The first-ever joint Cabinet meeting between senior New Zealand government ministers and their Australian counterparts has been held in Sydney.
Prime Minister John Key said the meeting on Friday was a great opportunity for a wider exchange of ideas between the governments and a chance for the 16 ministers to talk about how to strengthen the trans-Tasman relationship.
Mr Key says the countries agreed at the meeting they should align their climate change policies as closely as possible.
Mr Key wants emissions trading schemes in both countries to be aligned so that carbon credits can be traded across the Tasman.
Earlier, he told a business meeting in Melbourne it would make no sense for the two countries to adopt different policies at a time when their economies were being brought closer together.
Australia's Prime Minister Kevin Rudd described Friday's meeting as "an historic occasion".
Mr Key says the ministers intend to hold another joint Cabinet meeting in New Zealand next year.
NZ handling of recession defended
Mr Key says the fact Australia appears to be weathering the global recession well does not mean New Zealand adopted the wrong approach.
The Australian government put together a large spending package to cushion its economy from the worst effects of recession, while New Zealand has adopted what Mr Key calls a rolling maul of initiatives.
However, he says it does not mean one approach is better.
Mr Key says Australia went into the recession with lower debt levels than New Zealand, allowing it to spend up more if it wanted to.
He says in New Zealand's case going further into debt would have prompted a ratings downgrade which would have been bad for the economy.