The 75^th anniversary of the Institute of International Affairs is an auspicious occasion. I understand there is a wide programme of activity to celebrate, including a national conference.

So, thank you for asking me to share some thoughts with you today on the topic of a trans-Tasman single economic market.

I'd like to begin by acknowledging Hon Hugh Templeton, Hon Russell Marshall, His Excellency Paul O'Sullivan, Emeritus Prof Gary Hawke, Prof Philippa Mein Smith, and Bryan Lynch.

I won't take time charting the historical course of the trans-Tasman trade and economic relationship.

Even in an increasingly interdependent world I doubt there is anyone here who would argue that New Zealand's relationship with Australia is not our most important relationship.

Our people-to-people relationships, cultural, social, sporting, trade, and economic linkages are broad, deep, and complex.

Imagine for a second the implications of trans-Tasman travel privileges being removed, access for our goods and services being restricted, and restrictions being put on banking, insurance companies, and telecommunications investments.

It actually doesn't bear thinking about.

The ambition of both governments to accelerate the achievement of a single economic market is a logical consequence of that historical course - a course which has brought substantial benefits to our citizens and businesses.

Any discussion about what we mean by a single economic market should not start by debating the benefits or otherwise of a single currency, a common monetary policy, or a single tax regime.

It's far too early to put these issues on the table. In fact, they may never be considered a practical possibility.

To do so risks a distraction that fails to communicate the value of achieving deeper integration through accelerating the approach that has served us well so far.

From New Zealand's point of view, the discussion should not be shaped around arguments of sovereignty, rather about how deeper integration can, if managed correctly, improve our long-term economic growth.

As such, the single economic market vision is not an articulated grand outcome but one built on principles that should govern our approach and accelerate the construction of key regulatory outcomes that will deliver a low-cost, innovative, and more seamless trans-Tasman operating environment for businesses.

The level of trade and business integration we enjoy today has been supported by a number of platforms.

They include:

• The trans-Tasman Travel Arrangement, which allows people to move freely between the two countries. More than 450,000 New Zealanders have made Australia their home, and more than 60,000 Australians live here.

• The Closer Economic Relations agreement, which was originally a simple free-trade-in-goods agreement, but today embraces a host of regulatory and administrative arrangements across a wide range of areas.

• The Trans-Tasman Mutual Recognition Arrangement, which is the most advanced mutual recognition agreement in the world, covering goods and professional services.

• And the Memorandum of Understanding on Business Law Co-ordination, which is aimed at reducing costs to businesses operating in both markets.

• Then there are tax and legal agreements, including a far-reaching treaty recently signed on court proceedings and regulatory enforcement.

Importantly, each of these instruments is supported by a complex web of deep political interactions.

The Prime Ministers, the Treasurer and Finance minister, and CER ministers meet annually. In addition, New Zealand Ministers and officials are invited to participate in many of Australia's State/Federal Ministerial Councils. This is unique.

In August we held the joint meeting of senior members of both Cabinets. This was a significant first and reflected the strong commitment shared by both governments to building the trans-Tasman bond.

In short, we share a level of understanding and comfort with each other that is not replicated elsewhere. This is the foundation which underpins our continued enthusiasm to push the boundaries of our unique relationship.

The concept of a single economic market between our countries is not new.

It was first articulated in 2004 by Michael Cullen and the then-Australian Treasurer, Peter Costello.

And I can tell you from first-hand experience that the changes in governments on both sides of the Tasman have seen a fresh and determined assessment of progress.

When Prime Ministers John Key and Kevin Rudd met early this year - and again in August - they signalled a strong and renewed vision for a single economic market in the face of the global financial crisis and economic downturn.

John Key, in his address to the Committee for the Economic Development of Australia, said it was "vital that we join forces with our closest friends to meet these new and pressing challenges together".

He went on to say that for New Zealand "there was no question that at the core of any successful productivity-focused growth strategy lies the New Zealand-Australia relationship".

It's very clear to me that the easier we can make it for companies to operate across the Tasman - particularly by removing unnecessary barriers - then the greater the opportunities for business to make real productivity gains and to take up new opportunities that will underpin long-term business growth.

Our ambition is to make it so a New Zealand company in Auckland or Eketahuna can conduct its business just as easily in Sydney or Woollongong, and vice versa.

We want an environment that supports strong new Australasian commercial partnerships that are looking for, and taking up, global opportunities.

We want international businesses and investors to see the opportunities and value in a strong integrated trans-Tasman market.

To achieve a seamless operating environment for business, we must be committed to reducing and, wherever possible, removing the costs to business of meeting different laws and regulations in each economy.

The logic of removing this friction is compelling.

After all, both governments are committed to achieving the same regulatory objectives, and we apply very similar policy frameworks that underpin our laws and regulations.

And most of our regulations, be they for goods, professional services, or corporate governance, are based on international standards and approaches.

And yet the rules and regulations in both countries are sufficiently different to impose significant costs on businesses operating in both jurisdictions.

And those costs may be enough to put many businesses off expanding across the Tasman.

This no longer makes sense.

Just as Prime Ministers Key and Rudd were asking "why not a future where trans-Tasman travel is as easy as domestic?" my Australian counterparts and I are asking where is the logic in having differing financial reporting frameworks, including accounting standards, and approaches to business insolvency proceedings?

Why can't we contemplate a single company registration for both jurisdictions?  It's important that at the political level we're prepared to push the boundary of possibilities and ambition.

So what are we doing?

Well, John Key and Kevin Rudd have made a commitment to accelerate the harmonisation and alignment of our respective regulations. In August they agreed on a Joint Statement of Intent to accelerate the pace of delivering practical benefits and outcomes to business.

This statement identifies key principles to guide decision-making and the short and medium-term outcomes that both governments want to achieve.

It's worth taking a moment to look at the principles and the logic that underpins them, but which will provide a powerful force for deeper integration.

• Firstly, people in either country should not have to undertake the same process or provide the same information twice. In our computer age, the prospects of achieving this should be good.
  
• Secondly, measures should deliver largely the same regulatory outcomes in both countries and in the most efficient manner. Our respective approaches to regulation mean we already achieve this in many areas, and it should be possible to extend that.

• Thirdly, regulated occupations should be able to operate seamlessly between each country. The Trans-Tasman Mutual Recognition Arrangement already provides that someone registered to practise an occupation in one jurisdiction is entitled to register to provide the same occupation in the other.

For example, the recently signed treaty on court proceedings and regulatory enforcement has opened up the possibility of an architect or an engineer being able to supply their services directly into the Australian market under their New Zealand registration.

And I'm in the process of establishing new requirements for New Zealand insolvency practitioners. This will be a good foundation for developing a trans-Tasman regulatory framework for insolvency practitioners.

I'm also considering work on auditor regulation, and if that proceeds then it could be another candidate for a trans-Tasman framework.

• Fourthly, by working together, our two countries can achieve economies of scale and scope in regulatory design and implementation.

For New Zealand's small economy, the costs of running a comprehensive modern regulatory regime are disproportionately high. By operating where possible under the same regulatory umbrella as Australia we can cut the cost of running our domestic regulatory system.

• Fifthly, products and services supplied in one jurisdiction should be able to be supplied directly in the other. The Trans-Tasman Mutual Recognition Arrangement removes the need for goods to be re-tested or certified in each jurisdiction.

• Sixthly, the two countries should seek to strengthen joint capability to influence international policy design. New Zealand's voice is relatively small but together we will have greater influence.

We work closely together in international forums. We joined forces in negotiating the Asean-Australia New Zealand Free Trade Agreement. We are now thinking of joining forces in some other areas to promote our exports.

• And finally, but most importantly, the framework identifies a principle that signals a move from weighing strictly national benefits in policy development to consideration of net trans-Tasman benefits.

This is a new principle that reflects both governments' strategic belief that a stronger single economic market will provide improved mutually beneficial economic outcomes for both countries.

You can see from such an explicit framework of principles and outcomes that both governments are making it clear they want to move beyond current constraints to find new options for achieving practical medium-term outcomes that will support a stronger trans-Tasman economy.

Let me give you some examples of what we want to achieve.

In the area of corporate governance, our governments would like to get to a point where businesses need to file company information only once to meet the requirements of both governments.

We have taken a step towards this already. The New Zealand Companies Office and Australian Securities and Investments Commission can exchange data relating to companies operating on both sides of the Tasman.

To completely achieve this outcome, both countries will need to align all the information they require businesses to file.

We want companies operating on either side of the Tasman to be able to use a single set of accounting standards and to prepare only one set of financial accounts.

This would not only reduce compliance costs but would further support trans- Tasman investment through confidence in the consistency of financial statements.

Both governments have also agreed to aim for a single insolvency proceeding when an insolvent business has trans-Tasman interests. 

We want to go further than co-operation between our courts and fair and efficient administration of insolvencies. Rather, we should have one cross-border process to minimise the costs and make available to creditors the maximum possible amount of the money they are owed.

I note also that both countries already provide that directors who are banned in one jurisdiction are deemed to be banned in the other.

In the area of competition and consumer regulation, Australia has passed amendments to the Trade Practices Act 1974. These amendments enable the Australian Competition and Consumer Commission to share information with foreign regulators, including the New Zealand Commerce Commission. We are about to do the same.

This will greatly help our respective regulators when it comes to cartel investigations.

We will also do work on aligning our respective enforcement and penalties regimes. To help these co-ordination efforts we want to see cross-representation on the respective commissions.

In the medium term, we want to see a seamless processing regime for the granting of patents and the registration of trademarks, plant variety (or breeders') rights, and a single trans-Tasman framework for regulating patent attorneys. This will significantly cut cost for innovative businesses seeking to protect their intellectual property.

I have touched on only some of the outcomes  both governments are committed to achieving, but I'm sure it's clear that the Commerce portfolio, with responsibility for the framework of laws regulating the broader business environment, is central to accelerating the achievement of a single economic market.

More broadly, I will talk briefly about the issue of single institutions.

A single economic market often raises the prospect of trans-Tasman regulatory institutions and whether or not there should be a single regulator.

Though this option should not be ruled out as a matter of principle - and, indeed, I can see a time when we might have the likes of a single set of standards and conformity assessment institutions - it's important to appreciate that joint institutions are not in themselves necessary to achieve the benefits of a single economic market.

Mutual recognition of regulatory outcomes can at times be the most efficient way to co-ordinate because it allows for some variation in approaches while still delivering direct benefits to business.

We can achieve many of the benefits of a single economic market through a virtual or networked regulatory solution.

Under this approach each jurisdiction retains its own regulatory arrangements, but a business operating on both sides of the Tasman can expect to receive similar treatment and face similar rules and enforcement.  Consequently, that business can operate with confidence in both markets.

Trans-Tasman policy and regulatory agencies today work closely to increase alignment and help each other in cross-jurisdictional issues.

The Chair of New Zealand's Securities Commission, Jane Diplock, has suggested that the virtual regulatory solution might work well in the case of securities markets.  And we already have mutual recognition of our securities offerings.

There are a range of other areas in securities markets where progress toward a virtual solution may be possible. For example, financial advisers and exchanges. 

I'm keen to see this concept explored and tested fully through the single economic market outcomes framework process.

Which brings me to the work we're doing to ensure New Zealand has a sound regulatory regime that supports efficient and dynamic financial markets.

Part of getting the framework for a single economic market right is ensuring we have appropriate domestic regulatory frameworks in place.

The Government is working on priority initiatives to ensure our capital markets are effective and efficient, and play their role in supporting economic growth.

The events of the past 12 months have highlighted the gaps in New Zealand's financial sector regulatory framework.

Since the election we have moved swiftly to close those gaps, and we need to do this in close co-ordination with Australia.

We are also implementing the Financial Advisers and the Financial Service Providers legislation, which will require the regulation of financial advisers by the Securities Commission and the registration of all financial service providers, and which will encourage professionalism and public confidence in the sector.

The Government aims to have the regime fully in force by the end of next year. This will open the way for financial advisers to operate across the Tasman without further approvals.

I talked at the beginning about the complex web of trans-Tasman political interactions.  If anything these are strengthening.

When the Australian Minister for Finance and Deregulation, the Hon. Lindsay Tanner, suggested New Zealand participate in the key Council of Australian Governments Business Regulation and Competition Working Group, I immediately accepted.

This group is tasked with advancing key elements of the Australian domestic regulatory reform agenda. To be able to participate in that process and contribute a New Zealand perspective is a very valuable opportunity to enhance regulatory coordination.

The Australian regulatory reform agenda has many parallels with the reform efforts being pursued by New Zealand.

Like us, the Australian Government is committed to reducing the regulatory burden on businesses, non-profit organisations, and consumers.

Through the Council of Australian Governments they are pursuing more seamless national markets by way of greater regulatory harmonisation across the States which will include:

• A single national consumer law.


• A single national approach to consumer credit.


• Commonwealth administration and enforcement of product safety law.


• A single law and regulatory approach for trade measurement, and ...


• A single approach to worker licensing requirements.

These initiatives will have positive implications for New Zealand businesses which will no longer have to deal with different approaches in different states.

I will today conclude by saying this is an exciting time in the trans-Tasman relationship.

There is a strong rapport between the Prime Ministers and between senior ministers.

As an example of that, as Minister of Justice I have stepped up New Zealand's relationships and involvement with Australia.

Early next month I'll be attending my third meeting this year of the Australian Standing Council of Attorneys-General.  Whereas in the past New Zealand's involvement in that forum has been limited, this Government sees the opportunity to participate in it as a means of advancing co-operation in the justice area with Australia.

And I'll be in back Canberra late next month to touch base again on single economic market matters with Lindsay Tanner and other ministers.

Believe me, there is a high level of shared political commitment to accelerate the pace of achievement of a single economic market to provide greater opportunities for businesses from both countries to grow and respond to global opportunities and challenges.

We have identified a clear framework of principles and outcomes to drive the progress and deliver early benefits to business.

I note that officials' processes are already in high gear, and I will be working very closely with my counterparts in Australia to ensure we make progress on a framework that's enduring.

This is where relationships between Ministers of both Governments matter. I can't stress enough the importance of those relationships.

Because, when something goes wrong you need to be able to pick up the phone and talk directly to your counterpart to fix it.

In the end, it's the strength of those relationships that will probably determine how successful we are.

I know it won't all be plain sailing, but I'm confident we can make solid progress.

We can do that by setting high levels of aspiration, by being clear about the outcomes we want, by breaking the work down into manageable chunks, by being prepared to make progressive change and not shying away at the first hurdle -- and by maintaining strong relationships that perhaps can only be forged between New Zealanders and Aussies.