Key expects strong ties with Abbott

HAMISH RUTHERFORD AND TRACY WATKINS
Last updated 08:18 09/09/2013
Tony Abbott
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NEW LEADER: New Australian prime minister Tony Abbott with his wife Margaret (second left) and daughters (from left) Frances, Louise and Bridget.

Kim Dotcom
Prime Minister John Key.

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Australian Prime Minister-elect Tony Abbott is "warmly disposed" toward New Zealand, John Key says.

But Key has warned Kiwis living across the Tasman not to count on welfare reform any time soon.

While relations between the two countries tend to be most positive when the governments come from different parties, New Zealand's prime minister said having conservative governments on both sides of the Tasman - for the first time in 15 years - would have no major impact on the relationship.

"I'm not sure a lot will change. In reality, I find that leaders put their personal political views to one side and advocate for the best interests of their country," he said.

"I know Tony well. I've spoken to him on numerous occasions. We're sister parties so I think that can only help with a very strong relationship between New Zealand and Australia."

Abbott is married to a New Zealander, Margie, who grew up in Wainuiomata, which Key said made his counterpart "very fond of New Zealand".

But Key was not sure if this would lead to reform of laws which mean New Zealanders who live in Australia are entitled to little social welfare, even if they have been working and paying taxes for years.

"At one level any New Zealanders can go and work in Australia and that unfettered right to go and work in Australia and vice versa here in New Zealand is absolutely something you want to preserve," Key said.

"But back in early 2000s the then-Helen Clark government agreed with the John Howard government - of which Tony Abbott was a member of that government - to various changes, and those changes were about what your rights were if you didn't come in as  a resident or a permanent citizen.

"Are they going to change? Well maybe over time Australia might change because it might be in their interest actually to change some of those anomalies that are there."

But that would come at a big cost and like his own government, the Abbott government had inherited "quite a big fiscal hole".

"I just wouldn't hold my be breath there are going to be massive changes on day one."

Whatever Abbott's personal views, his desire to bring the Australian finances back into balance might take precedence, Key said.

"There's quite a big fiscal cost for the Australian government if they make changes, so while we'll continue to talk to them about it and advocate on their behalf, I know that Mr Abbott is very focused on getting Australia back into surplus, as we are on this side of the Tasman, so I don't think we'll be rushing to see changes there."

The pledge to bring the Australian Crown accounts back into surplus by the end of the first term in government was a "big goal" which Abbott relayed to Key during a phone conversation yesterday.

This could affect New Zealand if the economy of Australia, our largest trading partner, slowed on the back of reduced government spending.

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"They're our largest market on any measure, so if Australia was to slow at all then that has some impact on New Zealand," Key said. "Now the counter argument is they'll likely be a pretty business-friendly government. They'll likely want to encourage investment."

A new government "typically calms the markets, gives people confidence", Key said. "If anything, you may see the Australian economy bouncing back a bit."

Abbott and Key would meet as prime ministers for the first time at next month's Apec summit in Indonesia "at the latest", and it was possible Mr Key would visit sooner.

"It's a close relationship. It's our most important relationship. He feels very warmly disposed towards New Zealand so we'll see if we can make something work."

- Fairfax Media

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