Bank-paid economists are predicting the Reserve Bank will again raise benchmark interest rates on Thursday. This may be good for the banks and the currency markets but it is bad news for New Zealand farming exporters and for high-end manufacturing jobs. Our interest rates are among the highest in a world awash with money after quantitative easing in Europe and the US. The CTU has called for a pause, and listed manufacturing jobs lost in the past couple of years because of the exchange rate.
The list of jobs lost where the exchange rate was quoted as a significant factor is here
• 17 July 2014, 36 job losses proposed at Auckland high tech manufacturer, Buckley Systems, citing the exchange rate.
• 19 May 2014, Fitzroy Engineering in Taranaki lays off 28 staff saying the “strong New Zealand dollar” was a factor along with competition for work in Australia. Managing Director Richard Ellis said he’d seen little evidence that Taranaki or the rest of New Zealand had a “rockstar economy”.
• 24 April 2014, Dunedin sawmiller Southern Cross Forest Products announces it is to shed 79 jobs with the closure of its mill in Rosebank, Balclutha, and cuts at other South Island operations. Log prices are a factor.
• 12 April 2012, Christchurch Yarns in receivership, 85 workers expected to be made redundant, resulting from a downturn in orders, particularly in Australia, and the high New Zealand dollar.
• 16 January 2014, New Plymouth-based Fitzroy Yachts, which employs around 120 people, announces it will close its doors. Executive director of the NZ Marine Industry Association Peter Busfield said the high dollar was biting boat builders and other exporters.
• 31 December 2013, SCA Hygiene Australasia finally closes its tissue manufacturing line at its Te Rapa plant having been winding it down over the previous four months, with 140 employees made redundant. A subsidiary of Swedish business Svenska Cellulosa, the company’s Australasian president Peter Diplaris said the decision came down to a challenging market environment and pressure from imports.
• 13 November 2013, 30 staff at Metso New Zealand in Matamata are made redundant after a head office decision in Finland to move more manufacturing to India. The Matamata operation specialised in vertical shaft impact rock crushing equipment and related services for mining and construction. In the past five years staff numbers had been chopped from 133 to 30.
• 19 October 2013, major Rotorua employer Tachikawa Forest Products is placed into receivership, jeopardising 120 jobs. Robert Reid, General Secretary of the FIRST Union which represents two-thirds of the workers says “This receivership comes on top of a continuing contraction of wood processing firms and jobs in New Zealand. The high New Zealand dollar, the high price of logs and the lacking government procurement strategy around both the Canterbury rebuild and government house building programmes see the continuation of raw logs being exported across our wharves while workers lose their jobs in the sector.”
• 23 August 2013, Air New Zealand announces it will axe 180 jobs. Engineering, Printing and Manufacturing Union (EPMU) assistant director of organising Strachan Crang says the airline’s engineers had worked hard to remain productive. However, unless the dollar fell under US70c it would be impossible to remain competitive against cheaper Asian engineering facilities. ”Over the past three years they’ve delivered productivity gains in the double figures but this has all been eaten away by the high value of the New Zealand dollar”.
The CTU is calling for the Reserve Bank to have a wider range of objectives in its mandate. This is also Labour Party policy.