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Labour’s pro Kiwi Manufacturing Policy

Written By: - Date published: 12:40 pm, April 17th, 2014 - 76 comments
Categories: david cunliffe, election 2014, labour - Tags:

LEC CUnliffe January 27 2014 speech-4

The following is a speech that David Cunliffe has delivered today concerning Labour’s Manufacturing Policy.

“Today I am announcing Labour’s Manufacturing Economic Upgrade.

It’s part of Labour’s strategy to shift an economy that’s merely idling into a higher gear.

To an economy that can support skilled, well paid jobs across the whole country.

We need New Zealanders to be able to know that their kids will be able to grow up near them, to find work, to afford homes, and to raise their children.

Put simply, we need an economy that works for all New Zealanders. Right now that’s not what we’ve got.

In the run up to the Budget it’s tempting to create a fetish about fiscal surpluses. The risk is you lose touch with the real economy.

That’s the economy where Kiwis have jobs and incomes, run businesses, borrow money, and bring up their families. It’s the economy we live in.

That real economy needs both competent economic management and visionary economic leadership.

Managing an economy is about maintaining sound practices in fiscal, monetary and regulatory policy.

Managing is important in its own right – we know this – we delivered nine out of nine fiscal surpluses and reduced sovereign debt to zero last time we were in government.

We didn’t listen to our opponents who wanted high-end tax cuts instead of reducing debt.

We also created the fiscal buffer that enabled New Zealand to make it through the GFC.

So we know how to manage but, unlike the current government, we also know how to lead.

Leading an economy is about clear thinking and decisive action.

Some people like to trot out the analogy of New Zealand as a tiny boat adrift in the turbulent seas.

They say we have no alternative but to passively ride the cycle of global commodity prices.

They say that keeping the ship on an even keel is the best we can hope for.

It’s the ‘Thor Heyerdahl’ approach to economic strategy. It creates a ‘Kontiki economy’ that drifts with the current, without a rudder or an engine.

We reject this entirely.

Sure, a commodity price ‘wave’ is an opportunity to be exploited. But as the 20% drop in dairy prices in the last two months shows, relying on these waves is no substitute for building a powerful engine.

Labour in government will return to active leadership of the economy – to governing with a long-term vision, a clear strategy and a shared sense of direction.

It doesn’t assume all wisdom comes from government. To the contrary, we believe in unlocking the energy of businesses and communities.

Building a shared sense of purpose and direction will both reduce risk and accelerate progress.

We want to get all New Zealanders focused, not on riding waves, but on building a better, stronger, smarter engine.

Manufacturing is and must be a core part of New Zealand’s economic engine. But it is facing serious problems.

For now there is some optimism among construction-based manufacturers, driven by the Christchurch rebuild. And among some manufacturers being supported by high dairy and meat products. But the overall view is much less reassuring.

Eventually the commodity prices will drop, and the rebuild cheques will dry up.

What happens then?

With the current settings, we’re in trouble, because New Zealand manufacturing is in longterm decline.

The facts speak for themselves:

  • Since 2008, manufactured exports have fallen by 19% in real terms,
  • Since 2008, there has been a net loss of 1,700 manufacturing firms in New Zealand,
  • And since 2008, manufacturing employment has fallen by more than 42,000.

And how many firms have either closed or suffered severe retrenchment in recent years?

  • Huhtamaki packaging in Auckland lost 135 jobs,
  • Sleepyhead beds dropped 132 jobs in Auckland and Canterbury,
  • Criterion in Auckland – 180 jobs,
  • SCA Hygiene in Waikato – 140 jobs,
  • Hillside in Dunedin – 90 jobs,
  • Sealed Air in Bay of Plenty – 112,
  • Tait, Christchurch – 74,
  • Fitzroy yachts, Taranaki – 120,
  • Huttons, Hamilton – 125,
  • And another 125 from Cerebos in East Tamaki.
  • And just last week we found out about 85 more jobs gone at Christchurch Yarns.

These are just a few of the closures. Nearly every day there are manufacturers who are having to make the tough decision to cut a line, shorten a shift, let another one or two skilled workers go. Because there’s just no support.

That’s hundreds of Kiwis who have had their lives turned upside down – many of them will have found no other job, some will have lost their homes, their marriage, left New Zealand and taken their skills with them.

And beyond the personal hardship that these numbers signify is the loss of muscle in an economy which sorely needs it and the loss of brain-power that could have created new and better products. It’s lose, lose, lose.

But manufacturing in New Zealand has huge potential.

We have a sound pedigree with companies like Fisher & Paykel Healthcare, Glidepath and Hamilton Jet.

We have a tech-savvy workforce skilled in engineering and design.

Even so, there are those who ask whether manufacturing really matters, when our primary industries are going great guns.

Truth is, the manufacturing mindset creates value along the whole of the value chain.

They drive the uptake of new technologies and invest heavily in R&D.

Manufacturing companies are also services companies in design, sales, marketing and distribution. The most successful manufacturers get an increasing share of their profits from this bundling of products and services.

And manufacturing drives the creation of jobs.

One job in manufacturing creates between 2 and 5 jobs in the wider economy.

Good jobs – skilled, well-paid and stable jobs.

But through neglect we’re losing the ability to create the kind of elaborately-transformed products that are the backbone of advanced economies and to bundle them with high-value services.

We need to change that. Which is why today, I am announcing our Manufacturing Economic Upgrade.

It’s got three parts.

  • Investment
  • Innovation
  • Industry

Changing the Investment Environment

First, Labour will adopt macroeconomic settings that are supportive of manufacturing and exporting.

There is no doubt that the NZ dollar is over-valued. Just this month, the IMF put the figure of between five and 15 percent.

We will make changes to monetary policy to broaden the range of tools available to the Reserve Bank to achieve a more competitive and less volatile exchange rate. My finance spokersperson David Parker will be announcing more detail of this very soon.

We will use a capital gains tax to shift dollars from property speculation to productive investment.

And I am pleased to announce that Labour will introduce accelerated depreciation to reward investment in plant and equipment.

This will start with advanced manufacturing, which delivers the greatest spill-over benefits to the rest of the economy.

It will cost $30 million in the first year. We envisage extending it to all manufacturers over time.

We will not ‘pick winners’ at the individual firm level.

Our aim is to influence investment policy overall. To change the culture of investment in New Zealand so that firms, entrepreneurs, researchers and investors feel confident in developing world-beating ideas here.

A number of other policies will dovetail into these measures.

  • We’ll grow domestic savings so more capital is available for investment in the manufacturing sector. Our expanded universal KiwiSaver and reinvestment in the NZ Super Fund will build on proven success.
  • We’ll encourage foreign direct investment in manufacturing, with clear rules that benefit New Zealand by favouring transfer of technologies, by developing new channels to market, and by employing Kiwis.
  • We’ll simplify capital markets and, while respecting labour, environmental and quality assurance standards, we’ll reduce unnecessary compliance costs so New Zealand companies, in particular SMEs and entrepreneurs, can raise capital more easily.
  • We will lower structural costs to businesses, starting with electricity prices.
  • These policies will drive investment in manufacturing in New Zealand.

Resparking Innovation

Investment needs to drive innovation. We’ll respark New Zealand’s innovation system.

Innovation and manufacturing go together. Manufacturing is the biggest investor in research and innovation in modern economies.

In manufacturing, each new order is an opportunity to innovate, to customise, to add services to products and control more of the value chain.

That drives productivity improvement, innovations in work organisation and the application of technology, ahead of any other sector.

What’s more, small innovative manufacturers tend to create an eco-system around them of specialised suppliers, designers, and distributors. It’s how they achieve scale without needing to become vertically integrated.

As a result, the R&D and productivity advantages in manufacturing spill over into the wider economy.

Just yesterday the New Zealand Productivity Commission concluded that we are falling behind the rest of the world and that R&D is a big part of that problem.

The Productivity Commission found that our GDP per capita lags 27% behind the OECD average. We get a staggering 40% less GDP per hour worked than the average developed nation. We’re working harder and getting less for it.

The Productivity Commission laid a large portion of the blame for that on our underinvestment in innovation. It found that if we’d invested properly in R&D, the income gap would be a third smaller than it is today.

For too long, we have chosen volume over value – the easy route of producing more raw commodities. Because we haven’t invested enough in innovation we’re missing out on reaping the rewards that come from having high value goods to export to the world.

That adds up to fewer jobs, lower wages, less money for the government to invest in public services and infrastructure.

So one of the first things Labour will do in government is to reintroduce a Research and Development tax credit at the rate of 12.5%. This is vital.

Alongside that we will better integrate manufacturing R&D requirements with research-based institutions.

And we will support manufacturers to meet skill shortages, with improving apprenticeship training, and support for better management of skilled workforces.

Industry Development

The third part of the policy is unashamedly pro-Kiwi industry and Kiwi communities.

It’s possible to be so obsessed with level playing fields that you forget to cheer for your own team.

Labour will unashamedly back New Zealand manufacturing.

That’s why we have committed to a national procurement policy that favours Kiwi-made, so New Zealand manufacturers enjoy the same advantages as their international competitors.

Today I am announcing we will adopt a target of keeping another $200 million a year at home, rather than sending that work overseas.

This measure alone will create around 2,000 jobs.

Australia, Canada and the United States have all enacted similar policies – it just makes sense.

It will, of course, be done in a way that is WTO-compliant.

We will also give manufacturers a stronger voice in trade negotiations, and make it a priority for negotiating teams to keep the sector informed.

New Zealand manufacturers have legitimate concerns that New Zealand’s trade agenda is too dominated by opening markets for commodities.

That exposes us to the risk that FTAs allow into NZ overseas-made products that are below NZ standards.

It’s also too easy for the interests of regional economies to be sidelined in the event of major closures. These can end up becoming a gladiatorial contest between receivers, unions and creditors.

Experience shows that, with quick action on the part of local government, businesses, and unions, the failure of one business need not mean a complete loss of skills and employment to the region.

Such events can be turned into useful catalysts for finding new opportunities and unleashing initiative and drive.

But that requires a rapid response in terms of establish taskforces and given them the necessary mandate. Labour in government will ensure that regions have the resources to do that quickly and effectively.

We recognise that different regions have strengths that map to specific industry sectors. In Rotorua it is forestry and tourism. In Nelson it’s horticulture, viticulture and fisheries. In Auckland, manufacturing is crucial.

Labour will back our regions to excel in what they do best.

Conclusion

Nearly all companies have to make the crucial decision whether to be low-cost operators or differentiators.

The choice between low margin high volume production typically requiring low skilled workers with similar low wages, or focusing on developing high value products with strong margins that require skilled, well paid, workers.

It will come as no surprise to you that Labour believes New Zealand will be best served if our economy, on the whole, is tilted to high-value strategies.

To get there it’s not enough to simply manage the status quo – to mind the shop.

We need leadership. We need a government that employs good governance, and that doesn’t settle for drifting on the currents of commodity price cycles.

We need a deliberate strategy to build a state-of-the-art, high-spec engine for New Zealand’s economy.

The kind of manufacturing New Zealand needs to bring value, skilled jobs, and decent wages into our economy is struggling because we are not seeing this kind of political leadership.

That’s a lost opportunity now and for our future.

But we will turn it around through shared leadership, clear thinking and decisive action. We have to if we are to improve New Zealand’s economy and the lives of our people.

It’s my vision and it’s Labour’s vision.

Making it real is a task Labour is ready to embrace.

Update:  A short video from David

76 comments on “Labour’s pro Kiwi Manufacturing Policy”

  1. Macro 1

    Sorry – but unless there is active protection from cheaper overseas imports it won’t work.
    All good sounding stuff – but built on the false hope that free trade = fair trade.
    We need to cast off the shackles of being good WTO “citizens” and get back to doing what is best for NZ, not multinationals.

    • srylands 1.1

      So you are suggesting we withdraw from the WTO? We could join a very illustrious group of non-members.

      • Macro 1.1.1

        Like Australia…
        And the USA…
        and.. oh any nation you can point a stick at has regulatory controls to protect industries they consider essential – only NOT NZ – extraordinary isn’t it!

    • srylands 1.2

      “Sorry – but unless there is active protection from cheaper overseas imports it won’t work.”

      A question Mr Macro:

      When you buy goods (shoes, books, software, hiking boots, tablets, car parts, boating gear) do you

      (a) walk into the local high street store and buy whatever is on offer at inflated prices, or

      (b) trawl the interweb, importing your gear directly from the USA and Singapore, at half the cost, and in small batches to avoid GST?

      If it is (a) you are a fool.

      If it is (b) you are a hypocrite.

      So which are you?

      • McFlock 1.2.1

        lol

        According to neolibs, whatever the market will bear is a fair price, right up until someone decides to support local producers. Then all of a sudden the same market price is “inflated”.

      • Lanthanide 1.2.2

        c) Buy from the Warehouse at prices between a and b, but towards b.

      • Tracey 1.2.3

        its interesting to see what your shopping list looks like slylands…

        most kiwis are justing trying to pay rent, power, water, food, transport, clothes for their kids and the occassional lotto ticket in the hope they can get a brighter future, rather than living in hope that the currency trader and his career bureaucrat will ever deliver a better life.

      • Macro 1.2.4

        I buy what goods I need at the local farmers market. Yes there is a place for markets – but not the ones you hold dear.

      • Macro 1.2.5

        If I need shoes – I try to by NZ made – but they are becoming very hard to get.
        How many tablets do I need? The ones supplied by the pharmacies are brought by that wonderful organisation Pharmac so I usually go with those.. Oh you mean those thingies people use to stick plugs in their ears? Never had one and don’t see a need for.
        We have a wonderful library here – you should try visiting one someday. And 3 secondhand book shops keep me well supplied. But its getting more difficult to get a book published and PRINTED in NZ.
        My three cars and vintage motorbike (1957 BMW R50) I repair and have a lathe. It is impossible to buy NZ made parts for these now – although there used to be a tyre industry in NZ, and car parts as well. But all that went when we began exporting our jobs overseas in exchange for a few cheap imports. Very shortsighted and that is what I’m on about, but you would rather have a few cheap imports rather than spreading the wealth and fostering a more vibrant economy. Figures!
        Boating? I’m fortunate enough to have a few mates with boats. Two made their own from local materials and the fishing is only 20 mins away and very good thank you. But I’m keeping that a secret.

  2. Skinny 2

    Key-National and their half baked snake oil salesman and soon to be leader Stephen Joyce should never have scrapped Labour’s R & D tax credit.

    For this reason it is little wonder manufacturing exports have dropped 7% in the last year.

  3. Disraeli Gladstone 3

    Why is this being announced today? At the end of a news-filled week which is now turning into the Easter Weekend.

    Something this important should have had a better timing slot.

    • Lanthanide 3.1

      So people from the cities, going home to their families in the provinces have something to talk about?

      • Melb 3.1.1

        They’re more likely to be talking about how the people holding them up weren’t trucks in the fast lane.

    • Naki Man 3.2

      Disraeli Gladston

      “Something this important should have had a better timing slot”

      I couldn’t agree more, that is one example of why these clowns are at 28% in the polls and dropping.
      Someone as smart as you should vote for National

    • fisiani 3.3

      Usual communications stuff up. Typical of Labour. Or perhaps best to hide such impractical policies under the umbrella of Easter.

  4. Chooky 4

    David Cunliffe and the Labour Party strategy for stimulating manufacturing and especially technology industries got a good plug on National Radio mid-day news

    imo….David Cunliffe’s Labour is beginning to pull away by a nose….we know we have good horse here but now it is beginning to look like a real racer

    Keep up the good work David Cunliffe and Labour!….keep hammering this one…but in simplified form so the general public can see it is the best entrepreneurial Business Party for all NZers!

    ( not the rorter of the environment and seller off of State Public Owned Assets that John Key and NACT is…which is for big business mates that extort the public purse)

    • Saarbo 4.1

      Yep, spot on Chooky. This is the sort of announcement that provides us Labourites with real solid back up to argue against vacuous greedy useless National supporters…this is great stuff.

  5. George 5

    Good policy. Hard for National to work around too.

    • srylands 5.1

      I assume that is a joke. The stated policy to devalue the NZD by as yet unclear macro policies is the equivalent of a large pay cut for workers. What would happen if the Government announced a legislated 10% cut in all wages? But because the Left’s constituents can’t join the dots, they sleep walk into the horror of such a policy. Meanwhile, they worry about who owns an electricity company (a non issue).

      • McFlock 5.1.1

        Exports including tourism revenue up by 10%.

        Greater competitiveness of local producers stimulating employment.

        Less profits for overseas owners of NZ assets.

        Yeah, pretty obvious why you don’t like the idea, auSSpylands.

      • Murray Olsen 5.1.2

        SSlands – if it really were a 10% cut in wages, you’d say it was a promising beginning. What’s your real reason? Do you work in importing?

      • David H 5.1.3

        The only joke is the shite you come out with, Sorryman.

  6. Stuart Munro 6

    A promising speech, and a focus on a series of substantial issues, though a speech of course is not delivery.

    It certainly beats currency speculation as an economic strategy.

  7. Srylands is not a casual visitor to this blog.
    His interest is not that of an ordinary person.

    • Tracey 7.1

      the quote on your website explains why NACT ans slylands want the ele tricity companies out of public ownership

      Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” Justice Brandeis

      • Melb 7.1.1

        “want the ele tricity companies out of public ownership”

        What garbage are you talking about? Being publicly listed means the companies have to be more transparent than they were under sole government ownership.

        • Draco T Bastard 7.1.1.1

          Wrong. With them being in public ownership we also get to tell them what to do. Don’t get that option when they’re privately owned.

    • McFlock 7.2

      SSpylands is one of the few people who genuinely give me the impression that they have spent 20 or 30 years following a vocation that makes NZ worse for most of its citizens.

      • Tracey 7.2.1

        hooton always gives me that impression, as does anyone who makes a living out of deliberately hiding and manipulating the truth

        • McFlock 7.2.1.1

          well, yeah, but I also get the impression that hooten would lie for anyone if they paid him enough.

          Similarly folk like max bradford have wandered in and out of being outright destructive for $$. Sspylands, on the other hand, seems to be a true believer.

      • srylands 7.2.2

        No it is actually quite the reverse. I am interested in policies that make New Zealand more prosperous. It is the poor who I am interested in. I find you offensive. Both of you.

        An example – Removing absurdly high border protection on childrens clothing and footwear helped low income families in the 80s and 90s – immensely. I could run through dozens of other policy settings that benefit average workers – all opposed by the Greens in their current or antecedent forms.

        Despite your misinformed rhetoric you promote policies that detract from personal freedom and hurt the poor. You simply lack the intelligence to work it through.

        • Draco T Bastard 7.2.2.1

          Your policies help the poor – we know this because there’s so much more of them since we started following them.

        • One Anonymous Bloke 7.2.2.2

          That’s your engorged amygdalla pushing you around, S Rylands.

          Everybody please spare a little sympathy for poor, fearful S Rylands.

          He’s wasted his good years intoning the mantras in The Holy Book of Market and now the penny is starting to drop and all the credible advice is abandoning his Temple of Greed, he’s rapidly becoming unemployable except for the odd satirical comedy, where he can be wheeled out to be laughed at.

          Oh happy day.

        • Tracey 7.2.2.3

          i havent laughed so hard all day. your faux offence is hilarious. at least i never accused you of being a drunk.

          could you post the statistics for the numbers of shoeless and footwearless children prior to the 1980’s

          you are so straight jacketted by your failed ideology which amounts to generating more and more of everything, especially money to solve everything… of course you draw the line at giving money to the poor despite the evidence supporting this because you equate poor with stupid and they just cant be trusted with money without being told how they can use it by people like you.

          you believe a new road from kapiti coast to wellington will help the poor? Its just a coincidence its the route you use to your work?

          you support policies which always promise to alleviate poverty but never really achieve it. if you are some kind of beacon for the poor they are in deeper shit than i thought.

          you relentlessly mock the greens and those us who will vote for them and your wife is a green supporter.

          your pseudo intellectuosity is surpassed only by your supreme smugness.

          • Paul 7.2.2.3.1

            Please stop wasting your time and energies engaging with such nonsense.
            That’s why they are here… to clutter up the site and divert, distract.
            They aren’t interested in genuine debate, rather they are here simply to burn up people’s time needlessly.
            Please ignore them. You have better things to do with your time.

            • McFlock 7.2.2.3.1.1

              in this case, I think it’s relevant to the post.

              SSpylands’ policies have given us a constant rate of around 170,000 unemployed and doubled the rate of child poverty since 1982, and he still insists his policies have helped and labour’s proposals will hurt people (by giving them jobs).

              We need an economy that helps people, not corporate balances. A corporation exists to loot, not create jobs. Neolibs argue that corporate bank balances create jobs, but they do not. SSpylands is one of those zealots in treasury who cannot conceive of anything other than “privatise and deregulate”. Politicians come and go, but he is a constant source of corrosion in the system, like a WINZ case worker who hates the unemployed.

              We don’t just need economic policies, we need to introduce diversity into administrative systems.

              Macroeconomic planning and analyses units in MSd and internal affairs, for example. Competing plans, rather than relying on treasury.

              • felix

                I really don’t understand why people whose stated aim is to destroy govt are allowed to work in govt.

                In no other organisation would it be tolerated.

                Time for a purge I reckon.

        • McFlock 7.2.2.4

          Despite your misinformed rhetoric you promote policies that detract from personal freedom and hurt the poor. You simply lack the intelligence to work it through.

          Even if that were true, who needs to “work it through”? We have 30 years of real-world evidence that states the closer we get to neoliberalism, the worse outcomes are for most NZers.

          Clothes are cheaper, but fewer workers have jobs. And fewer workers without jobs have state support. And child poverty is at 27%.

          Up from 14% in 1982. Same measure. Even if you quibble over extent, any bias is consistent. The poorer classes are growing, the middle classes are shrinking, and the upper classes say “let them eat cake” (a probable out-of-context slander of MA, but illustrative nonetheless).

        • thatguynz 7.2.2.5

          You absolute clown. The “border protection” (or tariffs) that you speak so derisively of may have resulted in higher prices for the locally made product as opposed to the typically inferior imported variant but your ideological blinkers have meant you’ve missed the point. The factories that manufactured said product employed local workers who in turn had money to purchase aforementioned products, not to mention the tax take to the government from the onshore manufacturing. Likewise for example, the TCO of locally manufactured rail rolling stock vs imported. I’m sure (or rather I’m hopeful) that you can use google to your advantage to figure that one out.

          For someone that purports to be highly intelligent, how do you not understand the most simple concepts? This isn’t left/right politics, it’s simple economics and business. Do try to keep up.

        • David H 7.2.2.6

          Or $$pylands follows these rules.

          Ferengi rules of acquisition

          Once you have their money … never give it back. Never pay more for an acquisition than you have to. Never allow family to stand in the way of opportunity.

          http://www.sjtrek.com/trek/rules/

      • Clemgeopin 7.2.3

        Foreign exchange currency gambler?

        • idlegus 7.2.3.1

          reminds me of a joke in one of the recent simpsons, a rich guy wants to help the poor in the community, ‘i have made a lot of money, & i want to give something back to the community, not the money of course…’ ha!

          • felix 7.2.3.1.1

            Ha, it’s a clever joke and it exposes an important truth.

            Whenever someone talks of “giving back” to their community, they should really be harangued about why they took it from their community in the first place.

  8. Tracey 8

    three I’s is better than 5-eyes.

    • Tracey 9.1

      solutionaries!

      its so simple its scarey to think people genuinely dont get it. this is why many are scared of the greens. they seriously challenge people like slylands mantra of “want want want. gimmie gimmie gimmie. more more more.”

      its through the looking glass time.

      rational is irrational
      irrational is rational.

      thanks for this draco tee bee.

  9. Draco T Bastard 10

    A number of other policies will dovetail into these measures.

    We’ll grow domestic savings so more capital is available for investment in the manufacturing sector. Our expanded universal KiwiSaver and reinvestment in the NZ Super Fund will build on proven success.

    Don’t need savings. What we need is 0% interest loans from the government. The administration of those loans paid for through taxes.

    We’ll encourage foreign direct investment in manufacturing, with clear rules that benefit New Zealand by favouring transfer of technologies, by developing new channels to market, and by employing Kiwis.

    Making NZers serfs in our own country to the new foreign owners.

    We don’t need foreign money as we have all the resources we need here in NZ. All we need is the money to be used to help direct how those resources are used and the government can, and needs to, create that money with the necessary direct and indirect taxes.

    We’ll simplify capital markets and, while respecting labour, environmental and quality assurance standards, we’ll reduce unnecessary compliance costs so New Zealand companies, in particular SMEs and entrepreneurs, can raise capital more easily.

    See above.

    We will lower structural costs to businesses, starting with electricity prices.

    So, you’re going to renationalise the power companies? Because that’s the only way that that is going to work.

    These policies will drive investment in manufacturing in New Zealand.

    No they won’t. What they’ll do is make the parasitic financial services even more of a vampire upon the rest of NZ.

    So one of the first things Labour will do in government is to reintroduce a Research and Development tax credit at the rate of 12.5%. This is vital.

    Actually, research shows that R&D tax credits don’t work. The government doing the R&D both directly and indirectly does. Siri was developed by a small firm with government funding. ARPAnet was created by government funding to government agencies.

    Really, go read The Entrepreneurial State and then start picking winners – just like the US government has done for decades and then, just like the US, we can actually be successful. The only difference needed is that when government funded research contributes to a successful private enterprise that private enterprise gets to pay royalties for the privilege.

    • Tracey 10.1

      yup. labour are not a game changer BUT a green party with 15% or more may force some change quicker than labour were prepared for, hence their seeming preference for NZF?

      if people want genuine, generational change, labour is not the place to put your tick. national lite is still national.

      • poem 10.1.1

        To reiterate. If you want the Greens in government, that David Cunliffe has already said on more than one occasion, that the Greens will most definitely be part of a Labour led government, then you need Labour to cross that line and win the election Tracey.

        • Draco T Bastard 10.1.1.1

          No, you need to vote Green. A Green led government would be far better than a Labour led one.

          • Anne 10.1.1.1.1

            But you’re not going to get a Green led government – yet. I can see it happening one day but not in the foreseeable future. When it does happen it will probably be an amalgamation of progressive left-of-centre parties who come together as a single entity.

            In the meantime compromise is the order of the day with a Labour led government which has a strong Green presence. First though, the voters have to endorse such a scenario and that is where it could unstuck if both parties don’t manage their respective campaigns with due respect for each other. I think they will.

            • felix 10.1.1.1.1.1

              But if Labour and Green can only get over the line together then it doesn’t matter – numbers wise – which you give your vote to.

              If you want more Green influence, vote Green. It’s really that simple.

            • Draco T Bastard 10.1.1.1.1.2

              But you’re not going to get a Green led government – yet.

              Well, if all the people who want a left government stopped voting Labour and voted Green then we’d get a Green led government. It’s not just Labour that are holding on to the ancient history of the party to make decisions rather than looking at the policies.

              • poem

                Agree with Ann. so if you do want to see the Greens in government THIS YEAR you will still need to get labour elected or national will get a third term. And another 3 flaming years of that reptilian economic saboteur john key who is bleeding this country dry and flogging it off to his foreign offshore interests, is a repellent and unbearable thought indeed, and it would mean by the time of the next election, there will be absolutely nothing left to fight for.

                • Draco T Bastard

                  so if you do want to see the Greens in government THIS YEAR you will still need to get labour elected or national will get a third term.

                  That means increasing the vote for both, not just Labour.

  10. Rossco 11

    NZ Manufacturing is at its highest level for years and is in fact, seeing – right now – today – the 19th consecutive monthly increase (on previous months.)
    Our NZ exports of manufactured goods alone, to (just) China have increased 45% in the past 12 months…. In 2006 it increased ZERO % – in 2007, 4%………. Today it’s 45%
    I work in an office FG Sake, and I know this stuff. How come you don’t?
    What are you people smoking?

    • Draco T Bastard 11.1

      [citation needed]

    • One Anonymous Bloke 11.2

      That’s a quite well crafted comment. Cunliffe says manufactured exports are down 19% from 2008, you respond by comparing apples and oranges and pretending that recent gains are somehow relevant to the claim.

      Still, it does raise the question: are you so stupid you think your remarks are germane to the topic, or are you simply yet another mendacious wretch?

      • greywarbler 11.2.1

        Rhetorical question OAB. How thick is Rossco ‘I work in an office fg sake, and I know this stuff.”
        Office workers are unlikely to know anything except their own little piece of work. Understanding the whole operation is not their task, understanding the whole sector is likely to also be out of their ambit, and understanding NZ’s economy and its strengths and weaknesses is far out, nearly to the moon.

        Political and economic background requires too much time away from home jobs, listening/watching the talking mouths on media, sport, drinking, playing games on the computer, looking after the car/bike etc. There is not enough time in the day for an office worker without curiosity, objectivity and a love of facts to be well informed.

    • Macro 11.3

      “Our NZ exports of manufactured goods alone, to (just) China have increased 45% in the past 12 months…. In 2006 it increased ZERO % – in 2007, 4%………. Today it’s 45%”

      and the trade agreement with china was introduced when? and by whom? and how long do you think that it takes to build up a trade relationship? and lets have a look at the imports side shall we? and where does the trade imbalance lie? and what jobs have been exported to china in the process – like wine bottles, boat building, clothing, etc?

    • An expanding manufacturing sector, according to the BNZ index, is not the same as growth which creates jobs. As the NZ Manufacturers and Exporters Association notes, employment in the manufacturing sector has been in decline for years.
      http://www.realeconomy.co.nz/377-manufacturing_employment_falls.aspx

      And it’s not just about manufacturing jobs – every job in the manufacturing sector supports 2-3 more in the wider economy.
      http://www.johnwalley.co.nz/243-is_manufacturing_important.aspx

      It’s convenient for the right to look at the manufacturing index and say ‘Look, growth, everything’s fine so what are you complaining about?’ but the reality is a bit more complex than that.

  11. Adrian 12

    Milk, wine, fish and logs are not “manufactured products ” FFS, they are processed agricultural products. They are only “manufactured” if you want to cover up the appalling gutting of our true manufacturing sector.

    • srylands 12.1

      You do realise that the trend you are “worrying” about is a good thing. It happens. It is a sign of progress. It has happened in Australia, now the richest country in the world.

      You are like the luddites. Get over it.

      “Death of manufacturing nothing to whine about”

      http://www.theage.com.au/comment/death-of-manufacturing-nothing-to-whine-about-20140415-zquwd.html

      • RedLogix 12.1.1

        Actually the article you link to conclusively demonstrates the point Adrian is making.

        The next thing that’s changed a lot since 1984 is the location of manufacturing in Australia. Then, almost 70 per cent of manufacturing employment was located in NSW and Victoria; today it’s down to 58 per cent. Then, NSW had more manufacturing workers than Victoria; today they have 29 per cent each. (Bet you didn’t know that.)
        But if the big two states now have smaller shares, which states’ shares have grown? The two we these days think of as “the mining states”. Western Australia’s share has risen to 10 per cent, while Queensland’s share has almost doubled to 21 per cent. (Bet you didn’t know that.)

        The unwritten story is there’ve been big changes in what Australia’s manufacturers produce: less stuff that relies on protection against imports and more stuff that fits with Australia’s comparative advantage.
        You see that with food products – including things such as wine-making – now being the biggest category within manufacturing, employing 20 per cent of all manufacturing workers.

        It’s an old blogging trick I learnt years ago; if you can be bothered read the links rwnj’s give, invariably they say something quite different to what they claim they do.

        Right now I am in Victoria working for a high tech equipment and services company. While we retain a very niche advantage, it’s a precarious one. We have won a good deal of business over the years on excellent value and price – but just last month a new Chinese competitor won a big job off us at around 1/3rd our price. Way less than the cost of our raw materials. Obviously no amount of slashing wages or ‘working smarter’, ‘improved productivity’, or innovation can make up for that.

        Talking to various technical reps who call on me (and these guys are a good barometer because they connected to a very wide range of tech manufacturing industry) they can never remember times as tough as they are now. Industry investment is way down, and there is a real fear of a hollowing out of the economy – exactly as they have seen it happen over in New Zealand.

        Overall there is a real sense of unease in Australia right now. Under this Abbott govt. the good times are well and truly over and the ‘lucky country’ isn’t so lucky anymore. It’s reflected in his abysmal polling.

    • RedLogix 12.2

      QFT.

  12. TightyRighty 13

    If labour used a different prefix than kiwi, it might resonate more. I know the focus groups tell them people who vote labour identify as kiwis, it’s the people labour want to swing that get turned off. Cultural kitsch is off putting. It’s one of the reasons Nz first consistently do well. It’s an identifiable name, though somewhat tainted now

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