The good and the great of Melbourne packed in to the town hall on Thursday evening to hear the New Zealand prime minister, Jacinda Ardern, speak on the topic of why good government matters.

Since the tragic Christchurch mosque massacre, Ardern has come to be seen not just as one of the world’s youngest leaders of a nation, but also as one of the world’s great leaders.

As Ardern’s oration displayed her mastery of her brief, more than one of the 2,000 people in the main hall was left wondering how Australia might fare under the prime ministership of Jacinda Ardern.

While this may be dismissed as a fantasy in 2019, it was not always thus. In fact, when Melbourne Town Hall first opened in 1870 the inclusion of New Zealand as part of the push to create a new nation of Australia was very much a live debate.

'I feel hopeful': New Zealanders cautiously welcome Wellbeing Budget Read more

Writing in the 1870s, the great Australian novelist and journalist Marcus Clarke wrote of the Australasian Empire as a continent cut in half by a line through the centre.

Above the line would be the colonies of Queensland, New Guinea and the Malaccas, while beneath the line was a nation made up of the southern colonies, including Victoria, New South Wales and New Zealand.

In Clarke’s idealised democratic southern republic, the intellectual capital would be in Victoria, the fashionable and luxurious capital on the shore of Sydney harbour, while the governing capital would be in New Zealand.

Obviously Clarke’s contribution to how Australasia should govern itself did not prevail when the constitutions of Australia and New Zealand were drafted in the 1890s.

And while his novel For the Term of His Natural Life remains the great Australian novel of the 19th century, Clarke’s contribution on the governing system of Australia and New Zealand has been long forgotten.

But sitting at the town hall on Thursday evening, I did wonder how things might be different if this radical idea had prevailed.

To begin with, Jacinda Ardern could be the prime minister of southern Australasia, leading the peoples of Victoria, NSW and New Zealand. Meanwhile, Scott Morrison could be the PM of Queensland and beyond.

The Observer view on Jacinda Ardern setting a global standard in leadership | Observer editorial Read more

If only it was that simple. The complex truth is that New Zealand has a long history of outstanding policy innovation and political leadership that transcends a single prime minister.

The recent conservative National party PM, John Key, provided exceptional leadership for New Zealand. For eight years he guided his country through the tribulations of the GFC and two major earthquakes while also implementing major tax policy reform and introducing an emissions trading scheme.

In the same period, Australia suffered from policy paralysis and the internecine party wars. Key once roasted Australia’s revolving door of prime minsters, recounting: “I used to say, ‘mate, I don’t really mind who turns up, just wear a name badge so I know who it is’.”

New Zealand has long been the social laboratory for progressive policy reform; it led the world into the 20th century with the introduction of female voting and the old-age pension.

In more recent times it seems that for every policy success achieved by New Zealand, Australia has suffered an equal and opposite failure.

The last major contested policy reform that has been maintained in Australia is the introduction of the GST in 2000, almost 20 years ago.

New Zealand, on the other hand, has lifted the GST twice as part of a major “tax switch” that slashed income tax rates, lifted superannuation and welfare payments, increased property tax but cut the company tax rate.

In 2008, NZ introduced a carbon price and emissions trading scheme. Like most schemes it has been subject to revision, but the critical architecture of the ETS remains in place. Meanwhile, Australia does not have a national energy policy.

On the social policy front, a New Zealand legalised same sex-marriage in 2013 while Australia was the last English-speaking country in the world to introduce marriage equality.

Not surprisingly, there is now a huge gap between how Australians and New Zealanders think about government.

The most recent Australian Election Study and New Zealand Election Study asked voters in the two countries whether voting “matters”, and whether it “makes any difference to what happens”. Of the Kiwi respondents, 81% of the Kiwi respondents who expressed a view said voting matters. The figure in the Australian survey was just 58%.

Australians who care about the quality of government and policy making need to study New Zealand closely.

The differences between the two countries’ governing systems suggest some major reform options for Australia.

Some differences appear to make it easier to get things done on the other side of the ditch: New Zealand has a unitary, rather than federal, system of government. The New Zealand parliament also does not have an upper house.

On the other hand, New Zealand has adopted a proportional representation voting system which makes it very hard for one party to win a majority in its own right and requires coalition-building and negotiations.

Beyond the mechanics of how laws are made, there are also differences in geography and culture that are perhaps even more important.

Australia has the complication of vast distances that create special pressures on government – this suggests the need for a federal system of government that defers considerable power to the local level. Instead Australia has ended up with a federal system that focuses a lot of power in the centre.

Finally, New Zealand is a plucky nation with a progressive political culture. While Australia has a similar political culture in some places, think Victoria or South Australia, this is kept in check by more conservative sates like Queensland.

Ultimately, Australia’s future wellbeing depends on its political system rediscovering its reform mojo. Hopefully we can learn a lesson or two from New Zealand.