Manufacturers
threaten to quit NZ
Opposition's
parliamentary inquiry hears firms on verge of leaving country because
of high exchange rate.
29
January, 2013
More
leading export companies are on the verge of moving overseas due to
the high dollar, Opposition MPs were told yesterday by manufacturers,
who challenged the Government to do more to control the exchange
rate.
Labour,
the Greens, New Zealand First and Mana were holding the first of a
series of hearings into what they say is the crisis in manufacturing.
MPs
heard from business and union leaders as well as the chief executives
of several leading export companies.
All
said the exchange rate was their biggest headache and most warned
they were considering moving overseas to stay in business.
David
Bennett, managing director of Pacific Helmets, which manufactures
helmets for fire services and other specialist applications, said his
company wanted to stay in Wanganui, where it began in the 1970s, "but
things are against us".
In
2001, a helmet selling for US$100 would generate $250 for the
company; today the same helmet cost the same to manufacture but was
generating just $127, Mr Bennett said.
Even
at the average exchange rate over the last 10 years the return on the
helmet would have been about $140 to $150.
Today's
exchange rate meant a loss of about $27, Mr Bennett told MPs.
"Now
you multiply that across tens of thousands of helmets and then across
lots of companies that sell products overseas and that's the dollars
that we're missing out in the New Zealand economy."
Stewart
Hyde, manufacturing manager of Wyma Engineering, which makes
vegetable polishing and handling machinery, said his company was
recognised internationally as producing state-of-the-art equipment.
But
difficulties competing internationally with a high exchange rate had
forced it to source about four-fifths of its componentry from
overseas, mainly China.
That
had cost about 40 local jobs. The company was now considering moving
its final assembly overseas.
"The
question I would pose is how much does the Government want us to stay
in New Zealand?"
Economic
Development Minister Steven Joyce yesterday said he didn't agree
there was a crisis.
"Nobody
is arguing that being a manufacturer isn't challenging - in my
history in business every time in business is challenging - but going
around and trying to talk down the New Zealand economy and talk about
a crisis in manufacturing is not particularly helpful."
Hamilton
Jets managing director Keith Whiteley said other countries were
"moving away from the single policy setting and are using
interest rates to control exchange rates. New Zealand has to start
looking at those issues."
Minister
Joyce warns 'not to talk up' crisis
Currency
intervention a fool's paradise, says Joyce Joyce
29
January, 2013
The
Labour, Green, New Zealand First and Mana parties are holding a
parliamentary inquiry into manufacturing after the finance select
committee blocked a request for a similar investigation.
Businesses
and unions appearing before the inquiry said the sector is being hit
hard by the high and volatile exchange rate.
Economic
Development Minister Steven Joyce says the Government is doing all it
can to help the manufacturing industry but will not intervene in the
exchange rate.
…
Mr Joyce told Radio New
Zealand's Morning Report programme on Tuesday it "becomes a bit
of a fool's paradise" for a Government to intervene in the
exchange rate.
The
minister said the last time that was done was in the 1970s and was a
big mistake.
"We
all know how that turned out when we took a bet with the kiwi dollar
against the world and lost," he said.
"My
view of it is that the dollar is pretty high for some exporters, and
my feeling is that it will come back over time, because it is based
around the fundamentals of what people think the world economies are
doing."
Mr
Joyce says nobody is arguing that being a manufacturer is not
challenging, but just like any industry, it is challenging for
different companies and at different times.
"It
all depends on their mix of inputs, where they get their business
from, who they're selling to and all those things.
"There
is no generic crisis in manufacturing but I would certainly
acknowledge it is challenging for some companies."
The
Labour Party says this country has fallen behind the world with its
monetary policy as the country's most high value exporters complain
they are struggling against the high value of the dollar.
Labour's
finance spokesperson David Parker says countries such as Switzerland,
the US, Singapore and China are prospering by intervening in their
currency markets in different ways.
"And
yet New Zealand, we sit here like saps and we've got an exchange rate
which is driving people towards the wall."
Mr
Parker says manufacturers are also complaining about the tax system,
saying it does not distribute money into productive parts of the
economy
Listen
to more on Morning Report
Redundancies
gathering pace, says union
The
political parties holding the inquiry say 40,000 jobs have been cut
from the manufacturing sector in the past four years and change is
needed to reverse the trend.
Engineering,
Printing and Manufacturing Union general secretary Bill Newson said
not only have jobs been lost, but in the past year the trend of
redundancies in manufacturing increased markedly.
"Over
last year we had an average of two separate companies for every week
of the year that notified us of the need to talk about redundancies
as a result of downsizing, closing down or sending work overseas."
Mr
Newson says when the union spoke to the employers about the reasons
for the redundancies, a common theme was the high and volatile
exchange rate.
Exporter
tells of moving jobs offshore
An
exporter of vegetable processing equipment told the inquiry the
company may be forced to source all its materials from China because
of the high New Zealand dollar.
Wyma
manufacturing manager Stewart Hyde said the engineering company is
being crippled by the relentless rise of the dollar.
He
says his company has now transferred more than 40 manufacturing jobs
to China.
"The
question I would pose is, to what extent does the New Zealand
Government want us to stay here, what policy settings are going to
change to make that happen."
NZ
Post wants cut in minimum delivery days
19
January, 2013
New
Zealand Post is proposing changes that would allow it to reduce the
number of days it delivers mail to most addresses from six to three
days a week.
The
number of items mailed last year was down 24% compared with 2002.
Communications
and Information Technology Minister Amy Adams said the company wants
greater flexibility in its postal services as mail volumes are
forecast to fall further.
"In
light of those significant reductions in mail volume, New Zealand
Post is seeking to make changes to the Universal Service Obligations
it is bound by."
Under
its current Deed of Understanding, New Zealand Post must provide
delivery on six days a week to 95% of addresses.
It
wants to change that to not less than three days a week delivery to
99.88% of addresses.
Ms
Adams said New Zealand Post also wants to introduce more self-service
kiosks.
Submissions
on the proposals close on 12 March.
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