David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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Focus on savings and investment good but dollar and tax can’t be ignored

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Savings and investment are worthy objectives but they will only follow higher earnings. Higher earnings require resurgence in our export economy and that will not occur without changes to monetary policy and the tax system say the New Zealand Manufacturers and Exporters Association (NZMEA). These systemic issues must be the priority.

NZMEA Chief Executive John Walley says, “Asset sales can fix a fiscal deficit in the short-term but some long-term thinking on how to boost tradeable economic activity is desperately needed.”

“The biggest obstruction to an economy based on exports, savings and investment is a volatile and overvalued New Zealand dollar.”

John Key mentioned in his speech that in the past economic cycle, “High interest rates in turn led to an over-valued exchange rate which smothered the internationally-competitive sectors of the economy, like agriculture, horticulture and manufacturing”, and went on to say, “Our exporters found it hard to sell their products at competitive prices overseas because of the high value of the dollar.”

Mr Walley says, “These comments are spot on but for one thing, there is no past tense, unfortunately the conditions are still in place. Nothing has been done to address the underlying policy distortions that create them. Our interest rates are still among the highest in the developed world, our banks are borrowing offshore and importing the loose monetary policy of others, and the NZ dollar remains the clear favourite of the speculators; all this undermines our export performance and competitiveness. Changes to monetary policy are needed to fix this.”

The Tax Working Group comprehensively reviewed the tax system but the Government has only tinkered around the edges. New Zealanders will continue to save through property rather than investing in our productive businesses while property gains remain tax free. A capital gains tax or land tax (as recommended by the Tax Working Group) is long overdue.”

tags: savings, investment, john key, national, monetary policy, capital gains tax, land tax, tax working group


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