Written By:
James Henderson - Date published:
9:26 am, May 7th, 2013 - 95 comments
Categories: Economy -
Tags:
John Key says that Wellington is dying and “we don’t know how to turn it around”. Coupled with Brownlee’s slow suffocation of Christchurch and the Nats’ refusal to unblock Auckland’s transport arteries, its not good news for the major cities. But if Wellington is dying, (and I believe it still has the highest average income) who killed it? The guy who sacked all the public servants? The guy who killed manufacturing?
It is hugely telling that Key has admitted that he and his government haven’t a clue about how to revitalise the Wellington economy.
The answer is actually pretty simple and it’s the same with the rest of the country – get the dollar down.
The high dollar is killing manufacturing in Wellington. 14% of manufacturing jobs in Wellington are gone under National. It’s killing domestic businesses that are being undercut by artificially cheap imports.
Oh and he could stop sacking people, too.
The irony of Key’s comments is that National is making a handful of big investments in Wellington – specifically, $4 billion worth of duplicate highways. And Key’s now admitted that they won’t fix the economy. Imagine what that $4 billion could do if it was spent smartly.
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
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I like a high dollar, means the cost of living is a lot lower.
Crashing the dollar so business can make more coin at my expense doesn’t really appeal.
Surprised to see you guys wanting the people of NZ to subsidize business.
Actually, those people who are currently unemployed because their factory closed down are subsidising you.
I can see why you would like that state of affairs to continue.
What a load of horse shit.
If our exports are only purchased on price alone, we as a country are in a bit of trouble.
NZ should be producing high end stuff not trying to compete with China, we’ll lose every time.
If you are producing goods that people want and are prepared to pay for the exchange rate doesn’t matter.
Also like I wrote above, a higher dollar means living costs are cheaper, people can buy more stuff, travel the world etc.Good times for all.
Low dollar = low wage and higher costs.
Wow…BM trying to pretend that pricing of NZ goods doesn’t matter to foreign consumers, but pricing of foreign goods does matter to Kiwi consumers.
Which is it?
You just want to be on the winning side.
High dollar is good.
Look at the poms, they used to love coming down here it used to be about $4.00 to the pound.
They weren’t complaining.
There’s a currency war on and the only NZ winners are those who have high value assets, keep gravy train jobs and strong incomes. The working class as usual is losing.
So you’re doing pretty well then?
Keeps the price of petrol for the S6 down, yes, and I’ll need new tyres for the 20″ rims in the next few months.
Thats not what Clare said you drove. She mentioned a 1997 Toyota Celica.
No, I do not drive her electorate vehicle.
And nor were the people here who were taking their money.
But you illustrate the problem nicely, the arbitrary confusion between competitive markets and competitive sports. The highest jump wins in sport.
The highest point the most people can trade at wins in the market. A massively overvalued dollar is as damaging as a massively undervalued dollar.
Currently people who actually make stuff are subsidising people who place bets in a 24hr global casino. This is not a recipe for long term success.
we are a country that’s in a bit of trouble, we have the highest current account deficit in the developed world.
An overvalued currency is not a good thing – all it does is make imports cheaper for those that still have jobs, and all that does is increase out debt mountain until the point where it collapses.
It’s hardly ‘good times for all’ when workers in exporting industries and import-exposed industries are losing jobs, losing hours, getting lower pay.
Blown away Lightly
The first impressions from the various sounds emitted from the PM are that of mixed or stupid messages. But the Gambler can’t be such a twat. From the noises he makes, there are signals. What are they?
“people can buy more stuff, travel the world etc.Good times for all.”
– who are those people? how many more are there around the country with each passing month under this rotting & stinking government who rules for the few?
Have you seen how cheap it is to go oversea?
Check out this site, there’s some really awesome deals.
http://www.expedia.co.nz
please go then
trouble is, a lot of people who go overseas choose not to come back. If the high dollar were so great, emigration wouldn’t be an issue.
I’d much rather be living and working in Aotearoa. So would a lot of Kiwis I know, apart from a Key worshipper in Brisbane who’d rather be working in the US and A. The jobs are just not available for us. Some of us are academics, some are small business people, some are tradespeople, some are nurses, and some work in banks. I suspect the high dollar plays more of a role in keeping most of us away than any other single thing, by depressing manufacturing and employment.
great news, so please give us your date of departure and we will arrange a ride to the airport,
Hell if you’re in Auckland I’ll come pick you up and take you there myself.
Well they certainly aren’t in Auckland where most spend all the money or mortgages, schools. countdown, etc.
My advice to Wellingtonians, don’t move North. Its largely closed down over the last four years the main street in Hamilton is deserted. Most of Queen st and Symonds st is an ethnic China town. K Road is more low quality cafes and thrift shops. Auckland CBD is abandoned by big business and top department stores just as much as the Christchurch CBD in 2009.
Part of the reason I moved here were all the lies and image in Metro and the Gordon MacLauchlan books that Auckland was a sophisticated city and a beginners Sydney. Pravda has never published a bigger lie. Auckland is still a male working class town, its 1950s redneck. Gays and crony business is still fashionable here. Its not like Wells st or Courtenay Place here with all the hot students from Vegas and LA serving in hotpants, cleavage and teeth and everything else remade by the best plastic surgeon. Bradford, Bright and Minto would stage a riot here if anybody opened a Hooters. Auckland is so awful that in some ways its even amusing. Despite the PR gestures and all the media hypocrites in SPQR the place is more conservative than Timaru in the 1970s. In the Remmers coffee shop all the only ladies bitch about the criminal travesty of free libraries for the wastrels, Rodney getting married to a female under 40 and the merits of the tenth security camera.
Auckland is awful. I moved here for the cheap motels and apartments. But even that is no longer true and the weekly rate in the tired and tatty motels along great south road has increased from $550 to $650 mainly due to the excess of refugees from divorce and the third world. Sophisticated dining in Newmarket is probably a slab of steak, cold corn and chips.
Thats business sophistication in the Brewer Banks world.
Yes I grew up in Auckland and while I still have a smidget of nostalgia remaining for the place, these days I greatly prefer living in the small provincial town we’ve been in now for some years.
There really is nothing in Auckland that I cannot get locally, except that our definition of traffic gridlock is waiting more than 30 secs at a roundabout. I can walk 20min into the main-street, get everything done within an hour or so and have the same, if not better selection of shopping than I do in Auckland. There are four good cafes, a decent theatre and if I wanted to I can socialise every night of the week.
And no it’s not a reactionary little town either; there’s plenty of social variety if you care to go looking for it.
About the only the only thing Auckland has is the Waitakeres and the West Coast. I do miss that. The rest is a balkanised, dysfunctional hell-hole. Otherwise +1 Robert.
+1
+2
Do we need to form some kind of “smug ex-Aucklanders” club in here? ‘Cause I dibs Treasurer.
Ha, yep redlogix same same down these parts but you should try adding in a city without a CBD as here in Christchurch these days.
Don’t know what the point is living in a city without a city…. it is just one giant suburb. And a pretty damn grumpy one at that.
Waiheke’s OK. Half them are rich the other half are nuts…sorry eccentric! But it’s the most interesting place in (or not in) Auckland
and streams a really good radio station http://www.waihekeradio.org.nz/
There’s lots of reason to be in a specific place. Each have their pros and cons.
I like New Lynn and the west of Auckland. I like the range of things available at the public libraries. And, though there’s much to dislike, I’m very much into the history of Auckland and further north. I want access to some of the historical material here. And I want to witness how it changes – whether it’s good or bad.
Then you don’t get to join our club.
I like Auckland. I don’t miss Hooters. I don’t mind Chinese businesses. I like league in Grey Lynn Park, fishing in the Gulf, and the West Coast. I can make my own food. I have no desire to be served by hot students with cleavage. I don’t care who Rodney marries. It could be improved, but what couldn’t?
Mostly, I don’t understand your post. The business sophistication of Sydney is just higher prices, more cocaine and an even more brutal police force.
McFlock, this is not as binary and as simple as you are making it out to be and probably thinking. Our business has been able to keep most of our remaining manufacturing units in NZ because of the high dollar. Most of our raw materials are imported and it allows us to be competitive for NZ supply and also export back. There is a lot of fabrication businesses in NZ adding value to imported raw materials. Those are the jobs you are putting at risk by lowering currency.
What are the imported raw materials you use in your industry.
CV, I would like to tell you, as you do have intellegent insight, however this is not the best forum. They are materials that have never been made in NZ. Mostly come from Europe, US and now asia, pretty technical and there is not enough demand in NZ / Aus to set up here.
There are many conversion and fabrication businesses in NZ in many sectors supplying local demand and there is a major down side to those jobs those businesses employ if the dollar was dramatically and quickly devalued.
You are talking raw materials and not components right? Are these materials highly fabricated (eg carbon fibre or other composites, or highly pure chemical mixes?)
But how do you compete against low cost low wage low currency manufacturers who are far closer to supply sources for these advanced materials (or are supply sources themselves)? In other words, what’s the special value add which allows you to disregard the added cost of your final product in international markets.
Essentially there is a massive customisation to everything that we produce that is very hard to control in offshore environments. Essentially eveything we make is designed specifically to that project.
That is the onshore value add.
And you sell in USD and Euros right?
Hang on, if you’re exporting to the same area (“back”) as you import the raw materials from, there’s no affect regardless of what the exchange rate is. Essentially the difference is the value added here in NZ, which is more expensive for the same work because of the high dollar. Your costs are temporarily depressed because of the government’s shit labour laws and high unemployment, but that simply means that you’re profiting off the fact that a couple of hundred thousand of your fellow citizens are unemployed.
Given that we really need higher value-added manufacturing industries, rather than manufactured goods where the bulk of the cost is in the raw material (with slight value-addition from semi-skilled sweated labour), do boost the macroeconomic indicators and produce higher local wages to be spent in NZ, it would be better for the country if you profits were made by increased income rather than reduced expenditure.
But hey, if you think minimal-value-added business is the be-all and end-all of NZ manufacturing, I can see why you’d support making tens of thousands of people unemployed so your particular business can be profitable.
I know, let’s just rip out some more trees and stack them up in a jam.
McFlock only a small level of production from us is exported. But if you have ideals that NZ has strong manufacturing base supporting NZ consumption then I would say that not everything that those manufacturers would be using would be produced in NZ and often the cost threshold to do so would be prohibitive. Therefore their ability to purchase well is a key driver to them.
Oh, so now “exporting back” is only a small part of your business.
So basically, as an importer you like the high dollar. Good for you. But you still pay your workers in NZ$$, don’t you? So what you make in materials purchases you lose in wage payments.
You still have to compete with imports that had the value added more cheaply overseas? So for you to be enjoying a high dollar, your materials purchases need to be a greater proportion of your budget than your wages bill (contrast with, say, building rail rolling stock). So all of a sudden, as manufacturers go, you’re not even a particularly large employer.
“Our business has been able to keep most of our remaining manufacturing units in NZ because of the high dollar. Most of our raw materials are imported and it allows us to be competitive for NZ supply and also export back”
That’s horseshit Rob. The $NZ doesn’t affect the cost of imported raw materials. If the dollar drops 10% you pay 10% more for the imported goods in $Nz and when you export them again you get 10% more for them in $NZ. No difference in cost at all. On the local market your competitors fully manufactured imports are 10% higher whereas your goods are 10% higher only on the imported content, you make more profit.
The $NZ only affects domestic content in manufactured goods.
BM
We have all become junkie’s for the high dollar as we buy our imported goods. But there is a cost on people who would have been happily working and earning at home-made manufacturing, even if it meant dearer prices to we consumers.
Having a system that had the expertise to supply citizen’s needs actually met the employment needs of a whole society and country. Now there is employment providing a decent living for a limited number, and yet those comfortable and superior citizens feel entitled to all they have and to make derogatory comments about those impacted by this rotten economic system we are enmeshed in.
A high dollar hurts exports, which in turn hurts businesses and results to having these companies sacking their employees. Without a job, a person doesn’t have enough money to purchase locally manufactured or imported goods.
It’s a balancing act and the Nats don’t have a clue on how to run the economy.
When John Key said the government (his government) doesn’t have a clue on how to fix Wellington, he is basically saying he doesn’t have a clue on how to fix the New Zealand economy. The high NZ dollar is only artificial and is a result of the government building up on its reserves. But these can’t be sustained forever. An economy has to PRODUCE. It can’t just sit around piling up a lot of cash just to bring down the deficit.
As I’ve said, it’s a balancing act. John Key and his so-called economic managers don’t have a good grasp of economics, and yet they pride themselves in being astute businessmen. A successful businessman doesn’t necessarily possess knowledge of economic, banking, and finance theories. One has to possess this knowledge in order to be able to address the current local and worldwide economic issues
DR
Yes this seems to spell out the problem – we’re locked into this low income, low inflation, stability that the overseas ‘investors’ want. I say let’s have some riots and look like a dodgy place to invest, our dollar will fall, our exports will rise within six months, employment will increase. Food riots anyone?
No, many manufacturing businesses do well with a high dollar. Not all manufacturer export.
Rob
That’s good to remember – that we still have manufacturers not focussed on exporting. But then are they may trying to get into Australia which is talked about as being a ‘domestic market’ but trading there is considerably different to here from what I have heard.
And our exports must keep up to balance our dddddddddesire for steel gardening sheds on big wheels, cheap dollies, plastic racing car models, clothes of all kinds, china with nice patterns, coffee mugs galore, and things that go bong in the night after we have had them a short time. In the morning they don’t go anywhere.
And all the while our current account deficit goes up and it is a sock filled with sand to hit us with and we haven’t any ability to protect ourselves against this constant affray, as it is built into the model under which we operate, now and for ever. Or until we actually fall over unconscious and get dragged off the stage.
“The best things in life are free… but you can give them to the birds and bees” , I want money to buy things!
astute “salesmen” (and women).
No it doesn’t. The cost of living is the same, the delusion that it’s cheaper is all that’s changed.
Of course, you’re a delusional right-winger.
If you’re wealthy and consume a lot of luxury foreign goods while both here and holidaying overseas, yes it’s cheaper.
The cost of living is artificially low because the exchange rate is unsustainably over-valued when you consider the foreign exchange payments to foreign exchange earnings imbalance. The currency dealer who can predict the day of reckoning stands to make a lot of money.
There’s a discussion with Wellington’s Celia Wade Brown and Nick Leggett Porirua mayor on Radionz now. I can’t get a certain understanding of the actual situation and what is thought to be best. The Wellington region has nine different mayors and they both think the number needs to come down for ability to deal with government. Hutt seem to want to be separate, which seems strange being so close to Wellington, and the Porirua mayor very vocal and sometimes rude to Wade-Brown. They will know within a few days as to current thinking is, and later, Celia Wade-Brown says that there would be a poll.
It seems to me that geography makes a difference. The east coast to the Rimutakas appear to be an area with a natural boundary and a discrete character. Regional conferences and interaction would bring them into the loop.
[deleted]
[lprent: You are currently banned. Doubling the ban by another 4 weeks for leaving a comment to the 25th of June. Adding you to auto-spam. ]
TightyRighty
Here’s your chance. You always know best. It’s time that the country gave your the leadership that you deserve and we saw you in action giving us the treatment that we need and deserve. And it’s you who could best deliver it personally instead of sitting at the side finding fault with the incumbents.
This of course could apply to any of us who have criticised our pollies and their servants (not includin the ones who still want to be public servants). I am just naming you because you are the most opinionated, vituperative so and so of all of us.
Wellington city manufacturing is also affected by the removal of the industrial hubs,to big box retail forcing the cost of land use up.
Rongotai.Kaiwhara Ngauranga etc.
Rongotai is a good example where we have seen niche manufacturers replaced by big box retail on land compulsory acquired by a private company the airport.
in the city say te aro most small niche companies have had to relocate due to the expansion of the apartment and office sectors, the spurious rents have now met the constraints ie limit where excess floor space now around 18 hectares,
This loss of industrial/light industrial parks and available land for future expansion of industry, could be shown to be an outcome of the mindset of NZ authorities that manufacturing is past tense. The country’s prosperity is now largely measured by retail spending. Our consumerism is reported breathlessly as down, or up for Christmas, surprisingly keeping up in January etc.
That and tourism where we are getting a name that will put us up by Chile or was it Argentina where they dropped people they didn’t care about from planes over the sea. Also we have technology work where one of the main employment sectors receives nothing but cowpats on The Standard and in other sectors, the government gives contracts to Australia.
Geez life gets teejus don’t it. We can never win because anything we try and succeed in gets the flesh picked off its bones by the carelessness and incompetence of those in positions of authority or leadership (kiwifruit, orange roughy). Add the negativity and backbiting of NZ people whose idea of their own perspicacity leads them to state what they want, consider they are sure to be totally right and be prepared to destroy present working models in favour of some unreachable ideal, which can include keeping present goals but cutting the budget by half. Cheap or nasty that seems to be our options. And unfortunately pointing out individual examples opposite to that doesn’t change the trend.
“You can’t berate Wellington on a good day.”
Oh well, we may as well all piss off home then. Wellington is a goner as well as all our small towns. Last person out of the Beehive please turn off the lights.
Or, for the rest of us: get your shit together and Fightback! in whatever way you can. Join a union or political group, get informed, support your neighbors and friends.
I’d say it’s a strategic ‘gaff’ so they can screw over welly just like akl has been with a superwindycity the old bait and switch.
Love the way Rachel Smalley on TV3 today was told she was wrong by shonkey as he didn’t say what was reported he said…..be nice to get a recording of the actual speech out there.
Nothing he does is without and end game, especially with the audience he was addressing.
Could be another ‘wages drop’ moment.
Much of Wellington’s downturn is due to the Tory’s vicious gutting of the public service. With so many unemployed the government should be expanding the public service, not contracting it through austerity. 20,000 additional public sector jobs based in Wellington would go a long way to solving the current economic malaise.
Didn’t you hear? Big government squeezes out the private sector.
Sometime back I saw this Gully being pleaded for like a bag of pork scratchings by this “leg ‘o lamb” , without which the region would starve.
Bulldoze Welly city centre and turn it into dairy farms. Or start mining there. Simple. There you go Mr Key, I’m sure I’m just saying what you were thinking.
Yep…grow cows on council land.
Start with the botanic gardens
more cows, more cows…thats the answer!!!
Big earthquake due, isn’t there?
Buggers might trample my guerrilla plantings……
Lets hope all those recently made unemployed , highly educated, valuable NZ public servants now turn around , get politically active, and Bite the uncouth uneducated National Party and their pathetic hangers-on in the bum! Wellington was and is a great New Zealand city!!!!! It should not be allowed to be trashed by John Key and his mates for their own ends!
When the Prime Minister starts publicly denigrating his own capital, one of them has got to go.
https://fbcdn-sphotos-f-a.akamaihd.net/hphotos-ak-ash3/947123_10151365711181423_1124317767_n.jpg
By anybody other than a right-
whingerwinger you mean?On the face of it Key’s comments are pretty innocuous, really. But when you look at his motives they show what despicable scum Key is. Attempting to generate thinking amongst people that Wellington’s in need of serious reform then…whammo…the only solution is a super-city. The guy is nothing but filth and slime. Where’s the opposition on this? “Key trying to soften up the public to accept need for super-city” etc… Easy stuff. Media training 101. Instead we’ve got the mayor and others running around defensively trying to say how wonderful Wellington is. Pathetic. Shearer’s advisers are totally inept. Key’s nastiness and hypocrisy and general scum-like behaviour has been particularly sickening over the past few days.
Why the rush? Just give Shearer another 6 months to get in the game, there’s plenty of time.
Give the guy a break. I might’ve heard a coherent sound bite from him this morning.
“Shearer’s advisers are totally inept.”
– that’s part of but not the only problem.
Yes…of course. Give us your thoughts on the rest.
Typing out my thoughts would take a long time. How about the following for brevity, from someone very astute?
“With Shearer at the reigns [sic] heaven help us. The guy really is a plonker.”
That sounds familiar.
Local Body elections this year.
The Nats are just laying the ground, doing the brainwashing, oh, and they REALLY hate those Green councillors……
They really hate Celia…..watch out for more trashing of Celia nearer the election
They have an agenda (roads, a supercity…)
they would just LOVE to take Wellington over and have it run by their mates
“The Nats are just laying the ground, doing the brainwashing…”
That’s right. And just look at how people are responding. While everyone’s going “Wellington’s not dying, we’ve got a lovely city”, Joyce and Key are planning…
John Key exposes another side of his true self yet again…..
loose lips
loose mind
loose logic
loose analysis
loose thinking
loose honesty
loose
what a dipshit of a prime minister.
And yet Opposition parties struggle to counter him.
It’s as if they’re not even trying.
It’s like NZ Power. Where is the damn follow up? Where is the counter-attack to the insidious right wing crap? At least show NZers that you stand by your policies with a bit of fight and mongrel.
Where is the damn follow up?
Oh that’s perfectly clear. That useless dollop of custard Robertson shat his pants and issued a press release (he sure loves press releases – they save having to actually do any work) to the effect that he knew he’d been naughty and was effer so sowwy would neffer, effer, interfewe in the marketth effer again.
Fucking useless.
If there’s one thing… no, two things you can depend on “Labour” to do, they’re, one, stab you in the back, and, two, snatch defeat from the jaws of victory. All in the name of complacency and a lazy sense of entitlement, which they’ll call “pragmatism”.
Watch Campbell Live’s take on Wellington. It was on tonight.
.
As for admitting that he doesn’t know what to do about it.
For fucks sake Mr Whizz Kid, you’ve got 300,000 people, most all keen eager beavers in the typical kiwi manner, lotsa smart people as well, you have a bottomless pit of money flwing through the place thanks to the hard work of all of us out here and our taxes, you’ve got all the infrastructure of a thoroughly modern city…… and yet …….. and yet ……. John Key has no clue how to fire them up!
Bloody useless. How on earth can he make a claim that he knows what to do with the rest of NZ when he can’t fire up a place like that??
Useless
Absolutely fucking useless.
Key knows what his answer is but it’s part of his and Joyce’s filthy strategy to say they don’t know what the answer is. They both know it’s…the SUPERCITY!!!
something is going on, he is not this dumb, surely.
He is that dumb. It’s just that we are dumber. That’s why he’s Teflon John.
Where is the money for the super motorways coming from?….out of DOC’s environmental pocket and over the discarded made redundant public servants?….Why super motorways nobody wants….except perhaps Key’s mates?….and why?….to line their pockets…..to Hell with Wellington , to Hell with Public Servants and to Hell with the environment! ….John Keys interests are not New Zealanders’ interests….
BM – what an ignorant creep you are. Every comment you leave here reeks of ignorance, greed and voting National/Act. So, cheap flights overseas is your measure of how good life is. Jesus. You live in that National bubble don’t you, with no idea how a hige amount of kiwis struggle week to week – and are worse off under this stinking National govt.
Please take that cheap flight outta here.
Harsh comment.
I actually thought I was doing a good deed bringing that website to every ones attention.
People may not of been aware of the good deals out there.
For example look at this one, they’re practically giving it away
http://tinyurl.com/bs5epln
Key’s probably just talked $20k off the price of every house in Wellington, at 200000 households for a total of $4 billion. How’s that for economic sabotage? I suppose we deserve it though, for not voting in that nice (who ran for Wellington Central again?).