the Tasman”. Separate exchange rates were a barrier to business.
St Clair noted that a foot-and-mouth outbreak — perhaps caused by an act of terrorism by a United States farmer worried about a free trade agreement — would cost New Zealand $5.5 billion, nearly as much as a big Wellington earthquake.
“Who’s going to bail us out if that happens?” he asked. “Our friends across the Tasman”.
Howard listed a number of disabilities: a “negativity” among business leaders, a “defensiveness, a fear of being taken over” and a dearth of players in any one sector. And in this “branch office” economy, head office in Australia too often thought it knew best — “you can’t manage a New Zealand company from Australia”. Yet “nearly all of our top-end customers have their buying decisions made in Australia”.
Howard and Diplock made a special point of a need for better communications in each country about what is happening in the other: “It is critically important to raise consciousness of New Zealand in Australia. Australians don’t see New Zealanders as winners,” Diplock said. Howard welcomed as one step forward the plan by the Australian Financial Review for same-day publication in New Zealand “so we will be reading the same thing”.
The conference ranged also over environmental issues and sporting contact.