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.

bcunningham@nbr.co.nz