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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Government does not understand exporting

Print-friendly 3 comment(s) Posted in: In the media

Comments from Steven Joyce over the last week demonstrate that the Government does not understand exporting say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “Steven Joyce described the jobs being lost due to the high currency as ‘uneconomic’ and their sectors as ‘dying industries’. If he thinks that milk, coal mining, aluminium smelting and wood processing are all ‘dying industries’ then damn near every other exporter should be looking over their shoulder. It is time our leaders moved past the post-industrial fantasy and recognised that onshore value add is something to be prized not disparaged.”

“It is correct to say that a fall in the NZ Dollar will impact living standards in the short-term – imports, TVs, petrol and overseas holidays will be more expensive. However, exporters will earn more, help to balance our current account (stop increasing our international indebtedness), create more jobs and provide a future for New Zealand that looks past the end of this political cycle.”

“An overvalued currency might feel good for a while but cheap imports and offshore holidays don’t help sustain an economy and really don’t matter much when you don’t have a job.”

“There is a reason that the jobs are uneconomic – our policy settings overvalue our currency, and encourage consumption and investment in real estate over investment in productive industries that create growth and jobs.”

“There are a number of options available to the Government which would help to manage the exchange rate – direct intervention is one alternative. Those who claim that it is impossible demonstrate their own lack of understanding. A central bank can technically sell currency forever and build up huge foreign reserves – there is not a speculator on the planet that will stand against a central bank that means what it says when it is shorting its own currency. Switzerland’s experience is clear, unequivocal evidence of that fact.”

“As the world changes clear and open policy debate is vital. This issue is more important than personalities or playing politics. Introducing spurious nonsense such as claiming exporters want two exchange rates or attempting to substitute proper debate with pejorative references is not helpful. We need to deal with the problem not play games,” says Mr Walley.

“Increasingly policy frameworks that focus on exchange rates and inflation are being implemented around the world and are truly best practice among export dependent nations.”

“The key point is that we must balance Total Foreign Costs (including privately sourced foreign debt) and Total Foreign Earnings in order to stop the increase in Foreign Debt. Allowing our current economic settings to continue is to knowingly support the mortgaging of New Zealand with no productive asset to show for the increased debt.”

“It takes a particular sort of world view to dismiss the empirical evidence that our policy settings have failed us while others have succeeded. A new normal needs different thinking and it is hard to dismiss what the likes of the Chief Economist of the IMF Olivier Blanchard or economists Joseph Stiglitz and Jeffrey Frankel have to say.”

“The fact that can’t be escaped is that extending the status quo for as long as possible will come with a huge bill at the end.”

tags: steven joyce, exchange rate, current account


3 Comment(s)

Kunz Walter - 21 September 2012 at 9:05 AM
Different approach

Les/ Wally – why are you guys riding the same wave again and again – without actually having success ? I made several attempt on with a new idea how to stabilise and lower the NZ$, unfortunately without responses from you guys. Here are the links again. go to 6:30min.

I think you could start a petition/ initiative with some of the parliamentarians/ parties interested and in support of such an idea.
Kunz Walter - 21 September 2012 at 9:11 AM
The current government under the leadership of Key/ Joyce even don’t understand the concept Economy vs Society.
As I expressed many times one cannot change politician's economic point of view until NZmanufacturing becomes part of our culture.
Peter Hume - 21 September 2012 at 14:25 PM
Hi Walter, yes changing the culture is key - that takes a while. I think the will to make a change is more important than the method of doing so. If the Government decided it wanted to deal with the NZD they would find plenty of options available to them.

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