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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Monetary and fiscal policy headline Labour’s economic package

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Monetary and fiscal policy changes designed to reduce exchange rate volatility are the high point of Labour’s economic policy announcement say the New Zealand Manufacturers and Exporters Association (NZMEA). Labour have proposed the removal of tax harbours that exacerbate domestic inflation and measures to widen the Reserve Bank’s objectives to include the health of the export sector, exporters on the Board of the Reserve Bank and countercyclical tools along with the Official Cash Rate.

NZMEA Chief Executive John Walley says, “A commitment to monetary and fiscal policy that supports the export sector rather than overvaluing the New Zealand dollar is a necessary precursor of investment in the tradable sector. Jobs will follow that investment. It is also good to see the necessary flow on through changes in the make up of the Reserve Bank Board and in the Reserve Bank Act to provide the freedom to use regulatory tools against domestic inflation.”

“It is worth noting that a one percent rise in New Zealand’s exchange rate costs exporters approximately $200 million a year, and with the volatility we see in the graph above, this cost and knock on consequences to the structure of our economy are immense.”

“Removal of the capital gains tax harbour will help to direct funds, provided by the equally important savings policy, towards productive activity rather than static and jobless assets. Add in the research and development tax credit and local preference, and we are starting to see a fairly coherent and comprehensive economic reform package for New Zealand, similar to what we see overseas. This is what is needed to increase export earnings.”

“New Zealand has been in a policy time warp for the best part of 20 years; what was necessary and mainstream in the 80s has moved on. The world in the midst of a financial crisis and growing debt sensitivity has changed and a different policy response is necessary.”

“Exchange rate stability, production and innovation incentives have been the long-term policy positions of the NZMEA. It is good to see some of these policy points being picked up – more on this can be seen at”

tags: monetary policy, fiscal policy, exchange rate, reserve bank, capital gains tax


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