Aussie PM charmed by Queenstown

Australian Prime Minister Julia Gillard has labelled Queenstown a "happy town" on her inaugural visit to the resort this weekend as she and her New Zealand counterpart John Key have packed greeting hundreds of interested locals between meetings.

Ms Gillard arrived yesterday afternoon on an Australian Airforce plane and has since held the Cricket World Cup, placed a wreath at Queenstown's war memorial and fitted in a spot of shopping in Arrowtown.

Among discussions between the two prime ministers they were able to announce today that New Zealand will take 150 boat people a year who have been approved as refugees by Australian authorities in offshore processing.

The figure will be part of 750 refugees New Zealand takes a year as part of its commitment to the United Nations High Commission for Refugees.

This was not pleasing to one Queenstown local, who went by the name of Fay and stood in protest when both prime ministers arrived by the war memorial shortly after.

The protester held up a sign calling on Australia to close its offshore processing centre in Nauru and said she did not agree with the government's deal with Australia.

The new arrangements start from next year and could include refugees processed through offshore centres in Nauru and Papua New Guinea.

Also announced this morning was the two government's new commitment to trans-Tasman telecommunications and lowers costs through action on roaming charges between the two countries.

Both would introduce legislation into parliament that would ensure regulators are able to investigate and take action to regulate prices.

Ms Gillard said this would benefit holiday makers and business workers alike from both countries.

"A million Australians come to New Zealand every year. They bring with them their mobile phones. Many of them are on holiday so they do the kinds of things that people do on holidays. They take a photo and try and send it back to people at home...ring up friends and family at home."

After the announcements this morning both prime ministers arrived in Queenstown at 2.30pm to lay a wreath by the Queenstown war Memorial to mark the near centenary of Gallipoli.

They were greeted by hundreds of Queenstowners and interested onlookers before heading back to the Hilton Hotel at Kelvin Heights where they posed for media with the ICC Cricket World Cup.

Asked whether Queenstown could host the CWC, Mr Key said it was a possibility and both government's would be discussing host towns in the near future.

He said Queenstown was a "beautiful location" and crowd capacity as well as host abilities would be worked through.

Ms Gillard echoed this.

"I'm sure it would be a beautiful location here, including for watching the cricket, so all of that's got to be worked out," she said.

Straight after the photo opportunity Mr Key, Mrs Gillard and a 6 car motorcade left for Arrowtown for a look in the quaint town's shops.

The pair visit almost every shop on Arrowtown's main Buckingham St and arrived at the Post Masters cafe for a briefing while over one hundred onlookers observed.

Ms Gillard will fly out tomorrow morning back to Australia.