They may often be lumped together by the rest of the globe, but the Anglophone neighbours Australia and New Zealand love nothing better than beating each other in sport and celebrating their differences.

Yet, more than a century after the two countries went their separate ways, Australia is now taking steps to end the long “love-hate” relationship and is wooing New Zealand with a proposal for union.

The move, contained in a report released yesterday by the Australian Parliament’s Committee on Legal and Constitutional Affairs, recommended merging the two countries under common law, forging a common currency and even allowing New Zealand ministers membership of Australian ministerial councils.

“While Australia and New Zealand are, of course, two sovereign nations, it seems to the committee that the strong ties between the two countries — the economic, cultural, migration, defence, governmental and people-to-people linkages — suggest that an even closer relationship, including the possibility of union, is both desirable and realistic,” the report said.

However, Michael Cullen, the New Zealand Finance Minister, rejected the common currency idea: “The Australian Government has made it clear that if we wish to adopt their currency we can do so . . . We are not going to do that.”

Some of the 27 suggestions appear to be common sense, particularly between two nations with close cultural and commercial ties, whose soldiers have fought side by side from the shores of Gallipoli to the recent intervention in East Timor. Although New Zealand chose to become an independent nation, it was one of the seven colonies of Australasia until 1901. Canberra has never lost hope that its smaller neighbour might one day return to the fold. New Zealand is still referred to as one of the original states in the Australian constitution.

“In this era of globalisation, it makes sense for Australia and New Zealand to look at moving closer together,” Peter Slipper, the committee chairman, said.

While few would question the practical benefits of union, the two countries are divided by more than just 1,000 miles of Pacific Ocean. In foreign policy, Australia has aligned itself closely with America and has troops in Iraq as well as Afghanistan. New Zealand has a far more prickly relationship with the US, and a cynical view of the Australian “deputy sheriff” role in Asia.

There are also important cultural differences. Australians are commonly derided as brash and outspoken by New Zealanders. In turn, some Australians regard their New Zealand cousins as “South Sea Poms”, with an unhealthy attachment to the British monarchy.

Then there is sport. Not surprisingly, the Australian Parliament did not recommend pooling resources on the rugby pitch, a move that would produce a formidable team but would probably be tantamount to treason.

Overcoming these barriers will require great tact, as anyone who has ever mistaken a Kiwi for an Australian will tell you. Cherie Blair felt the full force of Kiwi national pride when she gave an after-dinner speech last year in Auckland and twice confused her host country with its larger neighbour.

The successes ... and failures

Yemen After 20 years of strained relations, Marxist South Yemen united with the northern Yemen Arab Republic in 1990

Tanzania Violent revolution overthrew the Sultanate of Zanzibar in 1964. The island country merged with newly independent Tanganyika

Germany With the fall of the Berlin wall, East and West Germany formally joined in 1990

Central African Federation A British protectorate between 1953 and 1963 comprising modern-day Zimbabwe, Zambia and Malawi. It broke up when Zimbabwe and Malawi, then Northern Rhodesia, gained independence from Britain

Czechoslovakia Formed after the First World War and survived Communist rule, but lasted only three years after the fall of the Soviet Union

Source: Times archive

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