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NZ-Aussie economy merger talks top agenda Sue Allen & Dan Eaton / Dominion Post | January 29, 2007 But mutual recognition of tax paid on dividends through imputation credits will not be discussed when Finance Minister Michael Cullen and Australian treasurer Peter Costello meet, because Australia considers it would be too expensive. Dr Cullen said talks would focus on trans-Tasman tax issues, business law coordination, banking supervision, climate change and trade, and mutual recognition of qualifications. Dr Cullen told BusinessDay that Australia had always been reluctant to talk about imputation credits because of the flow-on to double taxation agreements with other countries. He was more positive about New Zealand's corporate double tax deal, which he expected to "talk serious turkey" on this year with Australia. Mark Weldon, chief executive of the stock market operator, NZX, said everyone in business would prefer investors to be treated equally in the two markets. New Zealand and Australia had had a free trade deal, the closer economic relations agreement, since 1983. What was now being worked on was deeper integration of the two economies. Moves to integrate the Australian and New Zealand economies, creating a market of 25 million people, had raised concerns that New Zealand businesses would struggle to compete. Fears were also often raised that New Zealand's national identity would be swallowed, making the country Australia's "seventh state" or forcing the use of a common currency. "We seem to have a worrying predisposition to leap to the hardest issues first, and for me that is things like a common dollar," said Business New Zealand chief executive Phil O'Reilly, who supported a single market. "For now, let's concentrate on issues that are much more critical for businesses, such as common stockmarket listing rules, accountancy standards and tax rules." The concept of a trans-Tasman single economic market was raised at a January 2004 meeting between Dr Cullen and Mr Costello.
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