Flag of New Zealand

New Zealand country brief

General information

New Zealand comprises two main narrow and mountainous islands, the North Island and the South Island, separated by Cook Strait, and a number of smaller outlying islands. The total land area is approximately 268,000 square kilometres (about the combined area of Victoria and Tasmania). Its maritime EEZ is roughly 430 million hectares, the fifth largest in the world. The capital, Wellington, is situated on the south-west tip of the North Island and is about the same latitude as Launceston. The Southern Alps, containing glacial systems, which have retreated and formed wide glacial valleys and inland lakes, extend the length of the South Island. The Southern Alps include New Zealand's highest mountain, Aoraki Mt Cook (3754 m). The highest mountain in the North Island is Mount Ruapehu (2797m), an active volcano which erupts occasionally, most recently in 2007. Not far from the mountain is Lake Taupo, the largest lake in New Zealand. New Zealand has a cool temperate climate, strongly influenced by oceanographic factors.

New Zealand has a population of around 4.4 million. New Zealand's rate of natural increase is about 1.0 per cent per year. Australia is a major destination for New Zealand migrants and tourists. Traditionally, most inward migration has been from the United Kingdom, Australia and Northern Europe. In more recent times, a growing number of migrants have come from the Pacific island countries, particularly Samoa, Cook Islands and Niue, and from Asia.

Bilateral Relations

Australia and New Zealand are natural allies with a strong trans-Tasman sense of family. Migration, trade and defence ties, keen competition on the sporting field, and strong people-to-people links have helped shape a close and co-operative relationship. Hundreds of thousands of Australians and New Zealanders cross the Tasman each year as tourists, for business purposes, or to visit family members. Over 647,000 New Zealand citizens live in Australia, while there are around 65,000 Australians in New Zealand. Freedom of travel is facilitated through the Trans-Tasman Travel Arrangements of 1973, which allow Australians and New Zealanders to visit, live and work in either country without restrictions.

While New Zealand chose not to join the Australian federation in 1901, it maintains close political contact. At a government-to-government level, Australia’s relationship with New Zealand is the closest and most comprehensive of all its bilateral relationships. Prime Ministers hold annual formal talks, as do Treasurers, Trade and Defence Ministers. Foreign Ministers meet biannually. Ministers and government officials from both countries participate in meetings and conferences on a wide range of issues: health, education, transport, justice, quarantine and many others. New Zealand ministers and senior officials participate, with their Australian federal and state counterparts, in many of the Council of Australian Governments (COAG) meetings which span the Australian domestic policy agenda.

Australia and New Zealand cooperate closely in the international arena and in regional bodies, such as the Pacific Islands Forum , APEC and the ASEAN Regional Forum. The Australia, New Zealand and ASEAN free trade agreement, AANZFTA, entered into force on 1 January 2010. Both Australia and New Zealand cooperate closely in pursuing WTO goals, notably through participation in the Cairns Group – a coalition of 19 agricultural exporting countries seeking the liberalisation of trade in agriculture. New Zealand has made valuable contributions to security in areas of high priority to Australia, notably in East Timor, Bougainville, Solomon Islands (RAMSI) and Afghanistan.

An important annual bilateral private sector-led event is the Australia New Zealand Leadership Forum (ANZLF) which met for the 8th time in Sydney on 12-13 April 2012.  The 8th Forum brought together around 100 government, business and community leaders from both countries under the theme “Australia and New Zealand – together in the Indo-Pacific century”.  The forum was co-chaired on the Australian side by Rod McGeoch AM, Chairman of Sky City Entertainment Group Ltd, and on the New Zealand side by Jonathan Ling, Chief Executive of Fletcher Building.  The 2012 Forum was notable for a dialogue with the Business Council of Australia (BCA) both in a joint CEO session and at a dinner for Forum delegates and BCA members addressed by New Zealand Deputy Prime Minister Bill English.  Ministerial representation from Australia included Senator Penny Wong, Minister for Finance and Deregulation; the Hon. Martin Ferguson, Minister for Resources and Energy and Tourism; and the Hon. Richard Marles, Parliamentary Secretary for Foreign Affairs and Pacific Island Affairs. The Finance Minister and Deputy PM Minister Bill English, Foreign Minister Murray McCully, Trade Minister Tim Groser, Economic Development Minister Stephen Joyce and Commerce Minister Craig Foss attended from New Zealand. The New Zealand Leader of the opposition  David Shearer and Deputy Leader of the Australian Opposition  Julie Bishop also addressed the Forum.

The closeness of the bilateral relationship was emphasised by Prime Minister Julia Gillard’s visit to New Zealand in March 2011 for the Christchurch earthquake memorial service and Australia’s swift and generous response to the earthquake.  Similarly, New Zealand was the first to offer help for the Queensland floods and New Zealand donated NZD4 million to Queensland and Victorian flood appeals and sent a team of rescue workers to assist.  More recently, New Zealand fire fighters provided assistance with bushfires in Victoria in early 2013.

The Australian and New Zealand Prime Ministers hold an annual leaders’ meeting, as a part of a commitment by both governments to the importance of the relationship and an intention to strengthen links further, especially through deeper economic integration.  During her visit to New Zealand for the leaders meeting on 15-16 February 2011, Prime Minister Gillard became the first foreign leader to address the New Zealand Parliament.  Prime Minister Key visited Melbourne for the leaders’ meeting on 27-29 January 2012.  

The most recent Australia New Zealand Leaders’ Meeting was held in Queenstown in February 2013, at which Prime Ministers Gillard and Key affirmed their strong commitment to the closest possible relations between Australia and New Zealand and agreed the following steps to mark the 30th Anniversary of the Australia New Zealand Closer Economic Relations (CER) Trade Agreement in 2013.

The two Prime Ministers also

Defence Relations

Defence relations between Australia and New Zealand are close and longstanding. Formal expressions of our security partnership are found in the 1944 Canberra Pact and 1951 ANZUS Treaty. The ANZUS Treaty remains in effect between Australia and New Zealand, notwithstanding the United States' suspension of its ANZUS security obligations to New Zealand in August 1986 in response to New Zealand's anti-nuclear policy.

Australia's bilateral defence relationship with New Zealand is underpinned by the Closer Defence Relations Agreement (CDR). The 1991 (revised in 2003 and again in 2008) CDR provides a broad strategic framework for the bilateral defence relationship. A key objective of CDR is for both countries to work together effectively in combined and joint operations. A range of defence engagement activities supports the development of interoperability, particularly for operations in our region.

The Pacific-focused Ready Response Force (RRF), initiated in September 2009, was finalised in March 2011, with New Zealand Defence Force personnel stationed at the Deployable Joint Forces Headquarters in Brisbane.

At bilateral talks in January 2012, Defence Minister Stephen Smith and his New Zealand counterpart Jonathan Coleman agreed to the 2011 Review of the Australia-New Zealand Defence Relationship which facilitates closer consultation and engagement. The framework was implemented throughout 2012.

In November 2012, Defence Ministers agreed to new initiatives to enhance practical defence cooperation including cross-crewing of Navy vessels, New Zealand participation in TALISMAN SABRE 2013 with embedded observers, and increased dialogue on regional security issues through a 1.5 Track Security Dialogue.

Political Overview

Government

New Zealand is a parliamentary democracy in the Westminster tradition. Its executive arm of government is drawn from its legislature, which currently has 121 members. Government in New Zealand differs in several ways from the traditional Westminster model. With the abolition of the Legislative Council (Upper House) in 1951, the New Zealand Parliament became unicameral. The most profound change occurred in 1993, when a referendum, held in conjunction with the general election, supported a change in the electoral system from First Past the Post (FPP) to Mixed Member Proportional (MMP), modelled on the German system. The first MMP election was held in 1996.

The Prime Minister (currently John Key, first elected in November 2008) is the Head of Government and must have the confidence of the House to govern. HM Queen Elizabeth II is the Head of State, represented by the Governor-General (Lt Gen Rt Hon Sir Jerry Mateparae, since August 2011).

Parliament is summoned, prorogued or dissolved by the Governor-General. The Government's term of office is three years. It is compulsory to enrol to vote but voting itself is not compulsory.

Under MMP, voters are given two votes – one for a local MP (an electorate vote) and one for a political party (a party list vote). Maori may choose to be on either the General or the Maori electoral roll. There are 121 seats in the current Parliament for the three year term following the November 2011 election. There are 70 electorate seats, including seven representing Maori electorates. An additional 51 party list seats are allocated to political parties in order to ensure that the total representation of those parties in Parliament reflects their percentage share of the party list vote.

With the introduction of this proportional electoral system, the opportunity for minor parties to gain parliamentary representation increased. As a result, coalition and minority governments have become commonplace. A referendum on the electoral system held alongside the general election (26 November 2011) returned a solid endorsement of 58 per cent of the MMP system.

New Zealand's National Party came close to winning an outright victory in the sixth election under the MMP system on 26 November 2011. The party won 59 seats and formed a minority government, after it negotiated confidence and supply arrangements with the ACT Party and United Future (which both won one seat each), guaranteeing a majority of 61 seats in a 121-seat Parliament. The National Party also secured a looser confidence and supply support arrangement with the Maori Party (three seats) which will allow flexibility pursuing National’s election platform (such as on partial privatisation of assets) while allowing the Maori Party freedom to vote as it wishes. Labour secured 34 seats, the Greens 14 seats, and New Zealand First returned to Parliament with 8 seats.

Murray McCully was reappointed as the Minister of Foreign Affairs. Tim Groser was reappointed Minister of Trade.

David Shearer was elected as Labour Opposition Leader after the November 2011 election, with Grant Robertson as Deputy Leader.  The next election is due to be held by late 2014.

Economic Overview

New Zealand is a small open economy. Following a comprehensive reform program that began in the mid-80s, the New Zealand economy is now largely deregulated, and more internationally competitive. The production base has diversified to include a range of elaborately transformed manufactures, while maintaining a large export-oriented agriculture sector. Services account for over two thirds of New Zealand's real Gross Domestic Product (GDP), while manufacturing accounts for 12 per cent. In 2011, New Zealand's main merchandise export markets were Australia (22.4 per cent), China (12.2 per cent), and the United States (8.5 per cent).  New Zealand’s main sources of merchandise imports were Australia (16 per cent), China (15.7 per cent), and the United States (10.7 per cent).

The New Zealand economy grew strongly between 1999 and 2004 (averaging around 4.0 per cent) but started to slow from 2005. New Zealand went into recession in mid-2008, which was prolonged by the onset of the global economic crisis. Since 2009, the New Zealand economy has been in gradual recovery.  GDP growth of 2.2 per cent is forecast for 2012.

Christchurch Earthquake

A magnitude 6.3 earthquake occurred 10km south-east of Christchurch on 22 February 2011. This followed a 7.1 magnitude earthquake in the region on 4 September 2010. The earthquake on 22 February 2011 killed 185 people and injured hundreds more, making it New Zealand’s third worst natural disaster.

NZ Treasury estimated the overall cost of the earthquakes at NZ$15 billion (eight per cent of GDP), with direct costs to the Government of around NZ$8.8 billion. Total costs are now estimated to be as high as NZ$30 billion. Around 80% of the bill is expected to be paid by the insurance industry. The New Zealand Government established a Canterbury Earthquake Recovery Fund appropriation of NZ$5.5 billion over six years to cover infrastructure, policy and emergency response costs.

Australian response in February 2011

The Australian Government donated A$5 million to the New Zealand Red Cross earthquake appeal. The WA Premier also donated A$500,000 to the New Zealand relief fund.  In addition Australia provided over 750 personnel, including 500 police officers [from NSW, Qld, Vic, WA, SA, Tas, NT and AFP], including general police and 50 experts assisting in the identification of bodies;  220 search and rescue personnel; a 24-person Australian medical team of emergency doctors, nurses, surgeons, anaesthetists and support staff, 12 ambulance peer support personnel; two temporary accommodation experts and a 75 bed medical field hospital with twelve support staff.

Bilateral economic and trade relationship

The economic and trade relationship between Australia and New Zealand is shaped by the Australia New Zealand Closer Economic Relations Trade Agreement (CER or ANZCERTA), which came into effect on 1 January 1983. ANZCERTA created one of the world's most open and successful free trade agreements and two-way trans-Tasman merchandise trade has increased at an average annual rate of around 8 per cent following its adoption. Based on trade in goods and services during 2011, New Zealand is now Australia's seventh largest trading partner, In  2011 New Zealand was the eighth largest source of foreign investment and third most important  destination for Australian investment abroad. Australia is New Zealand's principal trading partner (ranked number one for both exports and imports), largest source of foreign direct investment and largest destination for outbound investment.

In 2011-12, trans-Tasman goods and services trade was valued at around $21.7 billion. Key Australian merchandise exports to New Zealand (total value of $7.6 billion) included: computer parts and accessories ($331 million); medicaments (incl. veterinary) ($296 million); passenger motor vehicles ($244 million), edible products and preparations ($204 million)).

Merchandise imports from New Zealand in 2011-12 (total value of $7.5 billion) included: crude petroleum ($1,567 million); gold ($543 million); alcoholic beverages ($367 million); edible products and preparations ($268 million)). Two-way trade in services amounted to $6.5 billion in 2011-12.

In 2011 Australia's total investment in New Zealand was A$74.2 billion; while New Zealand's total investment in Australia was A$29.7 billion. New Zealand is the third largest market for Australian investment abroad, with Australia the largest investor in New Zealand. Over half of Australia's total investment in New Zealand is FDI (A$40.1 billion), reflecting the high level of economic integration. Australian investment in New Zealand includes the banking, insurance, building, infrastructure, telecoms, energy and retail sectors.

Single Economic Market (SEM)

The last major Review of ANZCERTA (1995) focused on advancing "third generation" trade facilitation issues including eliminating remaining regulatory impediments to trade. The Australian and New Zealand Governments decided to take a Single Economic Market (SEM) approach to harmonise the two economies to enable business, consumers and investors to conduct operations across the Tasman in a seamless regulatory environment.

An across-portfolio approach (including with State Government treasuries) has been adopted to establish mechanisms to deal with differences in business and financial regulation that might impede trade and investment. The approach is led by the Australian Treasury and the NZ Ministry of Economic Development. The key focus is on reducing transaction costs, lessening compliance costs and uncertainty, and increasing competition. In this context, the need to comply with international standards and evolving international regulatory standards and regimes is recognised.

Work on the SEM continues across a broad range of areas, including accounting standards, insolvency procedures, financial statements, anti-money laundering, anti-competitive conduct and consumer law.

During their meeting in Canberra on 20 August 2009, the Australian and New Zealand Prime Ministers committed to a Single Economic Market Outcomes Framework setting out principles to accelerate regulatory harmonisation and alignment in order to stimulate business and create jobs.

The principles of the framework include:

A Trans-Tasman Outcome implementation Group meets each quarter to oversee and report on work to accelerate regulatory and business law harmonisation under the SEM.

TTMRA

The Trans-Tasman Mutual Recognition Arrangement (TTMRA) for Goods and Occupations came into effect in 1998 and substantially reduced regulatory impediments to trans-Tasman trade. The two basic principles of the TTMRA are that:

Updated March 2013