In the wake of the cricket world cup final that saw Australia and New Zealand face off, and just weeks away from the centenary commemoration of Anzac Day, there’s a lot for Australia and New Zealand to share.
The two countries have always had a strong bond, that promptly turns into rivalry as soon as anything sport-related is brought up, but is it time to connect these two countries more intrinsically?
An article in the Sydney Morning Herald this week has opened up the age-old discussion about a joint currency – an Anzac currency between the two nations and today we want to know, what do you think?
In 2012 Australian and New Zealand Productivity Commissions and economic think tanks explored the topic but rejected it after reviewing the idea. Despite the fact that it did not continue, some interesting pros and cons came up for discussion.
Both countries have a lot in common. Similar political structures, similar values, they are both Anglo-Saxon Christian countries and are both in the Commonwealth. It takes about three hours to travel between the countries and the cross Tasman travel is huge. These are the reasons why it should be explored, but what are the benefits to each country?
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A single currency for the two countries would benefit the two-way business models, encouraging trade and investment across the countries. However, the New Zealand GDP was estimated to be around $231 billion in 2014 whereas the Australian GDP sat at $1.525 trillion. This has caused many people to believe that Australia will overtake New Zealand business and infiltrate the economy. After a country of New Zealand’s size has worked so hard to be a strong and independent economy, this idea hasn’t been well received.
However, as the Australian economy is typically stronger than the New Zealand economy with a higher dollar value (let’s pretend the Aussie dollar isn’t so low right now), it could boost New Zealand’s strength by the two countries trading off this.
The major concern is that for an integrated economy, both countries would really need more across the board consistency. Interest rates would need to be stabilised across the countries, which would give less flexibility in responding to economic conditions. Some economists went so far as to say that it would be unsuccessful until Australia and New Zealand combined politically.
There’s benefits and there’s negatives to the entire concept and regardless of what is economically easy, it comes down to the biggest question – what do the people want?
So today share your thoughts with us… What do you want to see happen? Would you like to see a joint currency between Australia and New Zealand? Share your thoughts on the issue in the comments below…