The idea of an Oceanic Union is a bit weird though. Unless Australia gets a massive population boost, the area is just too poor economically to be considered a mega nation. And since that population will probably come from Chinese ex-pats and disaster immigrants from drowned island nations, it changes things even more-so.
There is a fair bit of the "semi-protectorate" status going on throughout the area though.
I guess you could do it as a low-pop/high-tech, very resource rich area (which it essentially is these days), perhaps with technology having spread more thoroughly to the island nations, as well as nuclear power having finally been deployed wholesale. Or just a have/have-nots, with drowned countries and immigration providing some conflict in the area. Maybe a mixture of high-tek communities with nuclear wastelands from a few oopsies or something.
For defense purposes, it's never really been Aus or NZ's playground anyway. A union of sorts, but of two minnows in a sea full of big fish.
What sort of technology will be in the game? Super advanced/revolutionary, or just a slow plodding along the curve from what we have now? Did climate change effect much (especially the pacific island nations)?
I'd look at the OU more as a mini-mega-nation. Australia and NZ being the powerhouses, but not necessarily politically aligned. Perhaps one went China or SEA, the other went US, so it's more of a geographical region and an ideological battlefield, rather than a nation per-say. With the wrecked island nations being a stumbling block between the two, as well as political ideologies and alliances (and the strength and changing of them) providing more fuel to the fire.
Kind of what it is today, but no-one has really made their choices fully yet. In the future, who knows?