Australian Treasurer Peter Costello has called for a freeing up of investment rules with New Zealand as part of moving towards a single economic market.

Costello met with New Zealand Finance Minister Michael Cullen in the New Zealand capital and called for an ambitious agreement on investment rules between the neighbouring countries.

He said Australia now had more liberal investment rules with the United States as part of the free trade agreement between the two countries. The investment regime with New Zealand now lagged behind.

"We hope the outcome of this will be better rights for both countries," he told reporters after meeting Cullen.

"The US has better access to Australia than New Zealand, that shouldn't be the case."

Cullen was more cautious given New Zealand's smaller size, saying any changes would have to be approved by parliament.

While there were some costs for businesses wanting to invest in New Zealand, no business investment application had been turned down since 1984, he said.

No details of the investment liberalisation proposal were revealed by the two ministers but Cullen said New Zealand would respond by the end of the year.

New Zealand and Australia have had a Closer Economic Relations agreement since 1984, with tariffs and quotas being removed from trade in goods. They are also working on harmonising tax and business laws to move closer to a single market.

Australia is already the biggest foreign investor in New Zealand, accounting for about half of the total.