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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RBNZ must continue to add tools to monetary policy

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The Reserve Bank announced new tools to be used to prevent future banking crises yesterday with the Core Funding Ratio and new Basel III regulations topping the list. Our economy is way out of balance so any effort to look beyond the simplistic interest rate tool to push back against asset price inflation is welcomed say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “The Core Funding Ratio and Basel III rules are a positive move by the Reserve Bank, and these need to be implemented as quickly as possible. We need to stop growth based on asset price driven debt and consumption - growth from production and exports will be the story of the foreseeable future. In the past decade the lack of a targeted response to the drivers of domestic inflation damaged our productive industries.”

“Any moves to prevent a repeat of these mistakes must be supported.”

“There will be opposition to the speedy implementation of these changes from the banks and heavily indebted sectors, as there may be increases in the price of credit, but this is a necessary part of the rebalancing process.”

“Over the longer term, loans in New Zealand will have less associated risk as a result of the new regulations, and the RBNZ will not need to hike the Official Cash Rate as much, ultimately leading to lower interest rates,” says Mr Walley.

“The Reserve Bank must seek out ways to support, even encourage, the rebalancing of the economy. Weighting reserves by asset class would enable better targeting.”

“Further efforts from the Reserve Bank are needed as an overvalued exchange rate, a persistent current account deficit and a stagnant traded sector demonstrate that we have a system that does not work. These moves are a step in the right direction.”

tags: rbnz, ocr, basel iii, core funding ratio


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