Support For Monetary Union Grows In New Zealand

ByEdwin Whenmouth A majority of New Zealanders support the idea of replacing their currency and the Australian dollar with a common currency, according to a survey conducted by Colmar Brunton Research for Television New Zealand. The telephone poll found 51% of 1,000 randomly selected people in favor of a joint currency, and only 36% against. The remaining 13% were unsure. Both Australian and New Zealand currencies have sunk to record lows against the U.S. dollar this week, but the New Zealand dollar also has dropped significantly against the Australian dollar, arousing fears that it is doomed to chronic instability by the small scale of the local economy. A current account deficit running at 7.1% of gross domestic product for the year to March 2000 adds to its weakness. New Zealand Prime Minister Helen Clark said in New York recently that the idea of a joint currency should not be dismissed if it can be shown to be beneficial, but Australian Treasurer Peter Costello said his country will not change its currency. That leaves New Zealand with the option of struggling on with its own or adopting Australian currency on Australia's terms. The two countries already have an extensive free-trade arrangement and mutual recognition of standards and qualifications, and their stock exchanges are considering whether or not to merge. Bill Foster, managing director of the New Zealand Stock Exchange, said the two exchanges hope to reach a preliminary agreement by the end of the year.