Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Labour’s plan fails to excite the real economy

15 October 2008

Labour’s plan fails to excite the real economy

Labour has released its Economic Policy indicating a long lost commitment to New Zealand’s real (tradeable) economy, but the policy lacks detail on implementation. The New Zealand Manufacturers and Exporters Association (NZMEA) supports this rhetoric, but after nine years of ignoring the real economy, Labour needs to deliver on the details of this plan.

Labour has targeted getting exports to 40% of GDP by 2020 and 50% by 2030, however, previous targets, such as the aim to be in the top half of the OECD in terms of income per capita, don’t inspire much confidence.

NZMEA Chief Executive John Walley says, “A focus on the productive economy is the only way out of the economic corner we have painted ourselves into. The targets of 40 and 50 percent are achievable, but not without some serious consideration of how we are going to reduce the risks our exporters face. If the risks don’t change, don’t expect more exporters or exports – it really is that simple. Single-minded inflation targeting, which has delivered high interest rates and an overvalued currency, make these targets more wishful thinking that any sort of plan.”

“Good trade deals and infrastructure investment are helpful, but exporters will only take advantage of these improvements if they can anticipate stability in exchange rates and competitive interest rates.”

Labour has announced that it will attempt to coordinate its fiscal policies with monetary policy in order to reduce the impulse to inflation, which forces the Reserve Bank to raise interest rates under our current monetary policy rules. It has also announced plans to make capital more readily available to New Zealand firms through consultation with managers of Kiwisaver funds, and the superannuation fund, on how to facilitate increased local investment.

“A capital investment taskforce is another example of talk masquerading as action. An earlier example is the Manufacturing+ scheme that predictably came to nothing, along with the Select Committee inquiry into monetary policy,” says Mr. Walley.

“Monetary policy and our tax rules underlie our competitiveness in the tradeable sector. We don’t need more talk, we need better rules that support and encourage exporters to invest and expand.”

“Innovative growth depends on investment in research and development, plant and process development, and people development. Labour has increased incentives for R&D, but the current monetary policy framework has delivered ever increasing trade deficits rather than investment, so changes are needed if improving our tradeable sector is a serious target.”

“A system that targets inflation without overvaluing the exchange rate must be a priority.[1] Where is the leadership on this issue?” asks Mr. Walley.

“Labour has stated its intention to work with exporters to achieve these targets, but Government must simply focus on creating rules that invigorate the export game.”


ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO:

Divesting: NZ Super Fund Shifts Passive Equities To Low-Carbon

The NZ$35 billion NZ Super Fund’s NZ$14 billion global passive equity portfolio, 40% of the overall Fund, is now low-carbon, the Guardians of New Zealand Superannuation announced today. More>>

ALSO:

Split Decision - Appeal Planned: EPA Allows Taranaki Bight Seabed Mine

The Decision-making Committee, appointed by the Board of the Environmental Protection Authority to decide a marine consent application by Trans-Tasman Resources Ltd, has granted consent, subject to conditions, for the company to mine iron sands off the South Taranaki Bight. More>>

ALSO:

New Report: Waitākere Kauri - Look After It, Or Lose It

With no cure for kauri dieback disease and treatment options still being trialled, the Auckland region faces a very real threat – take urgent action in the Waitākere Ranges or risk losing kauri from our forests altogether. More>>

ALSO: