A recent business survey in New Zealand has revealed that 80 per cent of businesses want to share a common currency with Australia. The business people see obvious advantages. With so much trade with Australia, they do much of their export business in Australian dollars. The Australian dollar is a much traded currency. Indeed, the volume of trade in the Australian dollar is far greater than the size the Australian economy would otherwise warrant. As a major world currency, New Zealand business would trade with third countries in the Australian dollar. How much more convenient it would be to have the same currency.
Since the early 1970s the Closer Economic Relationship pact between the two countries has resulted in a common market with no customs duties and very few restrictions on the movement of people. There is quarantine, but it is not as strict as between Australia and other countries. There are limits on claims by nationals of one country on the social security system of the other, but, once again, each country’s nationals get more favourable treatment in the other country than nationals of other countries.
New Zealand also joins most of the ministerial councils held among federal and state ministers. We have mutual recognition not only between the Australian states but also between the states and New Zealand on food and a range of other matters. Minsters are working towards more uniformity in things like commercial and corporate law.
The emotional and social ties are strong. New Zealanders use a language that most Australians would recognise as English. And Australians use a language that most New Zealanders can understand. We fought side by side at Gallipolis and in later conflicts.
We are great contestants. To paraphrase George Bernard Shaw, Australia and New Zealand are two countries divided by common sporting pursuits. Or Oscar Wilde, we share everything with the New Zealanders these days, except, of course, Australian Rules (more’s the pity). Foreigners see more similarities in us than we see ourselves. Indeed, many Americans assume we are the one place.
More seriously, these is not much Australia could do to prevent the unifying of the currency if New Zealanders really wanted to use the Australian currency as their own. New Zealand, like Australia, has an openly traded currency. New Zealanders can run bank accounts in Australian dollars, including credit cards. Several Latin American countries have from time to time adopted the US currency as their official currency, most recently Ecuador and Peru. It has help stabilise their currencies. But New Zealand is not in that bad a state. Most New Zealanders would not willingly adopt the Australian currency as their own, even if New Zealand business does most of its export business in Australian dollars.
Politically, from a New Zealand point of view a unitary currency would have to be a new currency, with new notes, like the Euro. But as the Australian economy is seven times that of New Zealand there is nothing in it for Australia. About the best that can be said of the possibility for Australia is that a new currency would give us a chance to give our currency a unique Australian name. That chance was missed in 1966 when a hurried decision was needed to replace the absurd idea by then Prime Minister Robert Menzies to call the new currency the Royal. But we moved from one cultural cringe to another.