August 20th, 2009 at 09:44am
It will never happen, it’s a silly suggestion, so why does it keep coming up?
A shared currency between Australia and New Zealand has merit but is unlikely to eventuate, NZ Prime Minister John Key says.
Speaking to a business luncheon in Melbourne, Mr Key said adopting the Australian dollar would mean NZ forfeiting control of its monetary policy.
“The reason I don’t think it would happen is not actually because of parochial, political reasons.
“I think it’s because then again you have to abandon, from New Zealand’s perspective, control of monetary policy.”
Mr Key said NZ needed to retain its fiscal independence in case of an economic catastrophe, such as an outbreak of foot and mouth disease.
Only then could there be an enormous correction in currency to try to offset “economic carnage”, he said.
Sovereign nations with their own economies, customs and laws should have separate currencies, unless they feel like giving away more than just control of their currency to some central bureaucracy like the European Union.