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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21/2/13

Graeme Wheeler speech – “best to do nothing”


Print-friendly 1 comment(s) Posted in: In the media

The Reserve Bank Governor, Graeme Wheeler’s speech yesterday was essentially more of the same – an ongoing attachment to orthodoxy reinforced by a reluctance to do anything new, believing it is best to do nothing as change always has its risks, says the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “Mr Wheeler outlined the risks of each policy change and rejected each of them in turn. Best to live with the current choices and associated risks: all a bit hard to take when, as an exporter, your back is to the wall.”

“We saw technical analysis from John McDermott a couple of weeks ago and more from Mr Wheeler yesterday; all good analytic reasons for their position. Unfortunately the analysis seems to miss the fact that high quality, high value, high tech manufacturers don’t have the confidence to invest in New Zealand.”

“We agree with Mr Wheeler’s analysis that New Zealand has a structural problem in terms of balance of payments, savings, productivity and real investment. These are all manifestations of the existing “low risk” policy settings; the real risk is that nothing changes before it is too late for many exporters.”

“There is more to currency intervention than the spot market, as it has been demonstrated by many central banks around the world. There should be more than one lever and more than one target. The Kiwi dollar needs to be more than a one-way bet for speculators, and to move away from this, we need to target inflation and financial stability together by using policy tools in a complimentary manner.”

“Discussion around the use of loan to value ratios (LVR), for financial stability reasons, is a major step that can crimp debt growth in a targeted way and avoid our exporters being sacrificed under the threat of yet another asset bubble. We have been calling for this since before the Global Financial Crisis, the RBNZ should be moving with urgency in this area.”

“The manufacturing export sector is the one of the highest paid sectors in the economy and it is arguable that higher earnings are a precursor to savings. Given that we need more jobs in the manufacturing sector, promoting investment in the sector drives productivity, earnings and savings and, incidentally, helps the balance of payments. Having said this, why is the manufacturing export sector treated as an optional extra in policy as opposed to the core strategy to solve our problems?”

“These changes require vision and action across monetary and fiscal policy.”

“Is anyone listening?”



tags: graeme wheeler, exchange rate, monetary policy, rbnz

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1 Comment(s)



Don - 24 February 2013 at 16:39 PM
Alan Greenspan held America's interest rates artificially low for fifteen years and created an unprecendented economic boom in their history while the politicians had a ball redistributing taxpayer funds and/or Federal Reserve printing press money, out of nothing while charging interest on it.
Then the 2008 crash.
Can the same thing happen in New Zealand with our Reserve Bank while it keeps interest rates artificially low instead of leaving them to the free market forces ?

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