Idea for a joint Aussie-Kiwi dollar makes the rounds again

Chinese tourists Ren Yajing (L) and Wu Chong (R) support a giant Australian dollar display at the Royal Australian Mint in Canberra on October 21, 2011.

Canberra and Wellington are a long way from Brussels, and the lessons of the euro zone may have lost some oomph in transit.

The productivity commissions of Australia and New Zealand have again floated the idea of a single currency for Aussies and Kiwis.

The idea was mentioned in a discussion paper released Thursday examining ways to reduce the cost of doing business between the two countries.

The two commissions had been "asked to provide advice to the Australian and New Zealand governments on the opportunities, costs and benefits of further economic integration," their report said.

The New Zealand and Australian economies are somewhat mismatched, with Australia counted as New Zealand's biggest trading partner in recent years while New Zealand represents only Australia's fifth biggest trading partner.

One comparison offered on morning new reports was that the Kiwi economy roughly matched that of Sydney, Australia's largest city. 

No surprise then, perhaps, that the New Zealand government is up-beat about new avenues for economic cooperation.

New Zealand Productivity Commission Chairman, Murray Sherwin told TVNZ that Auckland was having "another kick" at the idea of a shared currency.

The report quoted Sherwin, as saying: "New Zealand and Australia are close neighbors that already benefit from significant economic integration. Our job is to advise on potential ways to further enhance that integration for the benefit of both countries. We have been asked to look at options for boosting productivity through reducing the regulatory burden on business, increasing competition and encouraging closer economic cooperation."

The report did make mention of the euro, pointing to Europe as an example of possible downsides of a shared Trans-Tasman currency.

"On the one hand, there are potential benefits in avoiding the transaction costs associated with having separate currencies," the paper said. "On the other, where business cycles and economic changes affect the two countries differently, there could be costs in not having independent exchange rates. The recent experience of countries in the euro zone is instructive in this respect."

Sign up for our daily newsletter

Sign up for The Top of the World, delivered to your inbox every weekday morning.