Why are we talking of a recession?

New Zealand Manufacturers and Exporters Association
Corner Cambridge Terrace & Manchester Street
PO Box 13-152, Christchurch, New Zealand

Website: www.mea.org.nz
Email: mea@mea.org.nz

NZMEA Media Release, Thursday 20 March 2008.

Why are we talking of a recession?

The New Zealand Manufacturers and Exporters Association (NZMEA), is concerned that the Government is undermining confidence in the economy by premature talk of a recession.

The Association says that while growth in the economy has slowed, New Zealand is not yet in a recession despite international conditions. The Government has finally acknowledged that households and businesses are coming under increasing pressure but instead of talking the economy downwards, the Government should be more proactive in terms of its policy response to revitalising growth throughout all the economy.

“We are back to a situation of rearranging the deckchairs while talking of the sinking ship”, says Chief Executive John Walley.

“Government policy is too heavily weighted towards the primary sectors and it is relying on the immediate return from commodity prices to keep the economy afloat. Rather than implement policy support for differentiated products and elaborate technology across all sectors of the economy that can improve New Zealand’s export mix, we continue to increase our dependency on the quantity of our exports, rather than quality”.

“Targeted grants and funding models aimed at certain sectors are useful for the individual companies that are included in that particular scheme. However, Government is not qualified, its resources are too thin to pick winners, and there will never be agreement across the board in where what money there is, should be applied. Rather than wasting time about talking about whether New Zealand is facing a recession and promoting ever more funding projects, what is needed is an inflation control mechanism that does not drive up the exchange rate with speculative pressure and tax breaks targeted at supporting productive investment across all sectors of the economy to improve, on a structural basis, the trajectory of the economy”.

MEA – the authentic and independent voice for manufacturers and exporters.

davidmiller@mea.org.nz or david@cma.org.nz

The New Zealand Manufacturers and Exporters Association (MEA) is a national organisation that was founded by the Canterbury Manufacturers Association (CMA) and the New Zealand Engineers Federation (NZEF). The MEA is New Zealand's only sector focused and independent voice of manufacturers and exporters. MEA members make nearly $2.0 billion in sales and have an export value of around $1.0 billion. Our organisation can trace its beginning to the early history of New Zealand.

As a legacy of the hard work and careful financial management of the past, we have a significant asset base that enables our independence and extends our activity. Subscriptions fund only a small part of our current operating costs.

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