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Businesses want common currency with Oz

Thursday 15th February 2007

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A clear majority of New Zealand businesses think the time has come - or is about to come - to have a common currency with Australia.
This opinion is one of the key findings from New Zealand-specific questions asked of local companies during the survey for the latest Grant Thornton International Business Report.
A smaller majority of New Zealand companies also thought the New Zealand Stock Exchange should be merged with the Australian Stock Exchange.
Sixty per cent responded positively to the question "Do you think the New Zealand Dollar and the Australian Dollar should be merged into a common currency?" with 38% against and the remainder unsure.
Among those who favoured a common currency, the biggest number (37.8%) considered this should happen by the year 2010. A further 23.3% thought the currencies should be merged even earlier, by 2008.
Another 14.4% felt the monetary marriage should occur by 2012, with 22.2% of the belief that it should happen after 2012. The remainder were unsure on timing.
"These are important findings that will give impetus to more commonality between the Australian and New Zealand business worlds," said Peter Sherwin, New Zealand spokesman on the survey for Grant Thornton, chartered accountants and business advisers.
"In various sectors there has been a drive to harmonise laws, regulations and standards affecting trans-Tasman commerce, as a long-delayed follow-on from CER (closer economic relations)," he said. "But probably the biggest underlying issue has been the matter of a common currency."
Sherwin said the topic had been something of bogey because many people considered it would foreshadow a move towards full union with Australia.
"Sovereignty is a totally different issue as those countries who have adopted the Euro as a common currency understand," he said. "France and Italy don't play in the same rugby team, nor have the same governments."
Sherwin said that a common currency could ease a lot of transactions and aid trade, benefiting New Zealand exporters in particular.
"Australia is our biggest export market and represents 19.95% or $6.1 billion of our total exports. To have a common currency will go some way towards leveling the playing field for exporters. They would not have the risk of currency fluctuations and would save the currency hedge cost. I am not surprised that a majority (54.7%) of the New Zealand business surveyed felt that New Zealand would benefit most from merging the currencies."
The survey also showed 31.3% thought Australia would benefit most, with the remaining opinions spread among those who thought each would equally benefit, or that neither would benefit, or were unsure as to which would benefit.
In another New Zealand-specific finding from the Grant Thornton survey, a majority of New Zealand businesses (55.3%) responded positively to the question, "Do you think the New Zealand Stock Exchange can survive with so many companies being bought by Australian and other offshore interests?" A further 26.7% said "no" with the remainder unsure.
Conversely, 51.3% said "yes" when asked the direct question, "Do you think the New Zealand Stock Exchange should be merged with the Australian Stock Exchange?" Another 36% said "no", with the remainder unsure.
"All of this information from the survey in total indicates that the majority of New Zealand companies are relatively at ease with the idea of more economic commonality with Australia," Sherwin said.
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