Prime Minister Jacinda Ardern and Australian Prime Minister Anthony Albanese at their joint press conference in Sydney on Friday

The Australian Prime Minister’s announcement on Friday that he would look at the way New Zealand migrants were treated marks a big thaw in relations between our two Governments.

But though the atmospherics have undoubtedly changed, the issues that divide us remain the same.

And shortly after the announcement, an Australian Minister made it clear that the decision was as much in Australia’s self-interest as anything else.

Like New Zealand, Australia needs migrants, and the worry now for New Zealand is that if it becomes easier for New Zealand migrants to live in Australia, more might cross the ditch.

And indeed, across a range of issues, a good argument could be made that the Tasman gap is getting wider.

That much was evident in two days of intensive talks in Sydney last week.

On the one hand, were the formal Prime Ministerial and Ministerial talks between the Australian and New Zealand Governments.

And on the other, across the central business district at the Darling Harbour Convention Centre, over 200 Australian and New Zealand business leaders and (from New Zealand) senior Government officials and from both countries, 13 Ministers took part in the two-day Australia-New Zealand Business Leadership Forum.

At the top level, Prime Minister to Prime Minister; Minister to Minister, the advent of the  Albanese Government has demonstrably changed things.

There was a sense among business leaders at the Forum that the Morrison Government had well and truly run its distance. It had become remote, stopped listening and even CEOs of Major companies complained they could not get access to Ministers like Treasurer John Frydenberg.

(POLITIK cannot put names to comments from the Forum under the Chatham House roles it took under – though some Ministerial speeches were on the record.)

Ministers went out of their way to point up their connections with New Zealand.

POLITIK Australia Trade Minister Dan Farrell

Trade Minister Don Farrell talked about his post-University four-month stint in New Zealand, travelling from one end of the country to the other.

And he heaped praise on New Zealand Trade Minister Damien O’Connor and his work at the recent  World Trade Organisation meeting, where O” Connor played an integral role in securing agreement on an end to fishing subsidies.

Farrell was impressed with the way O’Connor was prepared to negotiate all night.

“This bloke, sometimes they were there at five in the morning,” he said.

“I have to say just how lucky the New Zealanders are to have somebody like you (O’Connor) representing them.”

It was a similar story with Australia’s new Treasurer, Dr Jim Chalmers, and Finance Minister Grant Robertson.

They already knew each other well before the election, partly because Chalmers had written a book on Robertson’s great passion, the future of work.

But if Chalmers inspired Robertson on that, the process is now in reverse, with Chalmers wanting to adopt New Zealand’s Wellbeing Budget approach to defining Budget outcomes.

Chalmers, though, has come up with a more catchy title for the methodology. He is calling it “Counting what Matters”, apparently to the frustration of the New Zealand Minister, who regrets not having thought of it himself.

POLITIK Australia Treasurer Jim Chalmers and prime Minister Anthony Albanese in the talks with Jacinda Ardern and New Zealand Ministers

ALBO AND JACINDA

But the big relationship is between Australia’s new Prime Minister Anthony Albanese, and Prime Minister Jacinda Ardern.

In many ways, they are chalk and cheese, as is evident in their musical tastes.

Ardern has near rock-star status in Australia.

She is a darling of the progressive left, and her perceived politics of kindness has resonated more broadly with a country that had begun to regard its “Bulldozer” Prime Minister Scott Morrison in much the same way New Zealanders regarded Sir Robert Muldoon.

Her visit got widespread media coverage, and when she appeared in public (as she did at the David Jones store), the crowds were out.

In the more sedate surroundings of the Lowy Institute, the Institute’s Research Director, Hervé Lemardieu, referred to her previous “calling” as a drum and bass DJ.

Walking into the Business Forum dinner, Albanese said to Ardern that the last time had been in Sydney’s International Convention Centre had been two weeks ago to see Jimmy Barnes.

The hard-rocking “Working Class Man” Barnes and drum and bass are generations (and lifestyles) apart.

It would be a mistake to assume that though Albanese and Ardern are good mates that Australia is ready to move on fundamental aspects of the trans-Tasman relationship.

That most notably means foreign policy.

ANU Emeritus Professor of Strategic Studies Hugh White — author of “Sleepwalk to war; Australia’s unthinking alliance with America”

ALL THE WAY WITH THE USA

Ardern has spent the past fortnight delivering subtly different speeches on foreign policy to different audiences.

The subtle differences are a product of what the Americans might call the “strategic deniability” at the centre of New Zealand’s foreign policy.

Her problem is that New Zealand and Australian views on China continue under the Albanese government to be as far apart as they were when Scott Morrison was Prime Minister.

The Australian Emeritus Professor of Strategic Studies at Australia National University, Hugh White, in an essay already being widely talked about in Wellington, “Sleepwalk to War” in the “Quarterly Essay”, argues that “this year there has been no material difference between the two parties’ policies on China, and hence no real debate.”

“The explanation for this failure is simple,” he said.

“Behind the point-scoring lies a strong bipartisan consensus that the future of our relations with China lies in America’s hands and that we can, and must, rely on America to fix our China problem for us.

White says that far more than their predecessors in earlier decades, most Australian political leaders, policy-makers and commentators today place immense faith in American power and resolve.

“They take for granted that America can and will convince or compel Beijing to change its ways so that our relations with China can go back to the way they used to be.”

That is not Ardern’s view. But in not expressing it, she has to tread carefully, simply because it is Australia’s view.

So at the Lowy Institute, she must have raised Australian eyebrows when she said France, Japan, the UK, the US, and China had all played a role in the Pacific for many, many years.

“It would be wrong to characterize this engagement, including that of China, as new,” she said.

“It would also be wrong to position the Pacific in such a way that they have to ‘pick sides.

“These are democratic nations with their own sovereign right to determine their foreign policy engagements.”

China acknowledged this on Friday night at the daily Foreign Ministry media briefing with the spokesperson, Zhao, Lijian, saying they appreciated the comments.

“We are confident in the prospects of the bilateral relations,” he said.

“China is ready to work with New Zealand to follow through on the important common understandings of the two leaders, enhance mutual trust, expand mutually beneficial cooperation, and promote the sound and steady development of the China-New Zealand comprehensive strategic partnership.”

In contrast, Albanese told his Friday press conference with Ardern that Australia’s position was very clear.

“We are going through a period of strategic competition in the region that perhaps it wasn’t the decade or more ago, but under Xi, China has changed its position,” he said.

“It is more forward-leaning; it is more aggressive.

“Australia’s position is that we will continue to engage and co-operate with China, but we will stand up for Australian values when we must.”

POLITIK Finance Minister Grant Robertson with Treasurer Jim Chalmers

RICH COUNTRY, POOR COUNTRY

Despite these current differences in the relationship, Australian Ministers speaking at the Business Leadership Forum, made it clear they want to mark the 40th anniversary of the signing of the Closer Economic Relations agreement between the two countries by defining new ways the relationship can go forward.

“There’s absolutely no reason why the relationship between Australia and New Zealand, this can’t be the best relationship between two countries anywhere on the planet,” Chalmers told the Forum.

“And we’re really serious about that.”

But over-riding all this is that Australia keeps getting wealthier while New Zealand stalls.

What emerged from the business leaders attending the Forum was that the economic relationship now is challenged by labour shortages in New Zealand being exacerbated by New Zealanders leaving for Australia.

That is hardly surprising — since 2004, Australian GDP per head has climbed ahead of New Zealand and the average wage in Australia is now more than $400 a week more than in New Zealand.

The chair of one of New Zealand’s largest companies told POLITIK that they feared we were heading back to the Muldoon era when three per cent of the New Zealand population left for Australia between 1976 and 1982.

The New Zealand-born CEO of a major Australian company simply asked, why at the moment would you choose New Zealand?

A senior New Zealand official told POLITIK that New Zealand has three current economic challenges driving people to leave; low wages, high house prices and ongoing high inflation.

Deputy Opposition Leader, Nicola Willis, told the conference that it had been “gutting” in the past couple of days to talk to business leaders who had e illustrated how much growth in both countries’ economies was being choked by the desperate struggle for workers.

“The case for productive growth to restore incomes and purchasing power could not be stronger,” she said.

“And it is incumbent on policymakers to unlock the holding back of that growth.

“So if there is one message from this forum, let it be that revisiting our perspective migration systems must be part of that.”

What the New Zealand business leaders wanted to know was where were their workers going to come from within the next three or four months.

Workplace Relations and Immigration Minister Michael Wood was hardly encouraging.

He conceded that immigration clearly had a critical role in  New Zealand and Australia now in meeting those areas of skill shortages that we faced.

“ So, yes, we need to make sure that we have smart, responsive, facilitated immigration policies in key areas,” he said.

“But if we think that it will always just solve the problem,  we must understand the international labour market problems that we are a part of.

“We are also perhaps sometimes that we need to be resolving those things in the medium to long term.

“And a part of our government’s immigration reforms in recent times have been about recognizing that we do need strong and stable pathways for people.

“But that cannot be an excuse for not taking action now and not having a bit of positive pressure in the system for sectors and employers and governments to be doing the hard work on the skills and training side.”

One New Zealand leader at the Forum told the session that he wasn’t worried about the medium to long term; he wanted to know what action could be taken now.

Australia Treasurer Jim Chalmers told the Forum he had talked about labour shortages with Robertson.

“Part of the discussion we had this morning was about those labour shortages and those skills shortages,” he said.

“As both countries engage in this scramble for talent around the world, as the labour market is being reshuffled by the pandemic, and as our needs in Australia and New Zealand have become so acute and so obvious, we have to work out both of us, this combination of whether it’s migration, participation in childcare, whether it’s training as well which should always be the highest priority and some other measures and steps that we need to take together to attract workers to this part of the world, as well as to make sure that our own populations as well trained they can be,” he said.

And Chalmers offered a hint as to why Australia had agreed to look at relaxing the pathway to citizenship for New Zealanders living in Australia who had arrived since 2001.

“We also obviously as part of dealing with some of those challenges in our labour market and more broadly as well for economic reasons but also for reasons of friendship, we want to strengthen our links between us, and part of that is working with Ministerial colleagues to make sure that at our end we’ve got it perfectly right for New Zealand born friends living in Australia when it comes to the citizenship pathway,” he said.

Cynics might say that was what to expect from Australia. Yes, the atmospherics have changed, but ultimately Australia will do what it believes it needs to do for itself.

There are still clouds over the Tasman.

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