ANALYSIS: The second-class treatment of New Zealanders in Australia remains a “pebble in the shoe”. The insistence on deporting criminals continues to corrode. And China’s rise remains the major conundrum for the New Zealand-Australia relationship.

There will be plenty on the agenda for Prime Minister Jacinda Ardern and her Australian counterpart, Prime Minister Scott Morrison, when they meet on Sunday, their first face-to-face since the pandemic closed borders and committed leaders to Zoom calls.

For months, there’s been hot-running headlines about trans-Tasman tensions and talk of friendship frosting over. And the foreign policy poles are moving further apart. While Ardern carefully talks of “harder to reconcile” differences with China, Australian Defence Minister Peter Dutton has been warning of outright war on his country's shores.

Foreign policy analysts on both sides of the Tasman agree there’s a rift. And, they say, pressure on New Zealand to match Australia’s bellicose approach may increase.

“One of the first things we need is a trans-Tasman dialogue to flesh out the differences and find some middle ground,” said Dr Anna Powles​, a senior lecturer in security studies at Massey University.

Powles was in Canberra earlier this month, giving a series of lectures about trans-Tasman relations and New Zealand’s foreign policy.

She said Canberra’s distrust about New Zealand’s commitment to defence and security goes back to the split of the ANZUS alliance in the 1980s, and the current rift over China had been brewing for a few years.

“New Zealand’s low defence spending has long been a source of frustration across the Tasman. This has frustrated officials on both sides.”

Australia depended on multilateralism – the building of alliances between multiple countries to achieve goals – as much as New Zealand did, she said.

However, Australia had vulnerabilities. The bombing of Darwin by the Japanese in World War II provides a historical basis for the “more hawkish, aggressive” posturing.

The Australian defence minister, Dutton, appeared to be referring to this vulnerability when speaking to the Sydney Morning Herald earlier this month, when he said there were “many approaches to Australia from the north and the west and clearly from the east ... we need to make sure we are in a position to defend those waters”.

Powles said the war rhetoric was more about Dutton playing up to a domestic audience, though Australia was increasingly facing information and grey-zone warfare operations – described as “competitive interactions” below the threshold of an attack – that New Zealand was yet to experience.

In Wellington, there was concern about how it might navigate the “competing asks” between the demands from the likes of Australia and New Zealand’s own interests. And there was concern that New Zealand might be encouraged to take a course of action that it would be unable to exit.

“Wellington has long had to show it’s relevant and reliable to Canberra. There is some patient understanding that this is the trajectory Australia is currently on but deeper concerns that the current trajectory will become entrenched,” Powles said.

“How New Zealand navigates these competing asks will be one of the greatest challenges it faces.”

Victoria University professor David Capie​, the director of the Centre for Strategic Studies, said while New Zealand was fortunate to have its biggest neighbour as its best friend, there were areas of concerning and persistent differences.

A “pebble in the shoe” was the treatment of New Zealanders in Australia.

This issue was front of Ardern’s mind at the last face-to-face meeting with Morrison, before the worst of the pandemic struck. At that meeting she aired her frustration at Australia’s ongoing deportation of criminals with little attachment to New Zealand but a passport.

Alongside this, New Zealand’s view of China was “bleeding over into becoming a consistent source of friction”.

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"What's happened is less that New Zealand has moved closer to China, but actually Australia and a number of other traditional partners have actually moved away from China,” Capie said.

“Officials here have been quick to reassure Australians that there isn't any kind of fundamental gap between how New Zealand and Australia see the region and see China. The messaging from the prime minister [has been] along those same lines.”

He said Dutton’s appointment to the defence portfolio in Australia would be challenging for New Zealand.

"It's extremely likely that he's going to take a sharper line on Australia's defence in the region. And I think that's going to highlight some differences with New Zealand.

“We know in the past that one way that's played out, for example, is calling on New Zealand governments to spend more money on defence, to do more.

“That’ll be an interesting relationship to watch.”

In Canberra, Australian National University professor Dr Brendan Taylor​ said Australia had become progressively more hawkish, or aggressive in its foreign affairs, since as far back as the Kevin Rudd Government in 2009.

However, a turning point occurred early in 2020. Taylor said there was now a “much stronger emphasis on values ... seeing the world in terms of democracy versus authoritarian regimes”.

“That's probably why you're noticing a real drift away from the New Zealand position ... Australia has really shifted and is continuing to shift.”

This was partly due to the “key personalities” within the Morrison Government who hold strong ideological views, he said. The pragmatic, interests-based approach to foreign policy was giving way to these views.

There was a belief that China can be deterred, “particularly if Australia, and Japan, and the United States adopt a much more kind of robust and co-ordinated position”.

And this also explained Australia’s push to wrap economic issues into the Five Eyes intelligence sharing arrangement, an expansion of the grouping’s remit that New Zealand was uncomfortable with.

“Certainly within the bureaucracy and within politics over here, being soft on China and being soft on national security isn't really something that is to be seen as beneficial.”

At a domestic level, polling showed the Australian public had a worsening perception of China since the Covid-19 pandemic struck. Taylor said Morrison was “quite sensitive” to domestic politics.

"One of the things that's been interesting for me is just how quickly they've gone to this position. I remember as recently as a couple of years ago, it was very hard to convince anyone in the Australian government that there could be a prospect of a conflict in Asia.”

He did not think Australia’s approach towards China was serving its national interest, whereas New Zealand had dealt with issues in a much more subtle way.

An example was participation in China’s major Belt and Road initiative – a memorandum New Zealand signed has been on ice, but an agreement in Victoria was torn up by Australia’s Federal Government to some fanfare last month.

"My sense is that there hasn't been much difference in the substance of the New Zealand and Australian policies, with a few exceptions, but the styles have been very different.”

Taylor said New Zealand officials understood their Australian counterparts much better than the other way around. There was not a lot of expertise about New Zealand within universities and think tanks across the Tasman.

"My sense is the Australian Government has been struggling to understand the New Zealand Government's approach.”

New Zealand’s approach to China resembled that of some South East Asian nations, he said – Foreign Minister Nanaia Mahuta’s speech to the New Zealand China Council last month was comparable to speeches given by Singaporean Prime Minister Lee Hsien Loong​.

"The Australian Government could probably learn a bit from looking at speeches like that.”

Taylor said the rift between Australia and New Zealand likely wouldn’t make much of a difference to the broader stability of the region.

But the persisting issues – such as the deportations of criminals to New Zealand – could limit how willing New Zealand would be to co-operate on Pacific issues that arise, at a time when China was seeking to expand its influence.

Or, Taylor said, there could be a “circuit-breaker” in the near future.

Morrison needs to call an election in the coming year.