Australian Prime Minister Julia Gillard says there is no reason for New Zealand to worry that Australia will dominate as the bigger country in a stronger economic relationship.
Ms Gillard has made a two-day visit to New Zealand where she was the first foreign leader to address MPs at Parliament in an unofficial sitting on Wednesday morning.
In her speech in the Debating Chamber, she paid tribute to New Zealand soldier Private Kirifi Mila who died in Afghanistan after his vehicle crashed on Tuesday.[image:1262:half:right]
Ms Gillard signed a protocol to free up trans-Tasman investment and bring New Zealand and Australia closer to a single economic market.
The protocol allows Australians to invest up to $477 million in New Zealand without facing screening, while New Zealanders will be able to invest about $1 billion in Australia.
The agreement lifts thresholds in foreign investment before regulatory approval is required.
New Zealand's Prime Minister believes the deal will be good for investors.
John Key said New Zealanders have $36 billion invested in Australia and funds such as the New Zealand Super fund and other businesses will be able to take advantage of the change.
Mr Key said significant Australian investments in New Zealand have made the economy stronger.
In a wide-ranging interview on Radio New Zealand's Morning Report programme, Ms Gillard said both countries will benefit from more closely aligned regulatory structures and the cost savings that will follow.
She said the nations are so closely tied that the stronger each one is, the better it is for the other.
PM hopes for easier trans-Tasman travel
Ms Gillard said there will always be a large exchange of people between New Zealand and Australia and hoped to make trans-Tasman travel easier.
Some moves have already been made to reduce waiting times at the border, such as the Smartgate technology.
Ms Gillard conceded that New Zealand Prime Minister John Key may have more muted enthusiasm for borderless travel but said there is common ground.
She told Morning Report she has no plans for a common currency because many other things are needed to bring the two countries' economies closer together before such a proposition is put on the agenda.
Ms Gillard said New Zealand has a strong sense of itself and its own future and a lot of self-confidence, which is warranted. She described her visit as the next step in a 30-year vision to strengthen ties between the two countries.
Ms Gillard later attended a state luncheon at Parliament and met with volunteers who assisted with the Queensland floods.
At wreath-laying ceremony at the National War Memorial, Ms Gillard and Mr Key laid two red roses side by side on the Tomb of the Unknown Warrior.
Ms Gillard returned to Canberra on Wednesday night.