Manufacturing inquiry to reflect importance of exporting to NZ economy

The global financial crisis has shown New Zealand’s economy cannot survive without manufacturing.

The New Zealand Manufacturers and Exporters Association (NZMEA) believes the country has woken up to the value of manufacturing and will be pushing for a more hands-on government approach during today’s parliamentary manufacturing enquiry.

Opposition parties Labour, New Zealand First, the Greens and Mana have teamed up to host the inquiry.

Labour leader David Shearer says manufacturing is in trouble. He claims 40,000 jobs have been lost and more than 1000 manufacturing companies have closed their doors in the last four years.

“This is a crisis that is leading to more unemployment, lower export earnings, increased dependency on imports, higher international debt, and, ultimately, a poorer New Zealand," he says.

"The crisis is hammering communities from South Auckland to Bluff, from Kawerau to Greymouth."

Last August, NZ First leader Winston Peters called on cross-party support for his member's bill to amend the Reserve Bank rules to boost the “struggling export sector” and focus less on inflation control.

NZMEA chief executive John Walley will be at the inquiry, making his own submission for a change in government policy.

He says for many years the stance of governments in New Zealand has been to stand back with the intention to treat all equally. He says it is claimed government does not have the skills to intervene in business and should focus on ‘neutral’ policy settings in the economy and let business sort out business.

“However, in doing so, government does make choices, whether through action or inaction, and those choices do resonate with the economy - a choice to focus monetary policy on inflation conventionally has also been a choice to ignore the exchange rate.”

Mr Walley says inflation targeting by many reserve banks around the world came into question with the arrival of the global financial crisis.

Half a dozen other exporters and manufacturers will be presenting their views along with the EPMU union, which has already voiced its concern at the state of job losses in the industry.

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I have a solution: lower the wages to the same level of China and manufacturing not only will stay in NZ, but foreign compainies will choose NZ over China to make their products.

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Hooray! a race to the bottom. Low wages and pollution for all!

Alternatively, we could concentrate on ensuring we have a highly skilled manufacturing base.

Leverage 100% pure with "Kiwi Ingenuity", and lead the world in small industries that have much higher margins.

We've done it before with NavMan and Rakon.

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Contrary to new economic thinking, sacrificing a manufacturing base or agriculture base actually erodes a country's sovereignty. Who then takes governance because they are the most favoured in international law? The multinational corporations. If you don't believe me then take a close look at the World Trade Organization and especially what is known, so far, about the Trans Pacific Partnership.

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There are two types of capitalist enterprise:

One that makes things - creates value. One doesn't create value, but skims as much money as it can from the other.

It can do this because it has monopolies on lands, capital ... and increasingly monopolies on the copying of information, aka: "IP".

The latter - the rentier class - is a blight on this country and a blight on the planet. John Key is firmly of this class, and he represents the interests of this class, whether they are from New Zealand or not. All emphasis is on pleasing "Investors" while people and companies that actually create value are expected to be servants of Investors.

It's actually fairly easy to change - to improve things. Just shift the tax bias away from wages ... away from people and companies that create value and on to people who become richer by doing nothing.

Land-value tax
Capital- ains tax
Mansion tax
A Tobin tax

@lucy: Are you being sarcastic? NZ has the highest housing costs in the world - about 30% of average income. Where are all these new impoverished workers you are intending to create going to live?

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