From the '96 SAM agreement:
16 New Treaty
The two Governments will make every effort to conclude, by 30 June 1997, a new air services treaty reflecting these new arrangements to replace the 1961 Air Services Agreement.[/b]
and from the speech:
The administrative requirements for an open aviation market licence are simplified in comparison to the usual international air service licence.
This will be particularly the case for new entrants into New Zealand.
I expect these simplified arrangements, which will operate on this side of the Tasman, will assist in developing flexible, responsive trans-Tasman air services.
However, after finalising the regulatory regime on this side of the Tasman, Australian officials discovered that the same action was not so easy to carry out in Australia.
Nevertheless I look forward to seeing Australia follow a similar path in due course.
So what happened for after the '96 agreement?
The New Zealand government opened up their skies to Australian operators, however the Australian government failed to do the same for the New Zealanders - they were fianalizing the arrangements still in 2000. I don't know if they ever did finnish.
The "something that happened" to put the agreement on hold, was the joining of Australian Airlines to Qantas, and the subsequent sale of Qantas.
The government of the day didn't want to hurt the sale price by opening up the domestic market to more competition - so they backed off the open skies deal.