Australian Treasurer Wayne Swan and New Zealand Finance Minister Bill English today made significant progress towards a Single Economic Market at their annual bilateral meetings held in Brisbane.
The Ministers discussed the difficult global economic environment both nations are facing and noted that both Australia and New Zealand had taken decisive action to cushion their economies from the worst impacts of the global recession.
The Ministers also discussed the already close economic relationship and significantly progressed ongoing work to further strengthen ties.
The Ministers took a number of steps towards achieving the shared vision of a trans-Tasman Single Economic Market.
Today the Ministers signed a Memorandum of Understanding to establish a trans‑Tasman retirement savings portability scheme. This will enable Australians and New Zealanders to transfer their retirement savings across the Tasman when they move. This will make it easier for people to move freely between the two countries and help to return people's 'lost' retirement savings.
The bilateral economic relationship was further enhanced by the finalisation of the new Australia-New Zealand tax treaty. These changes will be of benefit to both economies and the treaty is an important further step towards an integrated trans‑Tasman economy.
In addition, the Ministers discussed the work being done toward developing an 'outcomes' based approach to accelerate regulatory harmonisation to stimulate business and create jobs. The approach will be further developed for consideration by Prime Ministers in August.
The Ministers discussed Australia's membership of the G-20 and noted that it is an important opportunity for both countries to influence the global response to the crisis.
Mr Swan and Mr English also discussed progress towards meeting their Prime Ministers' commitment to conclude an Investment Protocol by the end of 2009 to promote trans-Tasman investment flows.
New Zealand is also currently investigating the merits of establishing a Productivity Commission and in doing so has looked closely at the model provided by the Australian Productivity Commission.
Both parties agreed that if New Zealand establishes a Commission then there should be trans-Tasman cooperation between the two bodies.
This will facilitate the sharing of experiences on what policies work best to improve productivity and competitiveness, and also permit joint studies on opportunities to strengthen the Single Economic Market.
16 July 2009
Background 0n Retirement Savings Portability
The Trans-Tasman Retirement Savings Portability Scheme Memorandum of Understanding would permit transfers of retirement savings between certain Australian superannuation funds and New Zealand KiwiSaver funds.
Participation in the scheme will be voluntary for eligible funds, as well as for individuals wishing to transfer their retirement savings.
The scheme is consistent with the objective of the two countries of creating a single trans-Tasman economic market, as is enshrined in the Australia‑New Zealand Closer Economic Relations Trade Agreement.
Once enacted it will enhance the movement of labour between the two countries by enabling individuals to streamline and consolidate their retirement savings in their country of residence.
In addition, by reducing individuals' exposure to multiple sets of fees and charges, the scheme is expected to support the growth of individuals' retirement incomes.
It will also help reduce the number of small, uneconomic accounts in the Australian superannuation system, which is consistent with the Rudd Government's focus on enhancing efficiency in the system.
New Zealanders who have returned home after working in Australia but have since lost track of their retirement savings accumulated in Australia should use the Australian Taxation Office website to check for any lost accounts: www.ato.gov.au/superseeker.
The approach taken in the memorandum will ensure that the integrity of the Australian and New Zealand retirement savings systems is maintained.
The two countries will now work towards enacting the legislation necessary to give effect to this new regime.