Manufacturing Matters to New Zealand - 17 April

The Labour Party announcement today recognises the simple truth that the manufacturing sector really matters to New Zealand’s economy as a whole, based on the part manufacturing plays in the growth of the added value element in the tradable sector, driving the development of complex supply chains, skills and well paid jobs; say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “A large number of manufacturers gave evidence to the Manufacturing Inquiry last year and seeing that turn into solid policy upgrades from Labour is really encouraging, as is the acknowledgement that current settings are not working.”

“We hope to see more solid policy announcements from the other participants in the Manufacturing Inquiry. The broader the consensus the better, more manufacturing means better jobs and higher wages and a balanced current account.”

“We heard from David Cunliffe and David Parker on the core themes of Investment, Innovation and Industry, and these ring true. Having decided what outcomes are desirable, the policy settings to encourage those outcomes follow. What was presented was logical, coherent and above all will be welcomed by manufacturers and the people they employ.”

“The policies outlined in the Labour Manufacturing Economic Upgrade include accelerated depreciation, research and development tax credits, changes to Government procurement, monetary policy reform to tackle our overvalued exchange rate and the end of the capital gains tax exemption – this really does tick all the boxes on our major wish list for policy change, changes we have been promoting for a decade.”

“These policies will help level the playing field for exporters and import competing manufacturers, who must compete on the world stage. They will also go a long way to balance investment incentives away from property speculation and towards the productive economy, which all are important to the growth of the economy and well paid employment.”

“Those outside of the manufacturing sector may wonder, why the fuss about manufacturing? The answer is that manufacturing is the prime mover and value adding mechanism for any economy, and is important for fostering innovation, creating high paid jobs and improving productivity. Every job in manufacturing supports more jobs in the wider economy.”

“It is worth noting that an OECD report released recently by the Productivity Commission examined why New Zealand’s productivity lags below OECD averages, and even further below our potential. They estimate a large part of this is due to distance, a fact of life; the other was our low investment, particularly in research and development of “knowledge based capital”. In our view the policies now promoted by Labour will go a long way to doing more of what is possible in lifting productivity in the traded sector and the wider economy.”

Comment from NZMEA President Brian Willoughby can be found here.

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