09 June 2023

Address to the New Zealand Institute of Economic Research and Auckland Business Chamber, Auckland

Address to the New Zealand Institute of Economic Research and Auckland Business Chamber, Auckland

40 years of Closer Economic Relations

Kia ora.

Here, in Tamaki Makaurau, I want to pay my respects to the traditional custodians of this land, and all the First Nations people of our two great countries.

This year, in Australia, we have the chance to move forward and make right with a vote for a Voice in our constitution for those who were the first to walk our lands –

Learning, in part, from the example of New Zealand, and the way that you have brought people together in the cause of reconciliation, recognition and respect.

This is just one example of how our histories are different, yet aligned at the same time –

And it’s this shared story, these shared values that are a big part of the reason why I was so pleased to accept this invitation from the Institute and the Chamber to speak with you today.

Simon, Jason and Christina – you’ve proven that Kiwi hospitality doesn’t disappoint – thank you for the way that you’ve welcomed me and my team today –

And to everybody else gathered in this room –

Economists, members of the New Zealand business community, policy makers, interested observers –

Thanks for being here – I appreciate it.

Last month marked the Albanese Government’s first anniversary and I think it’s fair to say our relationship has stepped up a gear or two in the past 12 months.

I’m the seventh minister of our new Government to visit New Zealand, and 12 New Zealand ministers have visited Australia over the same period.

We were delighted then PM – and soon to be Dame Jacinda – was the first foreign head of government to be officially greeted on Australian soil by Prime Minister Albanese.

And we were honoured when Prime Minister Hipkins chose Australia to be his first overseas visit as PM and that he was able to visit again in April.

On that trip, the PM and I talked over dinner with businesses from here and across the ditch –

About the shared opportunities that’ll come from closer collaboration between our countries –

And a relationship which has always been marked by reciprocity and respect.

I’m glad that we were able to act in that spirit by announcing a new direct pathway to Australian citizenship for New Zealanders –

Because this better aligns with the rights Australians enjoy here, and because we see reciprocal as respectful.

For me, this visit is another opportunity to further strengthen the special bond Australia has with our Kiwi brothers and sisters –

And while there could be a few more maroon jerseys about the place, I feel right at home among New Zealanders.

The area I grew up in, live in and represent around Logan City in South‑East Queensland has one of the biggest contingents of New Zealand‑born residents in Australia.

As I joked with Prime Minister Hipkins in April, there are nearly 700,000 New Zealanders living in Australia, and 699,000 living in Logan.

This all means that I pay pretty close attention to all things New Zealand –

So much so that I’ve been described as the `Member for Auckland’ on social media –

Meant as a jibe I’m sure, but something I wear as a badge of honour.

I should also give a shout‑out to Oz Kiwi, a small team of dedicated volunteers that do so much to support New Zealanders in my community and in communities across Australia.

The way that they do their work, with kindness, respect, a sense of the need to do right by each other, is both a tribute to your country –

And characteristic of it.

It’s why I’ve got such fond memories of being here.

Your country was the last overseas holiday my family took before COVID –

And here, on Remembrance Day, I was honoured to lay a wreath at the Cenotaph in the Domain.

The affinity between our people is always strong but is felt more keenly on days like that.

Because we know we’re always there for each other, we can always depend on each other, and we will always have each other’s backs –

Whether it be during conflict, our Black Summer Bushfires or the terrible flooding that hit this city earlier in the year –

We’ve never let each other down –

And we share a common commitment to strengthening the resilience of our communities –

Something that was clear in Grant Robertson’s National Resilience Plan –

And what we’re doing at home with the Disaster Ready Fund, to make sure that we strengthen and deepen the capacity of our people to withstand, but also to thrive.

This kind of forward‑looking thinking is typical of Grant – and I’m lucky to call him not just a counterpart, but a friend.

This visit, we’ve had some good opportunities to spend some time together –

With one of the highlights, a very productive 2+2 Climate and Finance Dialogue yesterday in Wellington, with our ministers for climate change, Chris Bowen and James Shaw.

During a busy day, I also got the chance to meet with Adrian Orr, the head of RBNZ –

And John McDermott – who heads up Motu.

Both were great company, with important insights –

And a common commitment to the relationship between our two countries and the shared prosperity it’s built upon.

Nothing demonstrates that better than the Closer Economic Relations agreement –

An absolute triumph of foreign policy foresight, more important today than the day it was struck.

The CER has amplified the bonds that have united Australia and New Zealand for generations – representing our collaboration, cooperation, and commitment to the power of free and fair trade.

Since it was signed by Deputy PM Lionel Bowen and High Commissioner to Australia, Laurie Francis, in 1983, it has proven to be one of the most comprehensive and effective free trade agreements in the world –

Resulting in eight per cent year on year growth in two‑way merchandise trade since it came into force –

And facilitating $224 billion of two‑way investment.

So, today I want to talk a little bit more about it –

How we can make the next four decades even more successful than the first four decades –

And how some of our other common interests will contribute to an even stronger, closer relationship between our two countries over time.

In the immediate term, both of us are grappling with similar economic challenges –

Particularly when it comes to cost‑of‑living pressures.

Inflation is due to stay higher than we’d like for longer than we’d like, here and back home.

And in response, we’re both dealing with the fastest tightening cycle in both our countries since the inflation targeting era began –

Here, in New Zealand, rates have increased 525 basis points since October –

In Australia, 400 basis points since the first rate rise in May 2022.

This, along with global challenges, is slowing our economies considerably.

While yours will be supported by disaster rebuilding efforts this year, in the next it is forecast to grow at around 1 per cent –

And in Australia, we’re due to slow to 1½ per cent growth in 2023‑24.

This is starting to come out in the data –

With growth moderating in the New Zealand economy –

While this week, our national accounts showed that Australia grew by just 0.2 per cent in the March quarter.

So, both of us have a lot coming at us, but we’ve got some things going for us too.

Unemployment, while ticking up, still has a three in front of it –

With participation close to an historical high.

We’re also both seeing the welcome beginnings of wages growth – the strongest in over a decade –

In New Zealand, by 4.3 per cent, and at home, by 3.7 per cent in the year to March.

These through‑lines between the economic circumstances we both face, the strengths that we maintain –

Unsurprisingly, means that we adopted similar approaches in our last budgets, delivered 9 days apart.

Both of us provided support, where we responsibly could, to the most vulnerable –

While putting in place the foundations to grow the right way out of the slowdown through investments in the energy transformation, skills, housing, and the opportunities of the digital economy.

At home, our focus on responsibility means we’re expecting the first surplus in 15 years, then smaller deficits and less debt than forecast in March last year –

Significant progress towards a Budget which can support the prosperity of our people now, and into the future.

Managing our challenges, while making the most of our opportunities –

It’s a theme that has been touched on often during this visit.

And one thing that I put in the opportunity basket –

Something that New Zealand is way ahead on –

Is coming up with a better way to capture how we’re tracking as a country, as a society –

In delivering people what they need to build the futures they deserve.

Your Wellbeing Budget is a great framework for us to learn from, as we work to deliver our own Measuring What Matters Statement this year.

In doing this, we recognise that traditional economic metrics are critical – Grant and I share that view.

But other things are important too.

The state of our environment –

Our health –

The way that people do or do not feel connected to their communities.

These things matter –

All go to that core aspiration of enabling our people to live with meaning and with purpose.

And better measuring progress towards that goal –

Of a stronger, fairer, more resilient economy and society –

Is something that I’m looking forward to my country doing as well as yours.

Of course, we won’t see the fruits of that immediately –

It’ll take time to collect the data, to analyse, and respond –

But what Measuring What Matters is about –

What the Budget was about –

Is putting the right foundations in place so that we can make progress.

For an example of the kind of benefits good foundations can lead to, you don’t need to look much further than the CER.

For forty years, it’s underpinned a trade success story that is pretty much unparalleled anywhere in the world –

And I’ve already mentioned some of the impressive outcomes it’s underpinned –

In facilitating the trade of goods and ideas, in ways that’ve only improved our countries over the last forty years.

Over the next forty, this trade success story will continue –

Written by businesses on both sides of the Tasman.

But this needs to be supported by government too –

And based on the engagement between the Albanese and Hipkins governments, the CER will only continue to go from strength to strength.

We continue to view it as a key driver of growth, business opportunities and jobs–

As the key to modernising and evolving our trade and economic relationship –

And as the basis of responding to shared challenges and opportunities.

All this feeds through to a common position and approach to so many other things too –

Let me give you three examples.

First, we’re both practical about acknowledging the challenge that will come from the increased economic uncertainty across the globe.

Outside of the pandemic and the Global Financial Crisis, the next two years are expected to be the weakest for global growth in over two decades –

And neither of us will be immune from that.

Second, as free and open trading nations, we continue to press the case for the rules‑based system that has served our nations so well.

And third, we maintain a willingness to share and learn from each other –

Something that was on full display at our joint Climate and Finance Dialogue yesterday –

An area full of risks but also full of vast industrial and economic opportunities for both our countries.

That’s why both of us have made ambitious commitments to reduce greenhouse gas emissions and reach net zero by 2050.

And to get there, it’s essential we continue providing transparency around spending on climate measures in our annual budgets.

But as well as understanding the risks of climate change, it’s critical we work together to take advantage of the tremendous opportunities to align our approach.

The clean energy transformation presents the most significant shift in the world’s economy since the industrial revolution.

As Treasurer, a priority for me is making sure investors and financial markets have the policy certainty, guidance and capabilities they need to mobilise capital and help make the most of it.

That’s why the Australian Treasury is developing our new Sustainable Finance Strategy –

Taking the lead from New Zealand in the work you’ve already done on green bonds and climate disclosure –

So that we can catch‑up, co‑operate, and keep on sharing our experiences.

We also want to learn from New Zealand’s experience in managing the uptake of electric vehicles.

It’s an opportunity Prime Minister Hipkins mentioned when he visited Australia.

We’re collaborating on the Safeguard Mechanism reforms and the National Electric Vehicle Strategy –

Which includes the roll out of EV‑charging infrastructure and our commitment to Australia’s first light‑vehicle fuel efficiency standard.

We’re both at the far‑end of global supply chains, so joining together will give us more choices on EVs and the associated infrastructure –

Something which will be vital for both our economies.

And it also goes to the issue of diversification, which will help both nations build resilience against the increased economic uncertainty that I mentioned earlier.

To conclude, let me again thank the Institute and the Chamber for your hospitality.

This visit is about how we can build stronger, more inclusive and more sustainable economies, together.

I’ve spoken a lot in recent weeks about how this next decade will be a defining decade for all of us.

We have a lot coming at us in terms of economic challenges but we’ve got a lot going for us too, including our strong trading relationship.

Forty years after the Hawke and Muldoon governments signed the CER, the only thing more important than our shared past is our shared and optimistic future.

And I know that if we keep working together and learning together, we’ll keep growing together – another 40 years of partnership even more productive and prosperous than the last.

Thanks very much.