web analytics

Polity: Labour’s manufacturing plan

Written By: - Date published: 11:37 am, April 18th, 2014 - 9 comments
Categories: david cunliffe, Economy, election 2014, employment, labour, manufacturing, Politics - Tags:

polity_square_for_lynnDavid Cunliffe has launched Labour’s policy to get more manufacturing jobs back in New Zealand:

Labour leader David Cunliffe launched the policy to an Auckland business audience this morning, adding the depreciation and procurement policies to the known suite of Labour’s approach for manufacturing, including research and development tax credits, lower power prices, a more active monetary policy to create “a more stable exchange rate” and a suite of sector-specific “Economic Upgrade” packages.

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

This is very good stuff. Having a tax break for R&D work has always been a no-brainer, and it is great to see it reconfirmed. Adding an accelerated depreciation scheme for new plant is a helpful addition. And partnering with more local firms for more locally-sourced government procurement makes perfect sense, too. Consider a toy example:

  • The government needs a $100 million widget
  • Giving a foreign firm $100 million for the widget costs the government $100 million, and gets us exactly one widget
  • But giving a New Zealand firm $100 million for the widget only costs the government around $70-75 million, once you factor in the income tax, profit tax, etc that the government receives as a result of the deal. And, even better, the government receives not only the widget, but also all the economic benefits that the the injection of $70-75 million into the economy brings. More consumer spending leads to more employment for retails workers, more disposable income leads to greater demand for trades. And so on.

Another no brainer for parties – like Labour – that actually care about local employment.

9 comments on “Polity: Labour’s manufacturing plan”

  1. RedBaronCV 1

    Loving it. Sensible and overdue.
    Now for a few pragmatic points.
    Depreciation.
    As well as an accelerated depn regime it would help business workloads immensely if the multitude of depn rates could be shrunk to just a few rates. Say about five off the top of my head. Electronic insides, mechanical insides, passive useable, passive moveable , passive fixed – let us have the discussion. Any rate over 50% really means you should expense it. And lift the capitalisation level to $5-10K from the current $500. Firms these days buy a lot of computer grear under that value with a 50% depn rate and in three years it’s obsolete. Limit the capital value of cars that businesses can depreciate to say $30000. Why ids the taxpayer paying for vanity cars.Accelerated depn rates for factory equipment onshore only.
    R & D
    R & D tax credits to be repaid if the knowledge is sold to overseas owners and no royalties/funds kept onshore. Cap on the value claimable, to favour start up type situations so large firms who do R & D to keep market position can’t claim the lot. Requirement to be a citizen too perhaps, so that people can’t be imported, do work and then the lot is lost to us.

  2. Rogue Trooper 2

    a Hot Chocolate with that business breakfast: Everyone’s A Winner Baby!

  3. Macro 3

    R and D is all very good and yes we need more of it, but there is a major flaw in Labours Policy, and it is one of their own making so they are hardly likely to see it.
    For the past 3 decades, NZ govt’s from both persuasions have pursued “free” trade at the expense of almost all else – including manufacturing, and NZ’s self sufficiency. To some extent, this has been forced upon us by the sudden loss of our traditional market UK with it’s entry into the EU, and the need to find additional markets for our meat, wool, and dairy elsewhere around the globe. So to keep our farmers happy NZ governments have been bending over backwards to curry favour with all and sundry. The lolly for the person in the street has been the promise of cheaper imports, and that has certainly been the case. But there is a massive downside, and no amount of R and D, or friendly subsidies is going to be enough to overcome it. Why? because the manufacturing base we are up against is far too big. Able to flood our small market with far cheaper goods.
    I’ve harped on about wine bottles before – but it is an excellent example of why R and D and other mechanisms are just not enough. NZ until 2 years ago manufactured all its own wine bottles – we had a niche glass industry and demand from a well respected wine industry. Enter the Chinese, “we can supply you with far cheaper bottles” – so where does the order go? R and D would not help but an import quota, or trade tariff would. But we are now ham strung with a Free Trade agreement. The wine bottle manufacturing industry has effectively been exported to China. And there are other examples as well, boat building is one I personally know of also.
    Labour got us into this mess – I do not see their Policies getting us out of it.

    • Draco T Bastard 3.1

      To some extent, this has been forced upon us by the sudden loss of our traditional market UK with it’s entry into the EU, and the need to find additional markets for our meat, wool, and dairy elsewhere around the globe.

      We only need those markets if we’re not self-sufficient and we can be but not if we keep telling ourselves that we need to export more.

      Enter the Chinese, “we can supply you with far cheaper bottles” – so where does the order go? R and D would not help but an import quota, or trade tariff would.

      As much as I think we need to bring back tariffs in that case R&D could have helped. Building a completely automated system from mining the sand to delivery of the bottles would have had it so that even the Chinese couldn’t have competed.

      Of course, I don’t think that the economy is about producing jobs but about supporting people in a reasonable living standard without jobs and for it to be sustainable. Neither of which our oresent economic paradigm can do.

      But we are now ham strung with a Free Trade agreement. The wine bottle manufacturing industry has effectively been exported to China. And there are other examples as well, boat building is one I personally know of also.

      Yep, so much damage done by such short sighted stupidity.

  4. Draco T Bastard 4

    Having a tax break for R&D work has always been a no-brainer, and it is great to see it reconfirmed.

    Actually, R&D tax credits are a load of bollocks:

    There are many counter examples that would characterize the State as far from an ‘entrepreneurial’ force. Developing new technologies and supporting new industries is not the only important role of the State, after all. But admitting the instances where it has played an entrepreneurial role will help inform policies, which are too often based on the assumption that at most the State’s role is to correct market failures or facilitate innovation for the ‘dynamic’ private sector. The assumptions that all the State has to do is ‘nudge’ the private sector in the right direction; that tax credits will work because business is eager to invest in innovation; that removing obstacles and regulations is necessary; that small firms – simply due to their size – are more flexible and entrepreneurial and should be given direct and indirect support; that the core problem in Europe is simply one of ‘commercialisation’ – are all myths. They are myths about where entrepreneurship and innovation has come from. They have prevented policies from being as effective as they could be in stimulating the kinds of innovation that businesses would not have attempted on their own.

    The Entrepreneurial State by Mariana Mazzucato
    My bold.

    She later describes most R&D tax credits as nothing more than a government bonus to the private sector. One or two have worked but they were very well designed and had massive oversight.

    Almost all of the innovation that has come about over the last few decades has had direct government funding and, more often than not, been directly done by governments. The capitalists are too damn scared to take on the multi-decadal investment that produced goods like the computers that you’re using now.

    The search algorithm that Google uses? Produced by a government funded public university.
    Apples Siri? Produced by a small firm with direct government funding.

    It’s not the private sector that produces innovation but they do have a habit of turning up at the right time and grabbing (stealing) the windfall profits that the governments investment produced. And then they hide those profits in tax havens so that they can avoid paying the taxes that they owe.

    • Stuart Munro 4.1

      Dead right.

      Look at aquaculture – the whole mussel farm system is the result of DSIR work about forty years ago.

      Or kiwifruit – Hayward was a government employee.

      It’s not businesses that offer a better approach than government, but communities. When NZ communities choose to wake up and build something better than this neo-liberal wasteland, NZ will flourish. And like Lange with the nuclear issue, the politicians will jump in late and claim the credit. Which we don’t mind at all if they will just stop screwing up. The current government has unemployment over 6% and underemployment at epic levels and they think they’re succeeding? Guess they don’t have any kids.

      • dave 4.1.1

        key and co will just denie
        there is a problem in there world there is no problem the problem is the poor and that is a crime on planet key!

    • millsy 4.2

      Agreed.

      We are better off directly funding our R and D through the CRI’s and universities/polytechnics.

Links to post

Recent Comments

Recent Posts

  • Justice Minister represents New Zealand at Berlin nuclear disarmament summit
    Justice Minister Andrew Little will travel to Berlin tomorrow to represent New Zealand at a high-level summit on nuclear disarmament. This year, the Nuclear Non-Proliferation Treaty (NPT) celebrates 50 years since it entered into force. “New Zealand’s proud record and leadership on nuclear disarmament is unwavering, so it’s important we are present ...
    BeehiveBy beehive.govt.nz
    17 hours ago
  • Prime Minister to visit Fiji and Australia
    Prime Minister Jacinda Ardern will visit two of New Zealand’s most important Pacific partners, Fiji and Australia, next week. The visit to Fiji will be the first by a New Zealand Prime Minister in four years and comes during the 50th anniversary of Fijian independence and diplomatic relations between our ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Next steps in Criminal Cases Review Commission announced
    Justice Minister Andrew Little and New Zealand First MP Darroch Ball, have today announced the appointment of the Chief Commissioner of the Criminal Cases Review Commission (CCRC), the location, and the membership of the Establishment Advisory Group. Colin Carruthers QC has been appointed Chief Commissioner of the CCRC for an ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Horticultural Ahuwhenua Trophy finalists announced
    Māori Development Minister Hon Nanaia Mahuta and Agriculture Minister Hon Damien O’Connor co-announced the first horticultural finalists for the Ahuwhenua Trophy celebrating excellence in the Māori agricultural sector.  The three finalists are Ngai Tukairangi Trust from Mt Maunganui, Otama Marere Trust from Tauranga, and Hineora Orchard Te Kaha 15B Ahuwhenua ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New support for students with dyslexia
    A new kete of resources to strengthen support for students with dyslexia will provide extra tools for the new Learning Support Coordinators (LSCs) as they start in schools, Associate Education Minister Tracey Martin announced today. The Minister launched the kete in Wellington this morning, at the first of three induction ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Rental reforms progress to select committee stage
    The Government continues to make progress on a fairer and more secure rental market for renters and landlords with the First Reading of the Residential Tenancies Amendment Bill and its referral to the Social Services and Community Select Committee.  “Now is the opportunity for landlords, tenants and others who want ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Papua New Guinea Prime Minister to visit New Zealand
    Papua New Guinea’s Prime Minister Hon James Marape will visit New Zealand from 21-25 February, Prime Minister Jacinda Ardern announced today. “New Zealand and Papua New Guinea have a warm and friendly relationship. I look forward to welcoming Prime Minister Marape here and strengthening the relationship between our two countries,” ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Free school lunches served up to thousands
    Thousands of children have begun receiving a free lunch on every day of the school week, Prime Minister Jacinda Ardern said. The Government’s free and healthy school lunch programme is under way for 7,000 students at 31 schools in Hawke’s Bay / Tairāwhiti and Bay of Plenty / Waiariki, extending ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Social Wellbeing Agency replaces Social Investment Agency with new approach
    The Minister for Social Development Carmel Sepuloni today announced a new approach that continues to broaden the Government’s social sector focus from a narrow, investment approach to one centred on people and wellbeing. Minister Sepuloni said redefining the previous approach to social investment by combining science, data and lived experience ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government to strengthen protections for whistleblowers
    The Government is strengthening the Protected Disclosures Act to provide better protection for whistle blowers, Minister of State Services Chris Hipkins said today. “The Protected Disclosures Act is meant to encourage people to speak up about serious wrongdoing in the workplace and protect them from losing their jobs or being ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • PM speech at Parliamentary Chinese New Year celebration 2020
    Nǐn hǎo (Hello in Mandarin). Xīn Nián Kuài Lè (Happy New Year in Mandarin) Néi Hóu (Hello in Cantonese). Sun Nin Fai Lok (Happy New Year in Cantonese) Tēnā koutou, tēnā koutou, tēnā koutou katoa. Thank you for your invitation to attend this celebration today. I would like to acknowledge ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • IPANZ Annual Address
    Kia ora. Ngā mihi nui ki a koutou katoa. Nau mai haere mai ki te Whare Pāremata. E ngā mana whenua ki tēnei rohe Taranaki Whānui, Te Upoko o Te Ika, Ngāti Toa Rangatira, Ngāti Raukawa – kei te mihi, kei te mihi, kei te mihi. E ngā mana, e ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • 2020 IPANZ Annual Address
    Kia ora. Ngā mihi nui ki a koutou katoa. Nau mai haere mai ki te Whare Pāremata. E ngā mana whenua ki tēnei rohe Taranaki Whānui, Te Upoko o Te Ika, Ngāti Toa Rangatira, Ngāti Raukawa – kei te mihi, kei te mihi, kei te mihi. E ngā mana, e ngā ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Tougher penalties for gun crime a step closer
    Tougher penalties for gun crime are a step closer with the passage of firearms reform legislation through another stage in Parliament. The Arms Legislation Bill has tonight passed its Second Reading. “The changes have one objective - to prevent firearms falling into the wrong hands,” said Police Minister Stuart Nash. ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Arms Legislation Bill: Second Reading
    Introduction Mr Speaker We all know why we are here today. It has been a long journey. The journey did not actually begin on 15 March 2019. It began on 30 June 1997. Almost 23 years ago, Justice Sir Thomas Thorp told us what was wrong with our firearms legislation. ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New era for vocational education
    The Government’s work to put trades and vocational education back on the agenda took another major step forward today with the passing of the Education (Vocational Education and Training Reform) Amendment Bill, Education Minister Chris Hipkins said. “This is a watershed day for trades and vocational education. These law changes formalise ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Bill to Amend the Greater Christchurch Regeneration Act
    Speeding up the return of Christchurch regeneration activities to local leadership is behind the Greater Christchurch Regeneration Amendment Bill introduced to Parliament today by Minister Megan Woods. “As we approach nine years since the February 2011 earthquake in Canterbury, and with the transition to local leadership well underway, the time ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Milford Track to partly reopen after storm damage
    Hundreds of New Zealanders and international visitors will be able to get back out into nature with the Milford Track partially reopening next week, after extensive assessments and repairs, the Minister of Conservation Eugenie Sage announced today. The popular Great Walk has been closed since 3 February after an extreme ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government drives low-emissions transport momentum
    Up to 110 new EV chargers nationwide in cities and regions 50 electric vehicles for ride-sharing The Government is helping deliver more infrastructure and options for low emissions transport through new projects, Energy and Resources Minister Dr Megan Woods says. Tauranga, Nelson, Levin, New Plymouth and Oamaru are just some ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Kiwis better off under Coalition Government
    New Zealanders are increasingly better off under this Government as wages rise and families have more disposable income, Finance Minister Grant Robertson says. Stats NZ reported today that average household disposable incomes after housing costs rose 4.9% in 2019. This was the highest rise in four years and came as ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Another step towards restoring rights for screen production workers
    All New Zealanders need to have their voices heard at work to ensure we have an inclusive and productive economy. Today we introduce a Bill to do this for workers in the New Zealand screen industry, Workplace Relations and Safety Minister Iain Lees-Galloway says. “The Screen Industry Workers Bill will ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Enhanced Taskforce Green for Southland and South Otago
    The Government has announced further help for the Southland and Otago regions to speed up recovery efforts from the floods.  “I’ve approved Enhanced Taskforce Green (ETFG), making $500,000 available to help with the clean-up in Fiordland, Southland, and the Clutha district in Otago,” Minister for Social Development Carmel Sepuloni said.  ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Employers and Industry take the lead to connect students to vocational education
    Following the announcement that more than 340 schools will be funded to run events promoting vocational education, the Government has announced it will fund a further 257 events to be run by employers and industry. “These industry-run events will allow more than 30,000 students to connect with more than 2,000 ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Rental reforms a step closer with the introduction of the Residential Tenancies Amendment Bill
    Today the Government is making progress on a fairer and more secure rental market for renters and landlords with the introduction of the Residential Tenancies Amendment Bill in Parliament.  “This Bill includes a series of reforms to improve the wellbeing of the 609,700 households that live in rented homes, and ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Biosecurity Minister announces world first eradication of pea weevil
    A Government programme to wipe out pea weevil has achieved a world first, with Biosecurity Minister Damien O’Connor today announcing the successful eradication of the noxious pest from Wairarapa. This means the nearly four-year ban on pea plants and pea straw was lifted today. Commercial and home gardeners can again grow ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Temporary Accommodation Service activated for Southland flooding
    Southland residents hit by flooding caused by heavy rainfall can now access help finding temporary accommodation with the Government activating the Temporary Accommodation Service, Minister of Civil Defence Peeni Henare announced today. “The Temporary Accommodation Service (TAS) has been activated by the Ministry of Business, Innovation and Employment to help ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Bridges: Over-hyped and under-delivered
    “Is that it?” That’s Finance Minister Grant Robertson’s response to Simon Bridges’ much-hyped economic speech today. “Simon Bridges just gave the most over-hyped and under-delivered speech that I can remember during my time in politics,” Grant Robertson said. “It’s not surprising. Simon Bridges literally said on the radio this morning ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Police to trial eye in the sky in Christchurch
    A trial deployment of the Police Eagle helicopter in Christchurch will test whether the aircraft would make a significant difference to crime prevention and community safety. “The Bell 429 helicopter will be based in Christchurch for five weeks, from 17 February to 20 March,” said Police Minister Stuart Nash. “The ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Momentum of trade talks continues with visits to promote Pacific and Middle East links
    The Government has kept up the pace of its work to promote New Zealand’s trade interests and diversify our export markets, with visits to Fiji and the United Arab Emirates (UAE) by Trade and Export Growth Minister David Parker. Building momentum to bring the PACER Plus trade and development agreement ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Coalition Govt’s investment in Customs nets record drugs haul: 3 tonnes stopped at borders in 2019
    The Coalition Government’s investment in a strong border and disrupting transnational organised crime produced record results for stopping drugs in 2019, says Minister of Customs Jenny Salesa. The illegal drugs were seized at the New Zealand border by Customs, and overseas by Customs’ international border partners before the drugs could ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Separated scenic cycleway starts
    Transport Minister Phil Twyford today kicked off construction of a separated cycleway alongside Tamaki Drive. A two-way separated cycleway will be built along the northern side of Tamaki Drive, between the Quay Street Cycleway extension and Ngapipi Road. There will be a separate walking path alongside. Phil Twyford said giving ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Earthquake-Prone Building loan scheme: eligibility criteria announced
    Owner-occupiers of unit and apartments living in earthquake-prone buildings will have certainty about the financial support they’ll be eligible for with the release of criteria for an upcoming assistance scheme, Minister for Building and Construction Jenny Salesa says. The Residential Earthquake-Prone Building Financial Assistance Scheme will help unit owners facing ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Travel restrictions to remain in place as coronavirus precaution
    Temporary restrictions on travel from China will remain in place as a precautionary measure to protect against the spread of the COVID-19 coronavirus. The restrictions which prevent foreign nationals travelling from, or transiting through, mainland China from entering New Zealand have been extended for a further 8 days. This position ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Over $1 million to help Tairāwhiti youth into employment
    Employment Minister Willie Jackson announced today that Tairāwhiti rangatahi will benefit from an investment made by the Government’s He Poutama Rangatahi (HPR) scheme. The funding will go to the Tautua Village, Kauneke programme and the Matapuna Supported Employment Programme which will fund 120 rangatahi over two years. “Both programmes work ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • School attendance has to improve
    All parents and caregivers need to ensure that their children go to school unless they are sick, Associate Education Minister Tracey Martin said today. “The school attendance results for 2019 show, across the board, a drop in the number of students going to school regularly,” the Minister says. “Apart from ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Crown and Moriori sign a Deed of Settlement
    A Deed of Settlement agreeing redress for historical Treaty claims has been signed by the Crown and Moriori at Kōpinga Marae on Rēkohu (Chatham Islands) today, Minister for Treaty of Waitangi Negotiations Andrew Little has announced. Moriori have a tradition of peace that extends back over 600 years. This settlement ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Waikato Expressway driving towards completion
    Transport Minister Phil Twyford today with Māori King Tuheitia Pōtatau Te Wherowhero VII officially opened the country’s newest road, the $384 million Huntly section of the Waikato Expressway. The 15km four-lane highway with side and central safety barriers takes State Highway 1 east of Huntly town, across lowlands and streams ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • 3400 New Zealanders treated in first year of new hepatitis C treatment
    The rapid uptake of life-saving new hepatitis C medicine Maviret since it was funded by PHARMAC a year ago means the elimination of the deadly disease from this country is a realistic goal, Health Minister David Clark says. Hepatitis C is a blood-borne virus which attacks the liver, proving fatal ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Kaupapa Māori approach for homelessness
      Kaupapa Māori will underpin the Government’s new plan to deal with homelessness announced by the Prime Minister in Auckland this morning. “Māori are massively overrepresented among people experiencing homelessness, so, to achieve different outcomes for Māori, we have to do things very differently,” says the Minister of Māori Development ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government steps up action to prevent homelessness
    1000 new transitional housing places delivered by end of year to reduce demand for emergency motel accommodation. Introduce 25% of income payment, after 7 days, for those in emergency motel accommodation to bring in line with other forms of accommodation support. Over $70m extra to programmes that prevents those at ...
    BeehiveBy beehive.govt.nz
    1 week ago