NO.006

JOINT MEDIA STATEMENT

Hon Peter Costello Treasurer

Hon Dr Michael Cullen New Zealand Minister of Finance

Hon Lianne Dalziel Minister of Commerce

MINISTERS ANNOUNCE KEY ACHIEVEMENTS IN THE TRANS-TASMAN SINGLE ECONOMIC

MARKET AGENDA

At their annual bilateral meeting today, Australian Treasurer Peter Costello

and New Zealand Finance Minister Michael Cullen announced significant progress

on single economic market issues.

“We are pleased to announce a number of measures that will accelerate

moves to remove barriers between our two economies,” said the Ministers.

“We are also signalling our intention to continue driving efforts to streamline

the trans-Tasman business environment by agreeing to a comprehensive work programme

for 2006 and beyond.”

The Ministers today signed a treaty on Mutual Recognition of Securities Offerings

and a revised new Memorandum of Understanding on Business Law Coordination.

In addition, both Governments have committed to implement the recommendations

of the first report of the Joint Trans-Tasman Council on Banking Supervision

and to legislative amendments to facilitate information sharing between the

competition regulators in both countries.

All of these important developments should have significant benefits for trans-Tasman

business and those looking to enter the trans-Tasman market.

Over the past year, officials from Australia and New Zealand have also made

progress on issues relating to taxation, investment, rules of origin and competition

and consumer policy.

The bilateral meeting is a valuable opportunity for the Ministers to discuss

regional commitments and developments in the Asia-Pacific. Ministers exchanged

views and discussed their shared interests in a number of important forthcoming

international meetings, especially the G-20 and APEC, which Australia is hosting

in 2006 and 2007 respectively, and theForum Economic Ministers’ Meeting.

Banking supervision

The Australian Treasurer Peter Costello and the New Zealand Finance Minister

Dr Michael Cullen today announced that the Australian and New Zealand Governments

have agreed to legislate changes recommended by the Joint Trans–Tasman

Council on Banking Supervision.

The Council was established by the Ministers in February 2005, and was asked

to report on legislative changes that would ensure our banking supervisors,

the Australian Prudential Regulation Authority (APRA) and the Reserve Bank of

New Zealand (RBNZ), can support each other in the performance of their regulatory

responsibilities.

These changes will require the banking supervisors to support each other and

consider the impact of their actions on financial system stability in the other

country. APRA and the RBNZ will also be required to consult each other on these

matters.

The proposals reflect the high degree of commercial interdependence of the

Australian and New Zealand banking markets and will facilitate the development

of the single economic market objective. In addition, the regulators will be

able to afford the banks some more flexibility in how they structure their businesses

within the trans-Tasman markets, which is expected to bring compliance cost

reductions and efficiency benefits.

Ministers also agreed that the future work programme will include looking at

improved cooperation on crisis management, promoting seamless service provision

for customers, and sharing experiences on improving the quality of insurance

regulation.

Additional information

The proposed legislative changes comprise the following elements.

• General provisions that require each regulator to support the other in

  fulfilling the other’s statutory objectives and, where ever reasonably

  possible, to avoid actions that could have a detrimental effect on financial

  system stability in the other country.

• A specific reference to the definition of ‘detrimental actions’

  to actions that interfere with or prevent the provision of outsourced services

  to a related party in the other country.

• A requirement that, where reasonably practical, the regulators consult

  each other before exercising a power that is likely to be detrimental to financial

  stability in the other’s country.

• A requirement that an administrator or statutory manager advise the regulator

  if they have reasonable cause to believe that the proposed exercise of a function

  or power by them is likely to have a detrimental effect on financial stability

  in the other country.

Treaty on the Mutual Recognition of Securities Offerings

The Ministers today signed a Treaty in relation to Mutual Recognition of Securities

Offerings. It will form the underpinning for a scheme which will allow an offer

of securities to be made in both countries in the same manner and with the same

offer documents (subject to some minimal additional requirements). It will reduce

red-tape for business and allow for increased trans-Tasman investment and choice

for investors.

Memorandum of Understanding on Business Law

The Ministers today signed a revised Memorandum of Understanding (MOU) on Business

Law, in accordance with the commitment to review the MOU every five years. The

MOU provides the framework for the coordination of business law between Australia

and New Zealand.

The MOU proposes an extensive work programme to increase trans-Tasman coordination

in business regulation. The consultation process that was undertaken as part

of this review confirms overwhelming community and business support for its

objectives.

Trans-Tasman Accounting Standards Advisory Group

The Trans-Tasman Accounting Standards Advisory Group (TASAG) has organised

cross-appointments and a protocol of cooperation between our financial reporting

and accounting standards setting agencies.

In addition, the TASAG hosted a very successful regional forum on International

Financial Reporting Standards attended by officials from 11 countries in the

Asia-Oceania region. This forum plays an important role in promoting regional

cooperation and communication on developments and issues facing economies in

this region.

Competition and consumer policy

The Australian and New Zealand Governments have agreed to amend the Trade Practices

Act and Commerce Act respectively to allow the Australian Competition and Consumer

Commission (ACCC) and the New Zealand Competition Commission (NZCC) to exchange

information gathered in the course of investigating competition and consumer

protection matters under the agencies’ powers regarding competition and

consumer protection matters.

The ACCC and the NZCC have proposed formal annual meetings at commission level

to discuss the strategic relationship and issues of mutual interest in the competition,

consumer and regulatory areas. The agencies have also agreed to develop a protocol

to enhance their cooperation in respect of dealing with the approval of trans-Tasman

mergers. These developments are expected to benefit business and consumers on

both sides of the Tasman.

MELBOURNE

22 February 2006

Contacts:

Australia: David Alexander 02 6277 7340

New Zealand: Mike Jaspers 021 270 9013