Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Foreign Investment - The canaries in the coal mine

Foreign Investment - The canaries in the coal mine.

The Canterbury Manufacturers’ Association says that internationally owned companies will continue to push the trend of local factory closures and company relocations as they respond to New Zealand policy settings and chase better returns elsewhere, without any bias towards New Zealand interests.

“Foreign direct investment can be a positive thing for the growth of New Zealand companies. Without such investment, many of our firms could not take their products beyond the development phase or push into offshore markets. The other side of the coin is that international ownership tends to act as the “canary in the coal mine” and react first to adverse conditions”, says Chief Executive John Walley.

“For companies such as Electrolux, G.L. Bowron, Dynamic Controls and Gale Pacific, the decisions are made elsewhere without a New Zealand focus. They operate on a sentiment free basis, and are a clear indicator of how our economy is really performing”.

Mr. Walley says that once a locally based operation faces unfriendly exchange rates or other cost drivers, offshore decisions follow; New Zealand’s economy looses that company’s demand for local innovation and production capabilities, and reduces pressure to develop local capability in the future.

“When we see companies like Fisher & Paykel added to the list, and even food processing companies finding it all too hard; everyone of us has good cause to be worried about the future and what the trend says about New Zealand’s policy settings. New Zealand increasingly has to rely on the export of commodities, and as low cost countries develop their own primary sectors, they have the potential to place downward pressure on global commodity prices”, says Mr. Walley.

“Unless things are changed to push back against this obvious trend, then more companies will be lost to New Zealand. There is has to be a better way, other than the OCR to control domestic inflation and take the heat out of the exchange rate. Measures such as mortgage levies, higher equity ratios for lenders and borrowers, variable GST and capital gains tax; that are confined to the internal economy, can be used at time of low interest rates and high global liquidity elsewhere and do not result in driving a bigger wedge between interest rates”, says Mr. Walley.

“Right now, our economy is losing its companies, jobs and skills and will probably lack the resources and capability to get them back, and support complex supply chains in the future. Unless policy settings recognise the needs of exporters, more relocations and closures will continue to happen and we sit like frogs - doing nothing and slowly boiling”.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Mayor of Auckland: Alert Level Change Welcome News

Mayor Phil Goff says the government’s decision to move Auckland to Level 2 from 6am on Sunday will be welcome news for all Aucklanders.
“Moving strongly and quickly to contain this outbreak has once again proved effective in stopping the spread of community transmission and I thank all the Aucklanders who have followed the rules of Level 3 over the past week,” he says... More>>


Earthquakes: Tsunami Activity – Cancelled

The National Advisory issued at 2:48pm following this morning's earthquakes near the KERMADEC ISLANDS REGION is cancelled.
The advice from GNS Science, based on ocean observations, is that the Beach and Marine threat has now passed for all areas... More>>

Joint Press Release: Dirty PR Exposed In Whale Oil Defamation Trial

Three public health advocates are relieved that their long-standing Whale Oil defamation trial against Cameron Slater, Carrick Graham, Katherine Rich and the Food and Grocery Council has finally concluded and they are pleased that the truth has come out... More>>


Government: Next Stage Of COVID-19 Support For Business And Workers

The Government has confirmed details of COVID-19 support for business and workers following the increased alert levels due to a resurgence of the virus over the weekend... More>>


Government: Balanced Economic Approach Reflected In Crown Accounts

New Zealand’s economic recovery has again been reflected in the Government’s books, which are in better shape than expected.
The Crown accounts for the seven months to the end of January 2021 were better than forecast in the Half Year Economic and Fiscal Update (HYEFU)... More>>

Covid-19: Auckland Back To Alert Level Three After One New Community Case Revealed

Auckland will move to alert level three for a week at 6am tomorrow morning after two new Covid-19 community cases announced this evening could not be directly linked to earlier cases, the Prime Minister has confirmed.
The rest of the country will move to level two.... More>>

NZ Initiative: New Report Highlights How Our Housing Crisis Could Worsen If We Don’t Act Now

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative. In The Need to Build: The demographic drivers of housing demand , Research Assistant Leonard Hong ... More>>

Parliament: Kiwi MPs Among The “Most Educated In The World”

New analysis of MP qualifications reveals New Zealand’s Parliament is one of the most educated and highest qualified in the world, and significantly more educated than Australia’s. The research, by Mark Blackham of BlacklandPR and Geoffrey Miller ... More>>




InfoPages News Channels