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

 




Civil Contractors: Massive Rebound In Civil Construction Business Confidence

New Zealand’s civil construction industry is riding a massive rebound in post-pandemic business confidence – but this may be undermined by skills shortages, which continue to be the industry’s number one challenge... More>>



Energy: Feeling Our Way Towards Hydrogen - Tina Schirr

Right now hydrogen is getting a lot of attention. Many countries are focusing on producing hydrogen for fuel, or procuring it, or planning for its future use... More>>

Maritime Union: Calls For New Zealand Shipping To Resolve Supply Chain Crisis

The Maritime Union says there needs to be innovative responses to ongoing shipping congestion. Maritime Union of New Zealand National Secretary Craig Harrison says it is essential that New Zealand develops its own shipping capacity... More>>


Housing: New Home Consents Continue To Break Records

A record 44,299 new homes were consented in the year ended June 2021, Stats NZ said today. “The annual number of new homes consented rose again in the June 2021 year, the fourth consecutive month of rises,” construction statistics manager Michael Heslop said... More>>


Real Estate: June Home Transfers Remain High
There were 44,517 home transfers in the June 2021 quarter, the highest June quarter figure since 2016, Stats NZ said today. The number of home transfers was very similar to the March 2021 quarter and was up 18,252 from the June 2020 quarter... More>>



Statistics: Household Saving Falls In The March 2021 Quarter

Saving by New Zealanders in the March 2021 quarter fell to its lowest level in two years after rising sharply in 2020, Stats NZ said today. Increases in household spending outpaced income growth, leading to a decline in household saving from the elevated levels that prevailed throughout 2020... More>>

ALSO: