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John Key and Kevin Rudd - Source: ONE News -
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Prime Minister John Key says New Zealand and Australia and committed to coming up with practical solutions to the economic challenges both face.
Key has been in discussions with Australian prime minister Kevin Rudd in Sydney on Monday - the second time the pair has met since Key became prime minister.
The talks were due to be in New Zealand, but because of the Victorian bushfires they are being held in Australia.
The leaders have been engaged in discussions aimed at strengthening transtasman relationships on the global financial crisis, regional affairs and integrating the nations' markets.
With the recession at the top of the agenda, Key acknowledges the two countries have been cushioned slightly by geographic distance, but that he and Rudd are aware their respective economies are not immune from its affects.
"If the credit markets continue to implode, or world demand continues to fall, then that has a big impact on both of our economies," he says
"In Australia's case it drives down the price down of hard commodities, particularly out of China. In New Zealand's case we see it manifest itself in (lower) dairy prices."
Rudd says he and Key have spent a long time discussing and working through appropriate global policy responses to the global economic recession.
"This is a global recession which neither Australia or New Zealand caused, but it's a global recession whose impact washes over both our shores," he says.
"We, as governments, will remain in absolute close contact on appropriate actions."
Key believes New Zealand and Australian banks are in a good position at the moment but both prime ministers will discuss ways to better align transtasman regulations in terms of banking and business.
"Both New Zealand and Australia face significant issues in the global economic challenges, but the strength of our banking system, which is so closely inter-related between the two countries, gives us a head start," he says.
Key says there are several other areas where he hopes to make progress towards greater economic union with Australia, including easier transtrasman travel.
He says his informal meeting with Rudd on Sunday was a good opportunity to talk about ideas that might progress to real changes, such as the common border between New Zealand and Australia.
A common border would mean that flights between Australia and New Zealand would be treated like domestic flights, reducing immigration procedures between the two countries.
Key admits there are some challenges, including issues around borders and biosecurity, but they are not insurmountable.
"If it can happen in Europe, then surely it can happen in Australia and New Zealand," he says.
Key says both he and Rudd are keen to bring forward the projected date of 2015 for implementing the proposed plan but he does not know when that would be.
The leaders will also discuss climate change and there is a possibility they may look to align emissions trading schemes.
Australia says it will introduce carbon trading in July 2010 as part of its efforts to fight global warming and cut greenhouse gas emissions by at least 5% by 2020.
Key's government is yet to commit to an emissions trading scheme.
Key will meet with Australian business leaders before returning
home on Monday night.
