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costs for businesses that traded with Australia and would be the next logical step in
closer economic relations with Australia. It would lift export performance and everyone
would benefit. Their survey showed that 58 per cent of businesses were strongly in
favour of a common currency, because it would eliminate uncertainty created by volatile
exchange rates. New Zealand, they said, is the smallest industrialised country in the
world to run an independent monetary policy.
By September of that year, Prime Minister Helen Clark said that she was not averse
to the discussion, adding that the New Zealand economy was ‘too small to register on
the radar screens of financial markets and investors’. 3 A One News Colmar Brunton poll
on 18 September 2000 found that 51 per cent of people were in favour of a common trans­
Tasman dollar. At the same time, the ACT Party was going so far as to propose adopting
the US dollar instead.
Since the decision to adopt an Anzac dollar would be hard to reverse, it is
important to think out the pros and cons first. The advantages of a supranational
currency have been mentioned already, but what about the disadvantages mentioned
above?
Arguments Against the Anzac Dollar
The main argument against adopting an Anzac dollar is the same given by euro sceptics:
in other words, that
a distant central bank would make decisions for New Zealand and monetary (and
therefore economic) sovereignty would be surrendered. New Zealand would effectively
hand over control of its inflation rate and interest rates to foreign bankers. So, for
example, if inflated house prices in Sydney caused the new Anzac central bank to
increase interest rates, this could make things worse for New Zealand if we were in a
recession. The Anzac dollar would lead to greater centralisation, where unelected
bankers would override the decisions of member countries.
Even with a small country like New Zealand, one national central bank (in our case
the Reserve Bank) cannot be all things to all regions. Different parts of a country require
different solutions, but this must be ignored in favour of an arbitrary average. When
Auckland house prices rose rapidly in the period 1992–97, the Governor of the Reserve
Bank stepped in and raised interest rates, infuriating people in Southland. Such a onesize­fits­all
approach is never found in natural systems. Centralisation like this didn’t
work for Communism in the USSR and it won‘t work for the euro in Europe. So instead
of either a national currency or a supranational one, what is actually needed is both, a
state of affairs that requires a new mind­set.
In actual fact, rather than having an Anzac dollar it seems more likely we will have
the Australian dollar imposed on us. Throughout the debate on the issue, the former
Governor of the Reserve Bank of New Zealand, Dr Don Brash, injected some realism. In
a speech to the CEOs of companies in New Zealand, when the results of a survey were