OECD report applauded by manufacturers

Media statement Thursday, December 11th, 2003

OECD report applauded by manufacturers

The OECD report on New Zealand highlights a raft of issues manufacturers have in dispute with Government, the Employers & Manufacturers Association (Northern) says.

"Traditionally Government grabs the best of an OECD report to boast about its achievements," said Bruce Goldsworthy, EMA's Manager of Manufacturing Services.

"While we acknowledge some progress is being made, we're finding the OECD is now criticising Government policy and actions on the very same issues we have long disputed.

"Always increasing business compliance costs is no way to boost manufacturers' productivity but the OECD report identifies New Zealand's challenge is to boost the growth of productivity.

"The decision last week by Health Minister Annette King to 'harmonise' (?) upwards the costs of our dietary supplements and other low risk medical aids to match Australia's is just the latest example.

"No wonder some Australian companies supported the move; the cost of complying in New Zealand will now match their ridiculously expensive and ineffectual regulations.

"Company tax rates are a bone of contention; the OECD says ours are no attraction if we want to entice increased investment into productive capacity.

"EMA agrees wholeheartedly with the report that lower company tax rates should be the preferred option to encourage investment - though EMA would underline the need for urgency.

"A lower company tax rate would also contribute to increased investment in R&D, which according to the OECD is an area in need of far more attention.

"EMA couldn't agree more since our present complex array of grants camouflages rather than incentivises, the scope for innovation.

"Government's penchant for wanting to pick winners is also criticised, a criticism again echoed by manufacturers.

"Other bottlenecks to growth recorded are infrastructure such as roads and electricity which are holding back overall productivity improvement for manufacturers.

"Government actions in these areas have been laborious and lacking in confidence.

"On environmental issues, manufacturers say desirable outcomes should be balanced with social and economic impacts, rather than have the environment dubbed with some mythical priority ranking."

ENDS

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