Is the ANZAC relationship dissolving into irrelevance?

Former Australian Ambassador to New Zealand Allan Hawke has returned from Wellington with an interesting message: the ANZAC relationship, forged on the beaches at Gallipoli and more or less taken for granted in the nine decades since, is in danger of dissolving into irrelevance.

It doesn’t mean we will stop playing the Kiwis at almost every sport under the sun, or that our young backpackers will no longer enjoy beers with them at watering holes around the globe. However, Hawke told a recent meeting of the Canberra branch of the Australian Institute of International Affairs, the countries are now set on two very different courses, and their cultures, once virtually indistinguishable to outsiders, are moving further apart.

Hawke has identified a trend which has been in progress for some time and may not be altogether negative. When I immigrated to New Zealand from Britain in 1972 I went through customs at Sydney Airport, the final leg into Christchurch being considered an “internal” flight.

In the New Zealand of the early ’70s most people of middle age still referred to Britain as “home”; Australia and the UK were the destinations for the vast majority of Kiwi exports; and New Zealanders had fought alongside Australians and Americans in Vietnam on the grounds “it was better to confront the communists there than on 90-mile beach [north of Auckland]”.

Things began to change during the 1980s as the Labour Government of David Lange set about dismantling the country’s cradle-to-grave social security system while implementing a foreign policy that was no longer in lockstep with its traditional allies. The big shake-up came in 1984 when Lange declared New Zealand a nuclear-free country and banned nuclear-powered or armed United States ships from its ports.

Since then Australia has worked hard at establishing itself in Asia while cementing its alliance with the US. New Zealand in contrast, seems ready to embrace a de facto isolationism, encouraged by a significant segment of the population who believe the country is better off as a peaceful environmentally sustainable backwater living as far apart from the overheating global economy as its essential trading links allow.

Today the anti-nuclear policy remains hugely popular. An attempt by the American Ambassador in Wellington to promote a review of US-NZ relations was ridiculed in the media and firmly rebuffed by Prime Minister Helen Clark who said she is quite happy to leave things as they are.

There is a paradox, noted by Hawke during his address, that while Australia and New Zealand diverge politically and culturally, economic links are binding them ever tighter. Both countries must trade to survive and their Closer Economic Relations (CER) agreement, now in its 21st year, has had undoubted benefits on both sides of the Tasman.

The countries are intertwined by a myriad of personal links, with 60,000 Australians living across the Tasman and almost half of New Zealand’s one million diaspora finding a home here. In a recent poll just 4 per cent of Australians had negative feelings about their neighbours.

Prime Ministers Howard and Clark have a closer relationship than has existed between their predecessors for most of the second half of the 20th century. Mr Howard held his 11th annual meeting with his Kiwi counterpart in February and has been to New Zealand eight times since 1996.

Even so, progressing the CER towards a Single Economic Market (SEM), first mooted by Treasurer Peter Costello and his Kiwi opposite number, Michael Cullen, in January 2004, is receiving little more than a lukewarm response in New Zealand. A significant sector of the business community there claims it is cover for a backdoor takeover by Australia, raising old but still potent concerns about loss of sovereignty.

This attitude is all the more puzzling given that similar opposition to the CER in the 1980s has been found to be completely misplaced. In the past decade growth in trans-Tasman trade has averaged 9 per cent a year: New Zealand is Australia’s fifth largest market, taking 7.4 per cent of our exports, and our eighth-largest importer. At the end of March 2005 Australia’s investment in New Zealand was NZ$59.4 billion, which represented a 24 per cent increase over the previous three years. New Zealand’s investment in Australia totaled NZ$25.5 billion, up from NZ$15.9 billion three years previously.