What is to be done about the differences over the Tasman?

President George Bush’s reach is long, right down to the Tasman and between this country and Australia while he, John Howard and Labour here stay in office.

Bush didn’t make the division. But he has widened it. What is to be done?

First, recognise the differences that owe nothing to Bush.

Yesterday was Australia Day. Friday next week is Waitangi Day. Two more different national days would be hard to imagine: one honouring the inauspicious landing of convicts at Sydney cove, a colony dedicated to savagery, contemptuous of the “savage” inhabitants; the other commemorating the auspicious signing of an deal enabling two peoples to live in the same land, initiated by an empire respectful of “noble savages” and promising peace.

Now Australia Day wears a tincture of triumph: a middle-power swagger, a habit of winning. Waitangi Day medicates au unsteady national psyche.

There are huge differences of size, geology, history, climate, flora and fauna — and geography: this country is in the Pacific, Australia under teeming Asia.

For much of the 164 years since 1840 those differences have made the Tasman a trench not a ditch, a gulf not a pond. Even though most of the population in each country hail from much the same imperial stock, their different vantage points have generated different outlooks on the world.

This has been especially so in defence. The two countries divided a century ago over creating a local navy, six decades ago over where our troops should fight in world war II, four decades ago over how deeply to get involved in Vietnam, in the 1990s over how much to spend on the military and in this decade over what to use troops for.

This division is a canyon. Australian journalists’ and commentators’ focus on this country is mostly on pejorative comparisons between this country’s multilateralism, peacekeeping and parsimony and Australia’s alliance orientation, front-foot militarism and star wars ambitions. They reflect official Canberra’s frustration or despair at what it sees as irresponsible waywardness here.

This can be serious. The version Australians give of what transpired in the few weeks before the Solomons commitment last year and the New Zealand version are irreconcilable, not just in interpretation but on the facts. As seen from here, the Australians’ version was a worst-case reading of New Zealand’s position. Close mates usually make best-case readings.

Enter Bush, with his long reach. His America-centred division of the world into close allies and the rest has resonated in Australia, which plays the ally to the hilt. Two years ago Australia chose not to forewarn its closest economic partner, New Zealand, of its sudden move to seek a free trade agreement with the United States. It refused a joint CER-US approach for fear of contamination.

Doctors are another example of worst-case thinking. We train doctors. Australia hires them free of training costs. That goes for quite of lot of New Zealand’s “missing million”, amounting to a significant proportion of Australia’s workforce. And the thanks? In 2001 this country was put over a barrel on welfare payments and social services for New Zealanders there. Australians count on only one side of the ledger.

Let’s be clear. This is not some dastardly design, just a fact of life. Defence aside, the official relationship is generally good and, silly jokes apart, so is the unofficial relationship.

The point is that the relationship is asymmetric: Australia is large here, New Zealand small beer there. So this country has to work harder to make the relationship work. Michael Cullen is in Melbourne later this week to talk over coordination of business, competition policy and regulatory law with Peter Costello. The Prime Ministers have their annual talk early March.

But the worst-case presumption has added a discomforting dimension. Maybe it is a flash-in-the-pan or at most a passing phase that will fade when America’s security paranoia eases.

But meantime it makes the long-delayed non-government “leaders forum” an important development.

This is modelled on an Australia-United States annual dialogue of opinion leaders.

Bank of New Zealand chair Kerry McDonald on this side of the Tasman and Qantas chair Margaret Jackson on the other have now assembled two core groups who will distil an agenda for a wider meeting towards midyear.

Wellington hopes a constituency may develop in Australia which will offer counterfactuals to the Australian media’s sledging — perhaps even over time widen the range of commentary. After all, this country is a critical market for a large segment of the Australian economy.

Of course, a bigger military budget here would make a big difference. But that is off the menu, at least while Labour is in office. McDonald and Jackson have a big job ahead of them.

* Annette King insists she wants to stay Health Minister some years yet and not become Speaker, despite musings among her colleagues that prompted my comments last week.