David Cunliffe has given another excellent economic development speech. I think what’s interesting is that he’s not really proposing new policy – what he’s saying is largely in line with the platform Labour ran in on 2011, but he’s articulating the vision behind those policies – the why, rather than just the how – which was lacking from Labour in 2011. Great stuff.
Here’s my favourite part of the speech:
40,000 manufacturing jobs have been lost since 2008 when National came to government and there are more layoffs to come. Some 65,000 more New Zealanders are unemployed and that’s not counting what Bill English now calls the “safety valve” of 54,000 other New Zealanders giving up and moving permanently to Australia in the last year alone – an all-time record.
So we desperately need a high-value manufacturing strategy in this country. Gone are the days when manufacturing was just some unskilled worker bolting two parts together. That style of manufacturing is now inevitably done in low-wage countries. In most cases, we simply can’t compete with Asia when it comes to large-scale, low-cost manufacturing.
However, we’re not out of the race, by any means. According to Statistics New Zealand, there are about 22,700 manufacturing businesses in New Zealand, which together produce about $20 billion of sales. $20 billion.
I believe we could triple that, not by lowering our environmental standards or paying our workers less, but doing what we do so well.
New Zealand is very good at thinking small and thinking smart. We can do small production runs of specialist items. We can process raw materials that were gathered nearby. We can produce products on demand for our local market or international markets.
Above all, we can think smart. We can take an idea from concept to manufacture, often on a budget that wouldn’t pay for lunch in America or Germany.
Should the government be backing the manufacturing sector? Absolutely. Just look to the Scandinavian example.
Prof Göran Roos, a leading Scandinavian industrial economist, points out that every dollar in manufacturing business leads directly to $1.74 in turnover elsewhere in the economy. And he and others point out that with increasing linkage between manufacturing and high value services in global trade, you can’t win without manufacturing capability. Buy a new car, get a regular servicing package.
The Scandinavians understand that a successful manufacturing strategy provides high-value jobs, good incomes, and helps reduce our overseas debt.
Labour will work with unions and businesses to enhance skills training to help support a strong manufacturing heart. The heart of a high-performance manufacturing sector is highly-productive workplaces with excellent training and decent living wages.
Like in the Scandinavian countries, we want workers to have the training and support to adapt to changing jobs with ‘flexicurity’ throughout their lives. Flexicurity: it means ‘flexible security’.
This is important. Look at what’s happening with the West Coast coal miners. After a lifetime of hard work in the coalmines, these miners are now facing the economic scrapheap thanks to National’s plans to railroad the sale of Solid Energy. The miners must now adapt to a changing world. Can they do this overnight? Of course not.
That’s where the government can help, not with a handout, and not by lowering environmental standards or strip-mining national parks, but with an investment in the future of those workers and an investment in the future of our entire country. It’s time to recognise that our most valuable resource is not just our land, but our people.
A New Zealand where we produce more of the manufactured goods that we consume – rather than importing – and export more high value products – rather than going for mass exports of barely processed commodities. Some contrast to National’s vision of lower labour and environmental standards, selling off everything that’s not nailed down and much that is, digging up our precious places, and filling our rivers with cow shit so that a privileged few can maintain and grow their wealth.