WELLINGTON (Pacnews) — A common currency with Australia would mean New Zealand adopting the Australian dollar, says New Zealand’s Prime Minister Helen Clark.
That would mean one central bank which could drive New Zealand’s currency up and down for factors completely unrelated to the economy, Clark said.
“The convergence of trying to bring the two together could be quite rough on the smaller party,” she said.
A common currency is one of the issues being discussed at a political and business leadership forum in Sydney, and a poll released last night showed 49 percent of New Zealanders favored it.
In 2000, only 29 percent of New Zealanders backed a shared currency.
But Clark said an Anzac dollar has never been on offer and it has always been clear there will be one currency — the Australian dollar.
“If you put that question to Kiwis, I don’t know what the answer would be,” she said.
Clark said Australia and New Zealand’s economic cycles are far from identical.
“We have different baskets of key commodities which tend to have a big influence on our currency. If Australia is undergoing a mineral boom because of high demand in China that really isn’t going to affect us very much because we don’t have the same minerals to export,” she said.
National Party leader John Key, who is attending the forum in Sydney, said a common currency is worth exploring further.
He said he will raise the issue at the two-day forum.
“It’s one of those things where I would have thought some solid work on it makes sense,” he said.
“But the political difficulties of it are not to be underestimated and I’m not suggesting it’s on the short-term agenda of either country.”
Finance Minister Michael Cullen, who is also attending the forum, said he was surprised Key was raising it.