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Peters: Why Jobs And Exports Matter

5 September 2005

Why Jobs Matter And Exports Matter Even More

An address by Rt Hon Winston Peters to a public meeting at Ullrich Aluminium, 118 Wiri Station Rd, Manukau City, Auckland on Friday 02 September 2005 at 2pm

Everybody likes to have a good job.

That’s why MPs are on the campaign trail – they like their jobs and they want to keep them.

But we are here today because we want to help you keep your jobs as well.

You see in this day and age we can no longer take our jobs for granted.

Where once upon a time you would start work for a company at 15 or 16 and could stay there for the rest of your working life – today they estimate that most people will have five or six career changes in their working lives.

But it is our jobs which allow us to actually live our lives and actually determine the quality of our lives.

It is a sad indictment on the two tired old parties in this election campaign that neither of them have made jobs a real priority.

They may pay lip service to them – but they are not doing anything concrete to protect them.

And let’s be clear – New Zealand jobs are under threat and in a big way.

They are under threat from Labour and National’s obsession with signing Free Trade Agreements with low wage Asian economies.

This biggest of these threats is the proposed China Free Trade Agreement.

Let’s look at just what these type of agreements which have already been signed, such as the Thailand Free Trade Agreement, have cost us.

We have Sunbeam, Macpac, Interlock, Electrolux, Icebreaker, Moontide, Bendon, Kathmandu, Fairytown, Debonaire Furniture to name but a few that have all shut up shop and moved to low wage Asian economies.

Each one of these represents hundreds of lost jobs – and lost incomes for NZ families.

Already, what was a trickle is becoming a rushing river and with the proposed China FTA – it will become a torrent.

There are 300,000 manufacturing jobs in New Zealand many of which are at risk from a proposed FTA with China.

That’s your jobs – your livelihoods.

Helen Clark wants New Zealand to be the first developed nation to sign a free trade deal with China

What a feather in the Prime Minister’s cap that would be. What a great photo opportunity.

And Don Brash wants to be in there as well.

But there are sceptics and those who warn of the government’s folly.

And among them are those with direct and relevant experience to back up their view

And these people are urging caution.

Among them is Gilbert Ullrich – Managing Director of Ullrich Aluminium.

He is a leading NZ manufacturer and exporter.

He is also the Chairman of Export New Zealand’s International Trade and Transport Committee.

I think he knows what he is talking about on these matters and I trust his judgment over Helen Clark’s any day.

When it comes to the problems and issues confronting NZ manufacturing companies he is worth listening to.

He thinks the proposed China free Trade Agreement will be bad for our manufacturers. He said recently, “they should not be rushing into an agreement – it is bizarre”.

He added “there are lots of manufacturing companies for sale in NZ but few buyers as it is too easy for China to copy products and make them more cheaply”.

Gilbert Ullrich’s assessment is in line with New Zealand First’s position on the proposed Agreement.

In our view New Zealand is being duped.

What we need to remember when considering the merits – or otherwise – of concluding a deal with China is this:

They have a grossly undervalued exchange rate – kept that way as a matter of official policy

Occupational Health and Safety and other regulations that apply here do not worry Chinese business

Wages are a fraction of those in NZ – one worker here costs as much as 18 in China – the very reason that Invensys, from my electorate, was forced to close its factory in the Bay of Plenty and move to China.

China is notorious in terms of pirating. They show scant regard for honouring the intellectual property rights of others

The reality is that there are over 300 million people in rural China who earn less than $US 2 per day. We cannot, nor should we have to, compete with that.

These factors make a mockery of any concept of fair trade or the infamous “level playing field”.

Right now, our manufacturing sector is engaged in a deadly war of survival.

And remember that is many of our 300,000 manufacturing jobs at risk.

A high stakes game indeed.

For our manufacturers Asian imports are already eroding both their domestic and export markets.

Our manufacturing sector needs support - not a kick in the guts when it is already facing a fire storm of competition.

Now let me give you some facts which highlight just how serious this situation is.

In July the most recent trade figures were released – and they really just confirmed our worst fears.

Our exports have slowed and our imports grown and the gap between what we are making on exports and what we are spending on imports just keeps getting bigger.

In fact the trade deficit – that is how much we make from exports minus what we pay in imports – was a negative $5.3 billion for the year ended July 2005. This trade deficit is a serious contributing factor to our current account deficit, commodities and money, of now over $10 Billion, the largest ever current account deficit in our history.

So when you look at our trade deficit alone and when you break this down, we have a $2.2 billion deficit with China, a $1.5 billion deficit with Australia and a $0.5 billion deficit with Japan.

And these deficits keep getting bigger every quarter.

And what is worse, is that the budget this year contained forecasts that our exports will get even worse still.

Now it would be natural to get gloomy about such prospects – but as the old song goes – “ hang on help is on it’s way”.

New Zealand First has a plan to turn this all around.

We want to protect your jobs and your livelihoods – and we have the plan to do it.

You see in Australia they have over 70 specific programmes aimed at growing exports. We have none.

That will change under New Zealand First. We will: implement a tax abatement scheme that will reduce the tax rate on new export net profit to 20% to ensure that exporting opportunities and innovation are not lost;

further promote innovation by tax incentivised research and development comparative to other first world nations, and ensure that technology transfer occurs within both the public and the private sectors; increase the international competitiveness of New Zealand business by reducing red-tape and compliance costs and work towards lower corporate taxation;

aim to treble exports, in real terms, by 2020 and will set goals to reach that target, commencing with a 'Campaign for Exports' in 2006. This will incorporate a refocusing of the activities of Trade and Enterprise New Zealand to better harness New Zealand's exporting prospects where we have a comparative advantage;

focus on New Zealand's trading performance, and ensure that adequate attention is placed on researching prospective markets, facilitating entry into these markets and ensuring we have a better match between what we produce and what these markets want; review all current and future bilateral Free Trade Agreements (FTAs), including the Closer Economic Relations (CER) process, to improve transparency and accountability and to ensure they are in New Zealand's interest. We will support FTAs that are demonstrably in New Zealand's interests;

in reviewing CER, give priority to gaining access for New Zealand apples to the Australian market and (if necessary) advancing this by referring the matter to the World Trade Organisation; promote a balanced and flexible monetary policy of lower exchange and interest rates that are conducive to real export growth (export and employment objectives will be made part of the policy targets agreement between the new government and the Governor of the Reserve Bank); expand development banking and venture capital opportunities and match these with genuine export market potential;

develop, in conjunction with the export sector, an export credit guarantee scheme that works; actively seek improved trade access by ensuring that the Ministry of Foreign Affairs and Trade is adequately resourced to perform this task; encourage business to engage in import substitution;

place a "buy New Zealand first" requirement on taxpayer and ratepayer owned businesses and state owned enterprises; and, give priority to the needs of New Zealand industries and communities in setting any programme on tariffs. Future tariff removal will be consistent with the policies and progress of our trading partners. We aim to win the export and employment stakes, not some artificial tariff removal race.

You see we believe the proposed New Zealand-China Free Trade Agreement is a Trojan horse which will threaten your jobs.

Do not let it in!

The imbalance of trade with China is already $2 billion and with a Free Trade Agreement that will dramatically worsen.

Ask those who advocate such an agreement just which part of this imbalance is sound economics – it is not.

If you care for your country, if you do not want to see our manufacturing sector gutted and if you do not want tens of thousands of Kiwis, who now have real jobs, become jobless then your choice is clear.

Vote for your jobs.

Party vote New Zealand First – Your choice for a change for the better.


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