Terms of reference
The Governments of Australia and New Zealand have asked the Productivity Commissions of both countries to undertake a joint scoping study on the Impacts and Benefits of Further Economic Integration of the Australian and New Zealand Economies.
Purpose of the study
The Governments of Australia and New Zealand are firmly committed to strong economic relations between Australia and New Zealand, including boosting productivity through reducing the regulatory burden on business, increasing competition and encouraging closer economic cooperation, and to strengthening those relations further. The two countries have a long history of working together through the Australia New Zealand Closer Economic Relations Trade Agreement which first came into effect on 1 January 1983 and has involved successive rounds of integration of the Australia and New Zealand economies. This has been highly beneficial to both countries.
With 2013 marking 30 years of the operation of the Closer Economic Relations Trade Agreement, the Commissions’ report will help advise the Australian and New Zealand Governments on next steps in economic integration.
The report should identify specific areas for further potential reform, the ways in which they might be best achieved, the likely impacts of potential reforms, any significant transition and adjustment costs that could be incurred and the time scale over which impacts are likely to accrue.
Scope of report
The Commissions’ report to leaders should provide analysis on:
- potential areas of further economic reform and integration, including identification of the areas of reform where benefits are likely to be most significant, with particular focus on critical issues for business like investment and productivity;
- the economic impacts and benefits of reform;
- any significant transition and adjustment costs that could be incurred;
- identification of reform where joint net benefits are highest;
- the means by which they might be best actioned; and
- the likely time paths over which benefits are expected to accrue.
The Commissions should provide an explanation of the methodology and assumptions used in its analysis. The Commissions should also provide guidance concerning the sensitivity of results to the assumptions used and bring to leaders’ attention any limitations or weaknesses in approaches to reform evaluation.
Consultation and timing
In the course of preparing the report, the Commissions should consult and hold public hearings as appropriate. While these consultations would inform the Commissions’ assessment, responsibility for the final report would rest with the two Productivity Commissions.
The Commissions should produce both a draft and a final report. The Commissions’ final report should be submitted to leaders, through the Treasurer of Australia and the Minister of Finance of New Zealand, by 1 December 2012. The reports will be published.