Extraordinary times call for extraordinary action

Media statement
Thursday, February 26th, 2009

Extraordinary times call for extraordinary action

Many New Zealand manufacturers who took official advice are amongst those worst affected by the global financial crisis, says Bruce Goldsworthy, Manager of the Manufacturing division of the Employers & Manufacturers Association (Northern).

"Many of our manufacturers who took government advice and became niche suppliers to the high end of the market are now facing ruin," he said.

"Others urged on by government took some of their manufacturing capacity overseas and are finding their reputations being questioned at home.

"Some of those comments are plain ridiculous.

"Our manufacturers employ 225,000 people as at December 2008 with another 25,000 or so self employed in a wide variety of manufacturing occupations.

"They earn in aggregate $35.2 billion a year from exports, and they're amongst the most highly skilled people in the country, with some amongst the most highly paid.

"Now that the exchange rate has moved back to a realistic level - below the 10 year average - many of our manufacturers are well placed to add much more value locally to local resources, and employ more people than the currency hitherto allowed.

"The one thing lacking is new orders. Over the last three months the PMI Index of manufacturing activity recorded the three lowest New Orders figures since it began.

"If we lose the skilled and efficient workplace teams in manufacturing workplaces the economic recovery will take far longer than if we came to rely largely once again on meat, wool and dairy sales as we did 50 years ago.

"To carry manufacturers and other businesses-at-risk through the recession demands the slashing of the costs of doing business in New Zealand.

"In the quest to do this, and create jobs, the government needs to consider cutting the company tax rate and/or for a year allow all plant and equipment to have its value written down to zero for tax purposes.

"For both measures the tax revenue at stake is not lost to government but merely postponed.

"Both measures would lift the business confidence needed to invest and create jobs, and in that way pay for themselves over and over again."

ENDS

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