Without the will, we will not find the way
The New Zealand Manufacturers and Exporters Association, (MEA), is critical of Treasury’s response to the Firms’
Decisions on the Location of Economic Activity - a Survey report released earlier this week, saying that it is yet
another failure on the part of Government officials to move away from the “candle in wind” attitude which the Government
has hung on to for too long.
“The themes contained in the report present some clear warning signals to the Government”, says Chief Executive John
Walley. “When none of the respondents can identify compelling reasons to remain in New Zealand, regard foreign
manufacturers to be of lower cost and higher quality, and believe that research and development will follow production
offshore, there has to be a serious concern”.
Mr. Walley says that the response to this report from Treasury unfortunately contributes little more than excuses for
doing nothing, and is yet more of the fatalistic thinking that runs throughout the Government economic thinking.
“Once again, it is the retreat to the argument of inevitability; nothing can be done so there is no need to try so, just
let things happen, it is not our fault”.
“Outsourcing makes sense for some companies and being a part of international networks offers benefits, but New
Zealand’s economic success depends on our ability to retain the capability, knowledge and skills that we possess.
However, we continue to lose key elements of our manufacturing base needlessly, because of poor policy settings and this
is just dumb and lazy policy”.
Mr. Walley says Treasury’s assertion that lower costs offshore will bring benefits for New Zealand firms is short
sighted, “here and now” argument because while is the case at present, it is unlikely to remain that way once the
‘developing’ economies mature.
He also questions its case that resources freed up from off shoring will be able to underpin future economic growth
because New Zealand does not have a large enough pool of companies making and selling elaborate products.
“When the Government moves decisively to place elaborates at the heart of export growth, embraces pluralism, encourages
productive behaviour and works much harder to stabilise the exchange rate, then the exit trend of people and activity
might be reversed and New Zealand can build a substantial and solid manufacturing and exporting base. Yet we cannot
achieve these goals when policy settings overvalue the exchange rate, do nothing to curb domestic inflation and place
interest costs amongst the highest in the OECD”.
The only way forward for New Zealand is to sell more elaborately made things to more people, but if we cannot find the
will to change and adopt tangible solutions for export growth, our way to increased productivity, a unified economy and
a first world future will never be found”.
MEA – the authentic and independent voice for manufacturers and exporters.
ENDS