Comments

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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5/3/12

Monetary policy change needed


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With Dr Alan Bollard due to leave the Reserve Bank of New Zealand there is a clear opportunity to review and change the Policy Targets Agreement between the Reserve Bank Governor and the Minister of Finance say the New Zealand Manufacturers and Exporters Association (NZMEA). There is little prospect of any change to the Official Cash Rate in the Monetary Policy Statement on Thursday, but a real debate on whether our monetary policy is serving New Zealand’s interests is urgently needed.

NZMEA Chief Executive John Walley says, “Interest rates consistently among the highest in the developed world have caused a long-term overvaluation of the New Zealand Dollar, hitting exporters hard. Monetary policy has been the biggest reason for this.”

“Borrowing to finance spending, as evidenced by a structural current account deficit, is no way to run an economy. Changes must be made to ensure export competitiveness.”

BERL Chief Economist Dr Ganesh Nana has suggested that the Reserve Bank’s target be changed to:

“The primary function of the Reserve Bank is to monitor the availability of credit to business to ensure the growth of profitable export income-earning enterprise consistent with an external balance of payments target that reduces the nation’s external debt.”

“This seems like a more sustainable approach,” says Mr Walley.  “Our living is earned by exporters in offshore markets and import substitution: as it is elsewhere in the world, this must be the focus of our monetary policy.”

“Pretending what we have is working only defers the problem. We must act now to support our tradable sector.”
 



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