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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PTA same old same old

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The new Policy Targets Agreement (PTA) between the Reserve Bank and the Finance Minister remains rooted in a discredited past orthodoxy and sets the scene for greater contraction in the export sector say the New Zealand Manufacturers and Exporters Association (NZMEA). The new Agreement between Graeme Wheeler and Bill English released yesterday detailed only minor changes.

NZMEA Chief Executive John Walley says, “The world has changed since the theoretical foundations of inflation targeting in the 70’s and its implementation in the 1980s. In today’s world deflation is a far greater threat to our economy than inflation. A persistently overvalued currency has caused the tradable sector of the New Zealand economy to shrink since 2004. To a large extent that has been driven by policy contrasts between our central bank and central banks elsewhere. While New Zealand has strictly targeted inflation other central banks have taken a wider and more flexible approach.”

“We have now fallen well behind current international practice with our monetary policy – mindsets have to change.”

“A number of fast growing Asian countries were the first to catch on to a monetary policy framework that allowed exports to prosper and their economic growth has reflected that. More recently a large proportion of the Western world has started to focus on external growth in response to the global economic crisis.”

“Unfortunately this decision has left New Zealand lagging behind.”

“The decision to take asset prices into account as a measure of financial stability is a helpful tweak but it is only the tip of the iceberg. Without changes to the targets of the Reserve Bank Act we will only see a continuation of conditions that suit banks, and currency and asset speculators, rather than those earning export incomes.”

“This is another sign of the Government neglecting export growth. This stance has and will continue to cost us dearly in terms of growth, jobs and incomes.”

tags: policy targets agreement, rbnz, graeme wheeler, bill english, inflation targeting


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