Why NZ’s desire for Australia will go unrequited
Wednesday, 4 February 2026
ANALYSIS: As changes to the world order prompt debate about whether New Zealand should become an Aussie state, the real question might be: what’s in it for Australia?
In an opinion piece on The Post David Farrar argued the shift from a rules-based order to a transactional/power-based order meant we would be better off as part of Australia. Political party leaders immediately poured cold water on the idea and feedback from readers was mixed.
In terms of security, sovereignty, and economics it makes sense for New Zealand, which would retain some self-governance and more influence in Canberra.
With just 5 million people, New Zealand has limited global leverage. Joining Australia creates a G20-sized mid-power with a huge maritime territory and natural resources.
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But Australia would get another state poorer in terms of GDP than its present poorest, Tasmania. And there’s the Treaty of Waitangi to consider, how would that fit into any merger?
Farrar says New Zealand holds a 125-year-old invitation to become a state of Australia, under The Commonwealth of Australia Constitution Act 1900.
Clause 6 defines the states as “the colonies of New South Wales, New Zealand, Queensland, Tasmania, Victoria, Western Australia, and South Australia”.
Historian Malcolm McKinnon says the key question is, would Australia now take us, even if we “applied”?
“On foreign policy, Australia would see New Zealand as more useful, especially in the Pacific, as an ally, rather than as a state.
“While Australia might hope for a bigger Defence budget with us contributing, that would be a minus for the New Zealand taxpayer.”
In 2023, Australia’s GDP per capita was roughly $US65,000 ($NZ108,000), while New Zealand’s was around $US48,000 ($NZ80,000) - lower than that of Tasmania.
Australia would end up effectively subsidising our infrastructure and social service needs.
Professor Al Gillespie, of the University of Waikato, says the shift in world order with the United States moving away from global entities it feels no longer serve it has changed his attitude.
Before, he had never been a serious proponent of joining Australia, because he likes New Zealand being independent.
“Since World War II there has largely been a rules-based order which has been very beneficial to small countries like New Zealand.
“It has allowed us to prosper, and develop strong economic and political relationships with competing powers such as the US and China.”
That order was about powerful countries agreeing to restrain their power, in the interests of global stability and security.
“The rules-based order is gone, and is not returning. We are in an era where countries with might will do what they see as right for them.”
Massey University politics professor Richard Shaw asks whether joining Australia is the right solution to the problem.
Whether we are New Zealand or the “State of East Australia”, the geopolitical squeeze between the US and China remains the same, he says.
New Zealand might achieve little more than losing its global independent voice.
“Our hands will be forced at some point whether we’re NZ or Australia. So, I’m not sure this move gives us protection or addresses the problem.”
And there is much we would have to give up, such as agency over defence policy, foreign policy, and all of the other jurisdictions that sit at federal level in Australia.
“That’s quite a lot to hand over. Most significantly, we give up our constitutional arrangements. And in particular, we would need to sacrifice Te Tiriti o Waitangi at the altar of federalism.”
Economist Michael Reddell says he would vote to join Australia, if a referendum was held. But his economic analysis is sobering.
New Zealand would likely become a branch office of Australia, and our best talent would move across the Tasman. Tasmania has seen the same effect, with its population falling.
We would no longer have our own central bank or currency instead the interest rate the Reserve Bank Australia set for the entire enlarged economy.
“It shouldn't be a major problem, once voters have decided they want to be part of a bigger Australia. We would probably gain through more banking competition because the various RBNZ requirements - outsourcing, local incorporation - would drop away.”
For Reddell the biggest implication would be no longer having an immigration policy. More Kiwis would move to Australia “but the biggest change is that we would not see many migrants coming here”.
They would target the riches of Sydney and Melbourne.
“This is consistent with what we already see in Australia: relatively modest numbers of migrants go to Tasmania; disproportionate numbers go to (especially) Sydney and Melbourne.”
Joining Australia would likely result in lower New Zealand population growth rates, over time lift productivity and GDP per capita.
“It is quite unlikely that we would succeed in fully closing the gap to Australia, but the difference would still be helpful to the New Zealanders who remained here.”
In 1901, Prime Minister Richard Seddon baulked at joining the Federation because he didn't want New Zealand to lose its destiny as “Godzone”. A century later, the tables have turned.
We might finally be ready to contemplate marrying into the Lucky Country family, but are we really a catch? Australia might take one look at our balance sheet, and say “hmmm, let’s just stay friends”.