But whether currency union with Australia, or the simple adoption of the Australian dollar by New Zealand, the outcome would in substance be very similar. With the exception of who gets the seigniorage income, on which I will comment in a moment, both options would involve New Zealand’s relinquishing any effective control over monetary policy in New Zealand.
In the case of the United States dollar, currency union is not even being raised as a possible option. The only possibility in that case would involve New Zealand’s adopting the United States dollar. And that too, of course, would mean relinquishing any control over our own monetary policy.