New Zealand country brief
New Zealand comprises two main narrow and mountainous islands, the North Island and the South Island, separated by Cook Strait, and a number of smaller outlying islands. Its total land area is approximately 263,310 square kilometres (about the combined area of Victoria and Tasmania). New Zealand claims a maritime exclusive economic zone (EEZ) of a little over four million square kilometres, the fifth‑largest in the world and more than 15 times its land mass. It has a cool temperate climate, strongly influenced by oceanic factors.
New Zealand reached a population of five million in March 2020, a figure likely to have been accelerated by an increased number of returns encouraged by the COVID‑19 pandemic. Since 2013, New Zealand's population has grown at an average rate of 1.8 per cent per annum, boosted by immigration. Until recently, most immigrants had arrived from the United Kingdom, Australia and northern Europe. A growing number of migrants now come from the Pacific island countries, particularly Samoa, the Cook Islands and Niue, and from Asia. Australia is a major destination for New Zealand migrants and tourists. New Zealand's capital, Wellington, is situated on the south-west tip of the North Island and is about the same latitude as Launceston.
Australia and New Zealand are natural allies with a strong trans-Tasman sense of family. Migration, trade and defence ties, keen competition on the sporting field, and strong people-to-people links have helped shape a close and co-operative relationship. Hundreds of thousands of Australians and New Zealanders cross the Tasman each year as tourists, for business purposes, or to visit family members. It is estimated that around 670,000 New Zealand citizens live in Australia (close to 15 per cent of New Zealand's population), while there are around 70,000 Australians in New Zealand. Freedom of travel is facilitated through the Trans-Tasman Travel Arrangements (TTTA) of 1973, which allow Australians and New Zealanders to visit, live and work in either country without restrictions. For more information on the TTTA, see New Zealand citizens. Information on access to benefits can be found at New Zealand citizens claiming payments in Australia.
While New Zealand chose not to join the Australian federation in 1901, it maintains close political contact. At a government-to-government level, Australia's relationship with New Zealand is the closest and most comprehensive of all our bilateral relationships. Prime ministers hold annual formal talks and foreign, trade and defence ministers meet regularly. New Zealand ministers and government officials often participated with their Australian federal and state counterparts in relevant meetings of the Council of Australian Governments, the structure of which will be revised following the creation of the National Federation Reform Council in June 2020. At the invitation of Prime Minister Morrison, New Zealand Prime Minister Ardern participated in the 5 May 2020 meeting of Australia's National Cabinet.
Australia and New Zealand cooperate closely in global and regional fora, including the United Nations, APEC, East Asia Summit and the ASEAN Regional Forum and Pacific Islands Forum. We both prioritise long-standing collaboration with our Pacific island partners through Australia's Pacific Step-up and New Zealand's Pacific Reset policies.
Australia and New Zealand have a proud history of joint deployments dating back to the Australian and New Zealand Army Corps at Gallipoli. Our defence relationship remains as important as ever, and includes recent operations in Timor-Leste, Solomon Islands, Iraq and Afghanistan.
Formal expressions of our security partnership are found in the 1944 Canberra Pact and 1951 ANZUS Treaty. Our bilateral defence relationship is underpinned by the 1991 Closer Defence Relations agreement (CDR), updated in 2018, which provides a broad strategic framework for the bilateral defence relationship. In accordance with the recommendations of the 2011 Review of the Australia-New Zealand Defence Relationship, a framework for closer consultation and engagement on defence has been implemented since 2012.
The 1983 Australia‑New Zealand Closer Economic Relations Trade Agreement (‘ANZCERTA' or ‘CER') is one of the world's most open and successful free‑trade agreements. The Australia, New Zealand and ASEAN free‑trade agreement, AANZFTA, entered into force on 1 January 2010. Both Australia and New Zealand cooperate closely in pursuing WTO goals, notably through participation in the Cairns Group, a coalition of 19 agriculture‑exporting countries promoting the liberalisation of trade in agriculture.
The Australia New Zealand Leadership Forum (ANZLF), established in 2004, is an annual private sector-led event which brings together Australian and New Zealand business and government leaders to reinforce and develop the trans-Tasman economy and business environment. The most recent ANZLF was held in Auckland in September 2019. The ANZLF, which is supported by DFAT (and its New Zealand counterpart, the Ministry of Foreign Affairs and Trade) is co-chaired on the Australian side by Ann Sherry AO, and on the New Zealand side by Greg Lowe.
Australian and New Zealand prime ministers hold an annual Leaders' Meeting, the most recent of which took place in Sydney on 28 February 2020. During that meeting, Prime Ministers Scott Morrison and Jacinda Ardern emphasised the strength of the bilateral relationship, the importance of collaborating as the COVID‑19 pandemic emerged, and Australia and New Zealand cooperation to support an open, inclusive and prosperous Indo‑Pacific region and to deepen partnerships with our Pacific family. They also highlighted a shared commitment to free and open global trade and emphasised the importance of the CER treaty and the trans‑Tasman Single Economic Market in driving prosperity in both countries.
Foreign ministers meet biannually for trans-Tasman Foreign Minister Consultations, the most recent of which were held by videolink on 17 December 2020 between Foreign Minister Marise Payne and New Zealand Foreign Minister Nanaia Mahuta. Trade ministers held their most recent round of annual trade talks on 5 February 2021 to discuss developments concerning CER as well as global and regional trade issues.
Defence Minister Reynolds held formal discussions on 9 May 2020 with her New Zealand Counterpart, Hon Ron Mark, agreeing to strengthen further defence cooperation in the context of COVID-19 across the Tasman and in our Pacific neighbourhood.
New Zealand is a parliamentary democracy in the Westminster tradition, but with several significant differences. Its executive arm of government is drawn from its legislature, which notionally has 120 members, although this may temporarily increase between elections to account for voting equities (‘overhang seats') under its Mixed Member Proportional (MMP) electoral system, introduced in 1997. With the abolition of its Legislative Council (upper house) in 1951, New Zealand's parliament became unicameral. The prime minister is head of government and requires the confidence of the House to govern.
New Zealand general elections are held every three years, most recently on 17 October 2020, following which PM Ardern’s Labour Party was returned with the numbers to govern in its own right, a first for any party since the establishment of the MMP system. Labour won 65 seats in the 120‑seat parliament, with the main opposition National Party winning 33 seats, down from 56. PM Ardern’s government does, however, include two Green Party ministers outside Cabinet as part of a cooperation agreement between Labour and the Greens (the latter having increased their parliamentary representation from eight seats to ten). Former Deputy Prime Minister and Foreign Minister Winston Peters’s New Zealand First Party failed to win any seats in the 2020 election, having held nine in the previous parliament. The ACT Party won ten seats (up from one) and the Maori Party returned to parliament with two MPs, having failed to win any seats at the 2017 polls. Within PM Ardern’s cabinet, Nanaia Mahuta replaced Winston Peters as Minister of Foreign Affairs and Damien O’Connor replaced David Parker as Minister for Trade and Export Growth.
Judith Collins, the opposition National Party’s fourth leader since the 2017 election, remained opposition leader after the 2020 polls.
HM Queen Elizabeth II is the Head of State, represented by the Governor-General (Rt Hon Dame Patsy Reddy), who may summon, prorogue or dissolve parliament. It is compulsory to enrol to vote but voting itself is not compulsory.
New Zealand has a Mixed Member Proportional (MMP) electoral system, based on a German model. Under MMP, voters are given two votes – one for a local MP (an electorate vote) and one for a political party (a party list vote). Maori voters may choose to be on either the General or Maori electoral roll. There are 120 seats in the current (52nd) Parliament, of which 71 are electorate seats, including seven representing Maori electorates, and 49 are party list seats. Party list seats are allocated to political parties in proportion to percentage shares of the party list vote.
With the introduction of MMP the opportunity for minor parties to gain parliamentary representation increased. As a result, coalition and minority governments have become commonplace. A referendum on the electoral system held at the 2011 general election returned a 58 per cent endorsement of the MMP system.
Following a comprehensive reform program that began in the mid-1980s, the New Zealand economy is now largely deregulated, and more internationally competitive. The production base has diversified to include a range of elaborately transformed manufactures, while maintaining a large agriculture sector, which accounts for over 60 per cent of exports but 7.5 per cent of real Gross Domestic Product (GDP). Services account for around 65 per cent of New Zealand's GDP, while manufacturing accounts for 11 per cent. In 2018, New Zealand's main merchandise export markets were China (24.2 per cent), Australia (15.9 per cent), the United States (9.6 per cent) and Japan (6.1 per cent). New Zealand's main sources of merchandise imports were China (19.8 per cent), Australia (11.5 per cent), the United States (10.1per cent) and Japan (6.1) per cent. New Zealand's GDP grew by 3.0 per cent in 2018 and is estimated to grow by 2.5 per cent in 2018.
Bilateral economic and trade relationship
The economic and trade relationship between Australia and New Zealand is shaped by the Australia New Zealand Closer Economic Relations Trade Agreement (CER or ANZCERTA), which came into effect on 1 January 1983. ANZCERTA is one of the world's most open and successful free trade agreements. Two-way trans-Tasman merchandise trade has increased at an average annual rate of around eight per cent following its adoption. For detailed information see Australia-New Zealand Closer Economic Relations Trade Agreement.
Reflecting the high level of economic integration in the trans‑Tasman "single economic market" (SEM) created by CER, two-way merchandise trade in 2018 totalled $17.6 billion (New Zealand was our ninth‑largest goods trading partner), while two-way services trade totalled $11.7 billion. In 2018, Australian investment in New Zealand was $96.7 billion (we are by far their biggest source of foreign investment), while New Zealand invested $47 billion in Australia in the same period.
Single Economic Market (SEM)
In August 2009, Australia and New Zealand committed to a process called the Single Economic Market (SEM) agenda, designed to create a seamless trans-Tasman business environment. The SEM agenda builds on the ANZCERTA by identifying innovative, low-cost actions to reduce discrimination and costs arising from different, conflicting or duplicate regulations or institutions in either country. The SEM agenda has already brought significant economic benefits to both countries by lowering business costs and increasing the ease with which both businesses and people can operate across the Tasman.
Australian and New Zealand ministers agreed at the 2016 Sydney SEM ministerial meeting to drive the SEM to promote mutual growth, competitiveness and prosperity.
During their meeting in Auckland on 22 February 2019, the Australian and New Zealand prime ministers highlighted the importance of the SEM in growing both economies by both facilitating trans‑Tasman business and remaining ambitious and responsive to new opportunities and challenges presented by the future of work, growth of the digital economy, data and emerging technologies.
Australian and New Zealand Ministers met in Auckland on 13 September 2019 to advance the Single Economic Market (SEM) agenda, building on the success of the Australia New Zealand Closer Economic Relations (CER) Trade Agreement. Ministers recognised the need to make sure the SEM agenda continues to meet the day-to-day needs of trans-Tasman business and remains ambitious and responsive to new opportunities and challenges such as the future of work, transitioning to a circular economy, and the growth of the digital economy, data and emerging technologies.