Peter Costello

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Solid Progress in Costello-Cullen Bilateral


Hon Peter Costello Treasurer
Hon Dr Michael Cullen New Zealand Minister for Finance


Solid progress toward the Single Economic Market agenda embraced last year by Australia and New Zealand was achieved today at the annual bilateral meeting of Australian Treasurer Peter Costello and New Zealand Finance Minister Michael Cullen.

Specific decisions include a commitment to establish a Joint Trans-Tasman Council on Banking Supervision and endorsement of the work programme laid out in the Australian Productivity Commission’s report to achieve closer co-ordination between the Australian Consumer and Competition Commission and the New Zealand Commerce Commission.

Ministers also decided to investigate the possibility of adding an investment component to the Closer Economic Relations agreement.

“The Australian and New Zealand banking markets are among the most highly integrated in the world. Given this high degree of commercial integration, there is benefit in moving toward seamless regulation in this area in order to minimise regulatory hurdles,” the Ministers said.

“We are determined to maintain momentum towards this goal while seeking to improve the quality and reduce the cost of regulation in both countries.

“We agreed the Joint Council, comprising the two Treasuries, the Australian Prudential Regulation Authority and the Reserve Bank of New Zealand, should work toward achieving this objective.

“We also undertook to explore what legislative changes may be necessary to ensure APRA and the RBNZ can support each other in the performance of their current regulatory responsibilities at least regulatory cost.”

The Australian Productivity Commission recommended a work programme to more closely integrate Australia’s and New Zealand’s competition and consumer frameworks.

“We have broadly endorsed the Commission’s recommendations but see them very much as first steps toward the greater goal of establishing a joint regime rather than as ends in themselves.

“Generally, we see a two-step process: harmonisation leading over time to joint supervision.

“The treaty establishing a mutual recognition regime for securities offerings so that issuers can use a single disclosure document in both countries is likely to be finalised within the next two to three months.

“The Trans-Tasman Accounting Standards Advisory Group set up at last year’s bilateral in Melbourne has also made substantial progress toward standards alignment.”

Australia adopted international accounting standards at the start of the year, New Zealand is poised for full adoption in 2007 and the establishment of a permanent trans-Tasman accounting standards institution is on the radar as a long term goal.

“We are now broadening the focus with a regional forum to be held later this year and repeated regularly to achieve greater co-ordination of standards across the region. A co-ordinated approach will give us more opportunity to influence the debate on international standards,” the Ministers said.

Ministers confirmed the decision at the CER Ministerial Forum last year to extend Australia’s wine equalisation tax rebate to New Zealand wine producers for their sales in Australia.

Inevitably there will be some complexity in how this can be achieved but Ministers noted that officials on both sides of the Tasman are already working on developing a workable solution.

17 February 2005
Contact: David Alexander
0418 210 601

Attached: Terms of reference for the Joint Trans-Tasman Council on Banking Supervision.



The Ministers have agreed to establish a Trans-Tasman Council on Banking Supervision as the next major step towards the development of a single economic market in banking services. The Council will promote a joint approach to trans-Tasman banking supervision that delivers a seamless regulatory environment.

In particular, the Council will:

  • enhance cooperation on the supervision of trans-Tasman banks and information sharing between respective supervisors;
  • promote and review regularly trans-Tasman crisis response preparedness relating to events that involve banks that are common to both countries;
  • guide the development of policy advice to both governments, underpinned by the principles of policy harmonisation, mutual recognition and trans-Tasman coordination;
  • in the first instance, the Council will report to Ministers by 31 May 2005 on legislative changes that may be required to ensure APRA and the RBNZ can support each other in the performance of their current regulatory responsibilities at least regulatory cost.

The Council will be chaired jointly by the Secretaries to the Treasuries of Australia and New Zealand, and will also comprise senior officials from APRA, RBNZ and the RBA. The Council may establish working committees drawn from the respective agencies to help it in reaching views on particular matters, and may delegate aspects of the work to these committees where appropriate. Where any of the issues considered by the working committees have a direct interest for ASIC, the New Zealand Securities Commission or MED, or other agencies, these parties will be invited to participate.

The Council will meet with banking industry participants as necessary and will seek to facilitate the integration of the two markets to the greatest extent possible, while maintaining the safety, stability and efficiency of both financial systems, and protection of sovereign interests as determined by the respective governments.

The existence of the Council does not in any way derogate from the existing statutory rights and responsibilities of the respective authorities.

The Council will be responsible to the Australian Treasurer and the New Zealand Minister of Finance and report to them prior to their annual bilateral meetings.

17 Feb 2005

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