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Latest manufacturing closures commercial reality

July 13th, 2004

Latest manufacturing closures commercial reality

The announcement by Electrolux in Christchurch yesterday is the latest in a spate of manufacturing close downs announced recently; others were from Click Clack and Sunbeam, both in Palmerston North, with forewarnings of job losses hanging over Kawerau and other forestry operations.

The Electrolux closure will see 150 jobs go; Click Clack 30; and Sunbeam, 122 staff losses.

The Employers & Manufacturers Association (Northern) says the close downs are unfortunate though representing commercial reality.

"The reasons for the closures vary, but why large parts of our manufacturing capability are being relocated to Australia are easily identified," said Alasdair Thompson, EMA's chief executive.

"Many manufacturers prefer to base their trans Tasman operations in Australia because:
* Australia has a domestic market eight times larger than ours;
* Australians have disposable incomes about 30% per capita greater than ours;
* Australia's economic growth has outperformed ours for the past 30 years, with opportunities for faster business growth better;
* Obtaining resource consents in Australia is simpler and less costly;
* Capital markets across the Tasman for raising development funds are larger and better developed;
* Australia's headline company tax rate is three cents lower than ours which is a 9.1% advantage.
* Australia's central and state governments can afford huge investment incentives to attract industry and jobs;
* Australia's attitude to business is welcoming.

"With the broad support of Kiwis, our government at both central and local levels, need to treasure investors in business for the jobs, technology and higher standards of living they can bring.

"We don't want to afford business handouts and other forms of corporate welfare, so we have to create a business environment that fully supports business growth."


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