Key tiptoes around Aussie rules

TRACY WATKINS
Last updated 05:00 08/02/2014

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OPINION: The Aussies have been gnashing their teeth of late about their Kiwi cousins.

The rise of the New Zealand economy and the possibility of the kiwi dollar reaching parity with its Australian counterpart has sparked the sort of angst that a loss to our cricketers would usually entail.

"Nothing else matters if we can't beat New Zealand," wailed one columnist in The Australian, noting that while Australia's economy sputtered, New Zealand was booming.

"Is there no end to their infernal one-upmanship?"

The size of the entourage that arrived with Prime Minister John Key in Sydney this week would make the readers who piled in with comments on that article even more skittish. In response to Australian Prime Minister Tony Abbott's election-night promise that Australia was open for business, Mr Key landed in Sydney with a super-sized delegation ready to do business.

The Air Force 757 that travelled over for the two-day flag-waving exercise was chokka with senior ministers, officials, media and some of the 50-odd business leaders who were also on the mission.

Pedestrians and traffic were backed up as Mr Key's motorcade and the travelling convoy of buses whizzed through central Sydney at rush hour.

Cap-in-hand mission? Hardly.

But cap-in-hand is how the relationship has come to be characterised in recent years.

The annual get-together - traditionally the two leaders take turnabout in each other's country - has turned into a yearly narrative about New Zealand's grievances against Australia, whether it is standover tactics by the Aussie supermarket giants, or Australia's refusal to extend citizenship-like entitlements to Kiwi expats.

This has obscured much of the productive work being done at a government-to-government level over a range of fronts, including business, security and justice, and given impetus each year by the annual leaders' meeting, which is where the real value in the gathering lies.

None of that has turned around the perception that New Zealand is the 90-pound weakling pushed around by its bigger and more powerful neighbour.

Labour sought to tap into that perception when leader David Cunliffe and former foreign minister Phil Goff got stuck into Mr Key for being too "deferential" to Australia on issues such as CER and the second class status of Kiwis across the Tasman.

Mr Key must have been fuming at Mr Cunliffe's chutzpah in wading in on the issue. Mr Cunliffe was a member of the Labour government that signed away New Zealand entitlements under duress from the Howard government. Labour's complicity in the Aussie welfare changes at the time has always been assumed to limit the potential to play politics with the issue.

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As Mr Key noted in Sydney yesterday, Helen Clark was no fool. She would not have agreed to the deal without believing the alternative was worse. And that was the Australian government pulling the rug out from under the long-standing agreement allowing unfettered travel between the two countries.

The Clark government was desperate at the time to paint it as a win-win deal.

BUT it has taken the passage of a few years for the true implications of the changes to sink in; they have been generational in their impact, affecting an increasing number of kids born to Kiwis and who grow up with an Australian accent and call Australia home.

The issue dominated last year's leaders' meeting between Mr Key and former Australian prime minister Julia Gillard. The two were best mates, and Ms Gillard was a passionate supporter of the Anzac relationship, but she was far too hard-headed to burn up what remained of her slender political capital by reversing the 2001 rule changes. She did, however, make a concession on student loan entitlements for the children of Kiwi expats who had been resident at least 10 years in Australia.

Mr Abbott, meanwhile, has been burning up plenty of political capital of his own. His government has embarked on an austerity and reform agenda marked by a determination to be miserly with taxpayer largesse. He has not been afraid to sacrifice sacred cows like the Australian car industry. Even the plight of the national flag carrier Qantas has so far left him unmoved.

Expecting him to be moved by the plight of non-voting Kiwis is a big ask, though he agreed this week to confirm the student loan deal, removing some of the uncertainty surrounding whether it had survived the change of government.

It is not hard to see the upside for Australia in those kids being better educated and productive members of society through extending access to student loans.

But there is also a political upside. Tweaking the system by making concessions in relation to the more unfair aspects of Australia's rules - such as refusing disabled care entitlements - will eventually knock the issue off the top of the agenda every time the leaders get together.

But just as no New Zealand politician ever lost votes by knocking the Aussies, the reverse is also true.

The Howard government was responding to an Australian backlash against the stereotypical "Bondi bludger" when it heavied the Clark government back in 2001. That explains why Mr Key and his ministers have been careful to tread carefully when pleading any case for change.

They have tiptoed just as carefully through the latest stoush over Australian supermarkets systematically stripping off their shelves Kiwi goods sold under their home brand labels. This has been brewing for more than a year but the Government has only now taken it up with the Australian Government.

The only representations previously appear to have been made on the cocktail circuit, or through a quiet word by Trade Minister Tim Groser over dinner.

There is an awareness, however, that the Aussie supermarket giants are responding to a groundswell of consumer demand within Australia to put its growers and jobs first. Mr Abbott gave the notion he would intervene short shrift at his press conference with Mr Key yesterday.

The extent to which CER can impose rules on how retailers match up supply with that consumer demand seems to be a grey area. Mr Key acknowledges there is a raft of differing legal opinions. Any attempt to cut across the customers' wishes could be doomed anyway, if Aussie consumers responded with a backlash against New Zealand goods.

Given our relative sizes, that may be one game of one-upmanship we would find it difficult to win.

- © Fairfax NZ News

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