Why NZ and Oz must cosy up

ANZ Bank New Zealand chief executive David Hisco has called on Kiwis and Aussies to work more closely together. Speaking at a Trans-Tasman Business Circle lunch in Sydney recently, Hisco said unless they do so both countries risk being swamped or becoming irrelevant to larger nations in years to come.

Hisco stopped short of advocating currency, economic or political union but pushed New Zealand to be more open to the idea of overseas investment.

“Kiwis need to acknowledge and accept that over a 200-year period New Zealand has always prospered as a result of foreign investment and by being an attractive trading partner,” he said.

He conceded that foreign investment can be an emotional topic in New Zealand “particularly if it’s stoked during an election year by politicians appealing to the worst in people’s characters”.

Hisco, who was born in Adelaide, has spent significant portions of his working life on both sides of the Tasman. Now based in Auckland, he said our “two small countries, rich in resources” should stand together to be heard “as the world’s more populous nations grow larger and faster than we could ever hope to”. 

Hisco called on the Prime Ministers of both countries to look for ways to demonstrate that working together can deliver better outcomes. 

“Maybe start with simple things like sharing some diplomatic posts,” he said. 

“I’d like to see us, as New Zealanders and Australians, do more together to help each other get our fair share of the global pie.”

In a wide-ranging speech comparing the performance of our two countries, Hisco said he was “puzzled” by contrasts in the nations’ tax regimes. 

“New Zealand has about 4.4 million people, yet it survives with a 33 percent top tax rate, no capital gains tax, no payroll tax, and a GST rate only 5 percent higher than Australia’s. New Zealand really is open for business,” he said. 

“Australia has over 23 million people, a 47.5 percent top personal tax rate – let me spell it out: that’s 14.5 percent higher than New Zealand – capital gains tax, stamp duties and a raft of other taxes.”

He also noted that New Zealand recently jumped five places to 18th in the World Economic Forum’s Global Competitiveness Report while Australia declined one place to 21st.

“That drop, the report says, was because of higher cost structures, large regulatory burdens and labour market rigidity.” 

Hisco said he has come to the conclusion that “while New Zealand might not be ‘The Lucky Country’, it certainly is ‘The Plucky Country’”. 

He called on both countries to be nimble and think outwardly if we are going to succeed. 

“And we have to trust each other,” he said.