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Now comes the hard part

Written By: - Date published: 12:14 pm, February 26th, 2009 - 25 comments
Categories: national - Tags:

I get why the government is riding so high in the polls. John Key looks confident amd relaxed albeit a little goofy sometimes but lord knows that can be a nice change after the grim sternness of Helen.  His Ministers seem pragmatic and sensible.  You can almost hear the swish swish  of 350 percale cotton brushing against skin as Cabinet rolls up its collective sleeves and gets down to manly work.

The government has also had the great fortune of not having to make the hard calls yet.

That’s about to change. Right on the eve of the much vaunted, but not quite as inclusive as one might hope, Jobs Summit, Levin’s Swazi Apparel gets the news they’re losing a $2m contract with the army. Seventy jobs are on the line.

What’s to do?

Defence Minister Wayne Mapp says it’s a complicated issue involving an Australian broker and a third party. I bet it is too and not made any easier of course by our free trade agreement with China. But if I was a one of those 70 workers and I heard John Key promise a “do-fest” not a “talk-fest”  having seen how he’s already promised to save another “iconic” company from ruin, I’d be wondering what he’s going to deliver for my job and my family.

25 comments on “Now comes the hard part ”

  1. djp 1

    The army is making the right move.. there is no point in having free trade if you dont get the benefits of comparative advantage. Yes it is a pity that some jobs are (temporarily) lost but it gives them the opportunity to transition to a field that they are better able to compete in and it gives the army the same goods at a lower cost.

    On the whole we will be more productive. What do you think the army is going to do with the money it saves? chuck it down a hole and bury it.. I am sure they will find a way to spend it and I am sure it will benefit kiwis.

  2. On the one hand the Army will tell you it likes to defend freedom and democracy, but on the other hand its happy to support the Chinese regime by propping up its economy.

  3. Tane 3

    djp – comparative advantage makes sense if you’re, say, debating whether to grow sugar in Cuba or in Sweden. Or whether to farm sheep in New Zealand or the Congo.

    China doesn’t make clothes better, or more productively. Its comparative advantage is to shirk on its labour and environmental standards, something I don’t think should be rewarded. Slap a tariff on the buggers until they get themselves up to standard, and in the meanwhile let’s keep the people of Levin in jobs.

    • RedLogix 3.1

      China doesn’t make clothes better, or more productively. Its comparative advantage is to shirk on its labour and environmental standards,

      Worse still, poor labour, health and safety and environmental laws do not operate in isolation. Inevitably a production facility that has exploited, over-worked labourers, poor housekeeping, lax safety standards, and poor environmental practises will find that it cannot produce quality goods either.

      It is no accident that so much of what is produced in China is weak, crappy junk. It is made in factories with weak, crappy standards.

  4. djp 4

    I suppose you have never bought anything made in China leftrightout?

    Anyhow it is *people* not governments that most of us trade with. Chinese people need to put dinner on the table too.

  5. djp 5

    Tane – sure you could do that, we as consumers would pay more for less and some poor Chinese would become unemployed.

    win win right?

  6. Tane 6

    We’d pay a fair price, the people of Levin would have jobs, and China would keep doing its thing as it was before. There are values that exist outside of the market, you know.

    Just wondering, how would you react if a factory set up nextdoor to yours, produced the same thing less efficiently, but was able to undercut you through a special exemption from labour laws, environmental standards and the RMA? Would you simply dismiss that as ‘comparative advantage’ and quietly watch your business go down the gurgler? No, I thought not.

    • djp 6.1

      “fair” is a value judgement.

      The army seem to think it is “fair”ly good to make a savings on their procurement.

      The Chinese worker seems to think it is a more “fair” deal to trade his labour for making raincoats over the other opportunities he might have.

      You seem to want to force everyone else to submit to your own version of “fair”.

      Just wondering, how would you react if a factory set up nextdoor to yours, produced the same thing less efficiently, but was able to undercut you through a special exemption from labour laws, environmental standards and the RMA? Would you simply dismiss that as ‘comparative advantage’ and quietly watch your business go down the gurgler? No, I thought not.

      I would rail against the govt for playing favourites,

  7. djp,

    I feel for the Chinese. Some 30 million lost their jobs in the last six months but it doesn’t make sense to export jobs when we need to feed our own to help the Chinese.

    The members of the Chinese government has made billions over the backs of their own people while they were paid slave wages.

    The Chinese need to sort out the Chinese and judging by the fact that their leaders are going on a course on how to disperse unrest (other than by brute force as was sufficient until now) I put it to you that they know they’ve got it coming to them.

    Of course this is also something you don’t here about in the News papers here. Hell, it might give us ideas

  8. “I suppose you have never bought anything made in China leftrightout?”

    Of course I have, sometimes you have no choice, but where I have the choice I’ll buy NZ made. The only people who benefit from made in China are company owners/shareholders and the Chinese bureaucracy. When was the last time you saw a company move to China and then pass over those cost savings to consumers? Do you think that fisher and paykel will now be selling their appliances at half the price they normally are?

    Personally if I was a soldier and my life depended on good gear (as many soldiers lives do) I wouldn’t put my faith in Chinese made goods.

    • djp 8.1

      Of course you have a choice of whether to buy goods made in China, did someone hold a gun to your head? No, you decided that by making the trade you are better off…. it is hypocritical

  9. Tigger 9

    Why is Mapp worried? Isn’t his party and ACT obsessed with letting the market decide? Well guys, the market just decided to send a bunch of jobs to China. Mapp should just shut up and tow the right-wing line and leave the worrying about jobs to those of us who actually care.

    • Chess Player 9.1


      Correct me if I’m wrong, but wasn’t the free trade deal with China negotiated and signed by the last left-wing Government?

      • burt 9.1.1

        It was all good when it just seen as cheaper goods in the Warehouse and more markets to sell our stuff in…. Who would have guessed this would happen….. Doooh – it didn’ – saved by intervention. How is that going to look for free trade…. Oh dear.

  10. Tane 10

    djp – yes, ‘fair’ is a value judgement. We don’t allow children to be forced into working down coal mines, we don’t allow employers to pay people below minimum wage, and we don’t allow factories to pump toxic waste straight into our waterways. I’m surprised you have such disdain for the concept.

  11. BLiP 11

    What a pity the “market” doesn’t take into account the consequences of the tonnes of extra carbon emitted into the atmosphere as the Army’s goods are transported here – and who picks up the bill for the dole payed to the Levin workers put on the scrap heap – and the children of the workers, who’s going to pay their school fees? These “off the ledger” costs are real, but are paid by society, not business. Thanks NZ Army (Inc.)

  12. Felix. There’s been some controversy among the writers about the new ‘reply’ feature but I think you’ve just justified it beautifully.

    • lprent 12.1

      Yeah. It was somehow the default after the upgrade. New feature of wordpress. I was unsure if to leave it on on not because you can no longer just look at the end of the list. I left it on as an experiment.

      It will probably wind up close to comments at the tail (as it has in public address). But it does seem to being used and so far there is little moaning.

      I’ll look at it after i finish moving this weekend.

  13. Pascal's bookie 13

    Anyone watch Davey Hughes from Swazi on Campbell after the Key interview?

    Ouch. Whatever you think of the points he was making from a policy perspective, in terms of punchy rhetoric he was like the Batman on P.

    Pow! Wham!! Thwack!!! but all delivered in a calm, reasonable, unflustered manner that comes across as unadulterated obvious truth. I bet fuck all people that watched him came away thinking anything other than ‘yeah’.

    “I think if we’re gonna have a look at our international obligations that’s great, but first and foremost our obligations are to the people of New Zealand; that’s what I believe a government should be looking at. Y’know if we’re going to have these free trade agreements and people are saying y’know, ‘we can’t protect some jobs’ or ‘we can’t protect some industries here in New Zealand’, why don’t we actually go and ask our free trade Partners how they feel about it you know? How do these guys feel about the New Zealand Defence still making some of their garments here in New Zealand… Why don’t we go and ask?

    …we’re not just exporting jobs when we lose these contracts, we’re actually exporting a lot of fantastic kiwi innovation, that’s gone and it won’t come back, and when we lose the expertise here, from these people that manufacture these products, that’s gone, and that won’t come back.

    Not everyone can be a farmer. Not everyone can be a computer programmer, and not everyone can be a brain surgeon; so some people leave school and have to work with their hands. It’s not just manual labour, it’s a craft. These people learn a craft and they have a huge amount of pride in the work that they do. The same pride that we all have in our jobs; and what we are turning around and saying is ‘you guys are just numbers, you guys are just statistics’. These guys didn’t vote in a new government, y’know, to be suddenly slammed dunked with this. They voted in a government for change.

    …if there’s one thing I’d like to see at this job summit, it’d be a change of mindset, a change of attitude, let’s start protecting New Zealand jobs. Kia Kaha. Let’s put New Zealand first.

    He starts at about the 6 minute mark.

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