Hon Peter Costello Treasurer
Hon Dr Michael Cullen New Zealand Minister for Finance
JOINT MEDIA STATEMENT

Ministers Enhance The Trans-Tasman Business Environment

An agreement to progress cooperation on banking and competition regulation and the establishment of a Trans-Tasman Accounting Standards Advisory Group were among the many issues discussed today by Treasurer Peter Costello and New Zealand Finance Minister Michael Cullen during their annual bilateral meeting.

Today’s discussions made significant progress toward trans-Tasman business integration with the aim of building on the CER (Closer Economic Relations) agreement towards a single economic market based on common regulatory frameworks.

"We have agreed on the importance of working closely together in the development of our competition regimes as a means of improving the conditions for business on both sides of the Tasman. Already, our policy and enforcement agencies are working together to improve cooperation and coordination within our regimes in a number of key respects (eg improved information sharing and exploration of the potential for cross appointments between competition authorities).”

“We have also agreed to conduct research to explore ways of improving the integration of our competition regimes. Issues that may be considered include improved co-ordination of authorisation processes, joint decision making on trans-Tasman issues by competition authorities and co-ordinated/combined institutional frameworks. We will shortly finalise terms of reference."

Mr Costello and Dr Cullen announced a plan to reduce transaction costs for businesses through the development of common trans-Tasman accounting standards.

A Trans-Tasman Accounting Standards Advisory Group was announced to advise the respective Governments and accounting standard setters on ways to reduce costs and improve efficiency by aiming for a single set of standards.

“As well as its work towards developing common standards, the Group will foster co-operation in relation to the broader debate on the development of international standards. In doing so, it will seek to promote links with other accounting standard setters in the region.”

The group was foreshadowed at the CER Ministerial Forum last August and includes representatives from Australian and New Zealand standard setters, and Australia’s Financial Reporting Council.

Following ANZ’s acquisition of the National Bank of New Zealand, Australian banks now occupy over 80 per cent of the New Zealand banking market, and Australia’s four major banks are also New Zealand’s four major banks.

“In the light of these developments, we agreed that closer integration of the two markets is welcome, subject to the need to maintain the safety and stability of both financial systems. We have agreed to work to mutual recognition and harmonisation in prudential regulation,” the Ministers said.

Mr Costello and Dr Cullen have agreed that Australia and New Zealand will jointly negotiate tax information exchange agreements wherever practicable. Joint negotiation of these agreements reflects our two countries’ common interests in the principles of transparency and effective exchange of information, which underlie the OECD’s Harmful Tax Practices Initiative and work on Bank Secrecy.

These agreements will facilitate the exchange of tax information between countries, enabling Australia and New Zealand to obtain tax information which will help protect the integrity of our tax systems, protect businesses from unfair competition and contribute to efforts to counter drug trafficking, money laundering and the financing of terrorism. Australia and New Zealand intend to negotiate a network of such agreements including in the Pacific region.

Mr Costello and Dr Cullen, also announced the commencement of information exchange negotiations with the Caribbean state of Antigua and Barbuda. These are the first information exchange negotiations for both Australia and New Zealand.

Mr Costello and Dr Cullen discussed the success of joint efforts in the region, most notably the substantial progress made by the Regional Assistance Mission to the Solomon Islands (RAMSI).

Under the leadership of Australia and supported strongly by New Zealand and many other Pacific Island Countries, RAMSI is restoring law, order and good economic management to the Solomon Islands.

Mr Costello and Dr Cullen discussed their mutual concern at the current lack of progress in multilateral trade talks.

“Progress in multilateral trade negotiations is vital if the gains from trade are to be shared by all, in particular, those from the world’s poorest countries.” Ministers said.

“For Australia and New Zealand, the multilateral trading system is the bedrock for our participation in the global economy. Supporting and advancing this system is amongst our highest economic priorities. Australia and New Zealand stand ready to work toward a successful round.”

ENDS

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