New Zealand's manufacturing story over recent years has been one of change, with job losses in some traditional areas balanced by strong growth in new areas such as high value-added manufacturing, Treasurer Bill English said today.

"Exports of high value-added manufacturing in New Zealand are growing at 15% a year. This is the area we want to excel in and where our ideas are worth more. We will never compete with Asia on labour costs, so where labour is a big proportion of the overall price of a product we are not going to be competitive and nor do we want to be.

"The clothing industry is a good illustration of this.

"New Zealand is making its mark around the world with high fashion and sports wear. Our top four designers who went to the London Fashion Show have had to close their order books because they simply can't cope with the demand. A group of Wellington's designers had a tremendous response to their show in the Capital last week. This is the direction that we want the industry to grow in.

"The changes at Bendon will be unsettling for the staff involved and the next few months are going to be a difficult time for them. What the Bendon workers need is hope that there will be another job if they lose the one they've got.

"There is hope for them. With the opening of the books today we know that the economy will grow at an average of 3% over the next three years. That means 115,000 new jobs - over 700 each week. Many of these jobs will be in service areas, supporting growing industries like tourism and telecommunications, and that's good.

"Overall employment figures are rising and are predicted to rise by 2% a year on average for the next three years. In the first six months of this year 16,000 new jobs were created.

"Jobs have been lost on car assembly lines. But Labour and the unions want us to believe there is something special about low-paid, low-skilled work on an assembly line. There's not.

"We want skilled New Zealanders in well-paid jobs. That's what the knowledge economy is all about and what the Government's Bright Future package is designed to start addressing.

"Policies that will take us forward are policies that encourage flexible labour markets, policies that increase our international competitiveness, and policies that contribute to a more skilled workforce.

"There is a huge contradiction in Labour's talk about the knowledge economy, because its policies are a step backwards. Union controlled workplaces, higher accident compensation costs, and increased taxes are taking us backwards and will not create one new job," said Mr English.

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