John Allen

Wellington, Sept 6 NZPA - New Zealand should continue to think about having a common currency with Australia even though the Government has ruled it out, says Secretary of Foreign Affairs and Trade John Allen.

"When you talk to exporters, one of the primary concerns that they have is the volatility of our currency," he said today on TV One's Q&A programme.

"It's one of the primary barriers that they face in actually entering the export market but that's been ruled out by Mr (Prime Minister John) Key in his recent speeches."

Mr Allen said he thought New Zealand needed to continue to "be thoughtful" about having a small currency exposed to significant volatility.

After visiting Australia last month and holding a joint trans-Tasman cabinet meeting, Mr Key said a common currency was a "mildly sensible" idea but it had not been on the agenda.

He said it would make it easier for New Zealand businesses exporting to Australia and remove risks around currency movements.

Mr Key said the biggest problem would be the loss of control over monetary policy, which meant New Zealand's economic performance and needs would not be reflected in interest rates and the value of the dollar.

"I think there are benefits and pros and cons, but do I think it will happen? The honest answer is no," Mr Key said.

During today's interview on Q&A, Mr Allen said a strong focus on trade was needed for New Zealand to make its way in the world.

"You can't disassociate trade and diplomacy," he said.

"It's the long run diplomatic activity, for example with China over 20 years, that enabled us to be the first country in the world the land the FTA (free trade agreement)."

Mr Allan, who was chief executive of New Zealand Post before becoming in May this year the first outsider to be appointed to his present position, said exporters were a vital part of economic success.

"We've got to make heroes of our exporters and we've got to tell their stories," he said.