By Stephen Wright

WELLINGTON, New Zealand--Quarantine free travel between New Zealand and Australia is not "too far off," New Zealand's Deputy Prime Minister Grant Robertson said, in a possible economic boost for both countries.

A so-called travel bubble between the neighboring countries was first proposed nearly a year ago, but suffered repeated setbacks due to small Covid-19 outbreaks and differences in each government's health response to the pandemic.

Some Australian states have allowed periods of quarantine free travel from New Zealand, which still requires all arrivals to be isolated in government-approved hotels for two weeks.

"There's a few issues still to talk through, including what we do in the event there is an outbreak, how we manage people who aren't in their home country at that time," Mr. Robertson said in an interview Thursday with state broadcaster Radio New Zealand.

"I'm very optimistic we'll sort that out in reasonably short order, and we can move towards having a unilateral bubble alongside the Australian unilateral bubble," he said.

Australia and New Zealand largely contained the spread of Covid-19 through a combination of strict lockdowns to end any outbreaks and closure of their borders. The measures have had an economic and fiscal cost that is less severe than initially feared, but which will be a burden in the future as the constraints of higher government and household debt are felt.

New Zealand's tourism industry has been particularly hard hit by the border closure. An influx of Australian visitors would be a boost for thousands of small firms as well as large businesses such as Auckland International Ltd. and Air New Zealand Ltd.

Write to Stephen Wright at stephen.wright@wsj.com

(END) Dow Jones Newswires

03-17-21 1632ET