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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NZ Power ticks the boxes

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The NZ Power announcement proposes changes and regulation in the electricity market that are a positive move towards addressing long standing issues in our electricity market after the Bradford reforms in 1998, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “In 2006 we researched and produced a report “Will it take more Blackouts before we see the light?” that considered the electricity supply issues in New Zealand. This research was sparked early in the last decade due to our growing concerns of supply stability and cost of electricity. We identified three main concerns with the current system:

1. The cost impact of the long run marginal cost model.
2. An incentive for generators to game the system.
3. A system bias to build new generation late and in small increments.

“The NZ Power proposals go a long way to addressing our concerns, it has taken a while, but better late than never.”

“The single buyer, average cost model does not have the same opportunity for gaming as it pays the generator a fair price based on the cost of supply and can ensure all low cost supply is in the market.”

“There is no doubt that prices will fall.”

“In supply terms the incentives change from small incremental increases in generation, to larger increments of generation. The single buyer operating an average costs system is not incentivised to keeping the highest cost suppliers in the market.”

“The NZ Power proposal addresses our long held concerns about the New Zealand electricity supply system. Manufacturing exporters are under severe cost and margin pressure; it would be good to see some comparative advantage against our trading partners for once.”

“It is worth noting that many large industrial users buy at close to a margin over actual cost but most small to medium users are disadvantaged by the current marginal cost model.”

“Lower domestic electricity costs mean more domestic demand for other consumption, which would be beneficial to those selling into the domestic market.”

tags: nz power, electricity, labour, manufacturing


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