A few thoughts about Australia and New Zealand

I’m just back from 3 days in New Zealand with a political delegation. 

A key motivation for me to accept the invitation was the chance to learn more about broadband in New Zealand.  I’ll say more about that elsewhere – although I can’t resist noting that NZ is getting fibre to the premises to 75 per cent of the country at a cost to taxpayers of NZD 1.5 billion.  It looks like remarkably good value compared to Labor’s NBN here, where the total cost is heading north of $50 billion.

But I was also very interested to learn more about politics and policy in our closest neighbour.  So close are our historical ties that at one point it was planned that New Zealand would join the Australian federation – and there is provision for this to happen in the Australian constitution. 

  That didn’t end up happening, but our two countries are more closely linked than just about any other pair of countries in the world.  For example, a number of government and regulatory functions are shared between Australia and New Zealand, such as the work of Food Standards Australia New Zealand.  Since the signing of ‘Closer Economic Relations’ in the early eighties most trade barriers have been removed, and Australians and New Zealanders have a right of free movement between the two countries.

Several conclusions stood out after three days of meetings in Wellington and Auckland.

First, New Zealand’s complicated Mixed Member Proportional (MMP) electoral system, introduced in the mid-nineties, is not something we should replicate in Australia.  Each voter gets two votes: one for the candidate in his or her electorate (of which there are 70) and one which goes towards determining the composition of the remaining 50 members of the House, who are chosen from lists nominated by each party.  (A further complication is that there is a Maori electoral roll as well as the general roll, and those on the Maori roll are voting not for a candidate in their local electorate but instead a candidate in one of seven Maori electorates.)

The result of the system is to guarantee coalition governments as it is impossible for either major party to secure an absolute majority. In turn, this makes it harder for governments to strike out in a clear direction, or to execute upon a mandate conferred upon them at an election. Yet while the system weakens the major parties in this way, perversely it strengthens the parties because they choose the members who are on their lists.

Second, while both Australia and New Zealand are prosperous and successful countries, there is a growing wealth gap between Australia and New Zealand – powerfully symbolised by the exchange rate.  Today one Australian dollar is worth around NZD 1.35. This reflects amongst other things Australia’s mineral wealth which, in the main, New Zealand does not share. 

The gap is continuing to drive a steady ‘brain drain’ of well qualified, ambitious New Zealanders coming to Australia.  This has been going for many years, as I have seen for myself in my years in the legal profession: many of Australia’s most able lawyers are New Zealanders who moved here either upon finishing law school, or mid career.  But the numbers are quite striking – net migration from New Zealand to Australia is presently running at around 3,000 per month, with a spike upwards following the Christchurch Earthquakes.

Third, the closeness of the governmental and economic relationship between Australia and New Zealand serves both countries well.  In one sense, the ‘brain drain’ is simply the corollary of the fact that the two countries effectively have a single labour market – and if there are jobs in Australia then New Zealanders will move to fill them.  One anecdote made this point to me powerfully: following the Pike River Mine disaster in New Zealand in late 2010, Australian mining companies arrived in town to offer jobs to the laid off miners.  Several of those miners are now working in Australia’s booming resources sector.

My fourth and final observation: Maori people are a more powerful political voice in New Zealand than are aboriginal people in Australia. A couple of factors seem to be important here: Maori are around 13 per cent of the population (versus aborigines at under 2 per cent) and there is a national Maori language, whereas there are hundreds of aboriginal languages in Australia.

My visit to New Zealand was instructive – and left me better informed about one of Australia’s important international relationships.