Pavlova, Crowded House, 17 years of bragging rights in the Bledisloe Cup… Historically, New Zealand and Australia may have their differences on matters of provenance and sporting prowess. But when it comes to doing business, the two countries’ economic and trading relationship is recognised as one of the closest and most compatible in the world.
It's a closeness that's now also reflected in the world of commercial banking. And HSBC in particular - with teams on either side of the Tasman fully geared up to support companies looking to strengthen their business through the important Australia-New Zealand corridor.
To give an idea of just how important the Aus-NZ corridor is, in 2017 two-way trade amounted to NZ$24.64 billion; in 2019 that figure has risen to NZ$27.09 billion – a 9.9% increase in just 2 years1, and a trend that looks set to continue year on year – as indeed it has done for the last forty.
As a full service international bank in New Zealand, HSBC is perfectly poised to help Kiwi businesses capitalise both domestically and inbound from overseas. In the last two years the bank has significantly built upon its Trans-Tasman capabilities, as exemplified by its central technology platform, HSBCnet, that provides clients with a single consolidated interface to actively manage liquidity, trade and supply chain needs. In short, a seamless process for trade both ways.
“The barriers are well and truly down,” says Monique Dalton, HSBC NZ’s Head of Global Trade and Receivables Finance. “To us, Trans-Tasman feels more like a domestic corridor. We work closely with our team in Australia to offer bespoke solutions for our clients. And with transactions between the two countries treated almost as local, given the current climate we’re a no-brainer for businesses looking to keep their costs to a minimum.”
Much of the reason for this highly beneficial commercial relationship is the two countries’ Free Trade Agreement, known as CER (Closer Economic Relations), which first came into force in January 1983.
Under CER, all trade tariffs and quotas between the two countries were eliminated by 1990, and common rules for food standards introduced. Most services can be traded across the Tasman free of restriction, and goods that can be legally sold over here can also be legally sold over there, and vice versa.
In addition, New Zealand and Australia have committed to a process called the Single Economic Market (SEM), further designed to lower business costs, open up new opportunities to trade and create a seamless Trans-Tasman business environment.
CER has proved a resounding success. Since 1983, trade between New Zealand and Australia has increased steadily to NZ$27.09 billion as at March 2019, amounting to over 16% of New Zealand’s total trade1.
For NZ, this makes Australia the country’s second most important trading partner just behind China (NZ$30 billion), while New Zealand itself is Australia’s sixth most important – ahead of the UK. Last year, Australia also maintained its position as New Zealand’s number one services trading partner by a significant margin1.
The potential for Kiwi businesses looking to expand into Australia is clear. Australia’s economy has grown by 26% in the last 10 years2, and recently completed 28 years of continuous growth3 – no mean feat considering the global financial crisis.
What’s more, last year saw 12 out of 19 major industry sectors in Australia expand by at least 3%2, with technology, financial services and health care the leading lights. Add to this the International Monetary Fund’s prediction that the Aussie economy will continue to grow faster than that of any other G7 country (except the US) over the next two years, and you begin to see the bigger picture3.
HSBC is ideally placed to help companies realise their business ambitions in New Zealand, Australia and beyond. The bank’s huge global presence and in-country banking expertise provides a real competitive advantage for those with grander plans.
Customers also benefit from access to all the resources of the HSBC Group, through a trusted NZ-based Relationship Manager who provides in-depth, dedicated coverage across everything from funding and supply chain management to corporate investment and payroll solutions.
With many companies in New Zealand also operating in Australia – and vice versa – the business opportunities of teaming up with a renowned global banking partner are clear. And that’s one thing both Kiwis and Australians can agree upon.
Contact us now to find out how HSBC can help you do business better across the Tasman.
1 Stats NZ: statisticsnz.shinyapps.io/trade_dashboard/