The Muldoon-era Cabinet minister widely credited as the architect of closer economic relations between Australia and New Zealand is calling on both countries to bite the bullet on economic union.

Australian Prime Minister Julia Gillard will honour former trade and industry minister Hugh Templeton today with one of her country's highest honours at an Order of Australia investiture ceremony. It is a level of recognition that has eluded Mr Templeton on this side of the Tasman.

Ms Gillard yesterday put further expanding CER – a deal liberalising trade between New Zealand and Australia that came into effect in 1983 – at the top of her agenda in New Zealand. She said it was a "living agreement".

But Mr Templeton has revealed CER nearly did not happen and he was never sure if his leader at the time, Sir Robert Muldoon, would stop it in its tracks.

"We could have completed it and signed up in 1981 and it would have been a marvellous platform for our 1981 election when we only had Think Big. [But] we held off till 1982 and we nearly lost it because of the opposition of Australian farmers. I had to go over and spent a very fraught time explaining it to them."

Negotiations eventually spun out to four years and Sir Robert was the major reason.

"At one point in caucus he threatened to stop it and I was never sure whether he would carry through."

But despite opposition, both domestically and across the Tasman, there was never any doubt in his mind that CER had to happen.

"It was strategically the number one issue for New Zealand," Mr Templeton said.

"We had to get it. We had to do it ... we had to get this as the basis for broadening the basis of our economy and giving our manufacturing sector a decent market."

Without it, our fate would have been to become "a little New Zealand getting littler in the South Pacific". But the global financial crisis in 2008 had put the spotlight on the lack of progress since then.

"What happened is that Australia came through it pretty well and New Zealand is in deep schtuck ... if we had a full-scale economic union with a common currency etc with Australia we would be much better protected from the rather vulnerable position in which New Zealand is. It's as simple as that."

But a decade of economic good times had encouraged governments to put off hard decisions and fail to make the most of opportunities that CER presented. Both countries should have moved towards a common market in the 1990s and economic and currency union in the 2000s.

"We put off the hard stuff in the good times and now when times are bad let's hope it's not too late."

(Source The Press)