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Loss of value-add holding back NZ exports

27 March 2014

Loss of value-add holding back NZ exports

Despite record commodity prices, New Zealand’s exports are falling short of their potential as manufactured exports fall, Green Party Co-leader Dr Russel Norman said today.

New figures from Statistics New Zealand show that the value of milk powder and log exports increased rapidly in recent years but those gains have been largely offset by the big decline in the value of manufactured and other exports.

“In government, the Greens will focus on adding more value to our exports. We should be exporting high-value, high-tech goods made from the resources that we produce. That would create jobs and wealth here in New Zealand. Instead, we are just exporting those raw commodities and letting other countries capture the value of manufacturing them,” said Dr Norman.

“Despite the surge in commodity export revenue, the inflation-adjusted value of exports has risen by just 4% since John Key came to power. Rising commodity prices have increased revenue from milk powder and logs but the value of all our other exports has plunged.

“National is nowhere near on track to meet its goal of increasing exports to 40% of GDP by 2025.

“Manufactured exports are down 20% under National, including a 4% fall in the past year.

“National seems to think we can just ride on a wave of rising commodity prices forever but, as the recent fall in milk prices shows, that wave will break sooner or later. When commodity prices fall, we’ll find that the value-add parts of our economy are a shadow of their former selves.

“If we want a truly prosperous and environmentally sustainable New Zealand, we need smart, modern manufacturing and other high-value sectors. We can’t just rely on China having an unending appetite for our milk and logs.

“The Greens will support high-value manufacturing by working to get the dollar down to a fair level. We will support Kiwi manufacturers by ensuring that the government buys Kiwi-made when it can. The Greens will support innovation by investing in research and development and through measures such as our Structural Timber Award.

“The Greens’ plan will create high-skill, high-wage jobs and mean that New Zealand earns more for its exports while doing less harm to the environment,” said Dr Norman.

Additional information:

inflation-adjustedMilk powder and logsManufactured exportsTotal exports
Year to November 2008$ 7,485,205,405 $ 13,777,438,491 $ 47,743,228,690
Year to February 2013$ 9,792,462,267 $ 11,598,265,382 $ 46,745,802,979
Year to February 2014$ 13,230,677,303 $ 11,086,557,551 $ 49,710,694,687
Change: Nov 08-Feb 14$ 5,745,471,898-$ 2,690,880,939 $ 1,967,465,997
Change: Feb 13-Feb 14$ 3,438,215,036-$ 511,707,831 $ 2,964,891,708
Change: Nov 08-Feb 1477%-20%4%
Change: Feb 13-Feb 1435%-4%6%

Source: Statistics New Zealand


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