The Draft Auckland Unitary Plan has much to commend it. It focuses on resource management, responds to the reality of climate change & aims for a more dense but ‘liveable’ city. It has weaknesses, embraces destructive “growth” and raises questions: e.g. about affordable housing & environmental management.
As a Canadian currency dealer dubs the NZ$ the “new gold”, John Key sings the praises of a high dollar
Convicted fraudster and Herald columnist Damien Grant says ‘good riddance’ to manufacturing in his latest piece. A lower dollar would make his next smartphone more expensive, he says. When not in jail, Grant’s a receiver. Things are good for him at the moment. But, I’ll tell him this: even carrion birds ultimately need a healthy herd to scavenge off.
Inflation is still below the Reserve Bank’s target band of 1-3%. It says: “ This mainly reflects the impact of the overvalued New Zealand dollar.” The high and overvalued dollar keeps import prices down , but kills exporters who must provide for our economy’s future. The Reserve Bank’s obsession with the very different problems of the 1980’s means that as a country we are eating our seed corn.
National is failing to resolve the lack of jobs as they provide a 14-year high in unemployment – even after exporting 180,000 Kiwis to Australia. If we add them in the unemployment rate doubles to 13.8%. More than 40,000 of those job losses have been in manufacturing. Research says that manufacturing jobs have a multiplier of 2.9, that means about 80,000 other indirect job losses. Combined that’s 2/3rds of our unemployment rate, just by getting back to where we were when National took office.
The World Bank has recently issued a report saying NZ needs to focus more on being friendly to multinational corporations. Matt McCarten argues that some multinationals are bad for our health. And sugary food and drinks are rotting Kiwi children’s teeth.
Japan just elected a Liberal Democrat government promising more jobs through a huge quantitative easing programme. The US has stated it’ll continue QE until unemployment drops below 6.5%. The effect has been to send our dollar to new highs, killing exporters and import-exposed local businesses. Contrary to media belief, Japan and the US aren’t in worse positions than us.
On TV3 this morning, John Key was soothing and slick. All is well on Planet Key, and critics are delusional. He reeled of numbers and facts, but material realities of daily lives, and the suffering of people on low incomes aren’t mentioned. And asset sales?
Yesterday, 60 highly paid jobs at Rakon where lost and we learned 5,700 manufacturing jobs had been lost in the past year. The reason, the high dollar made manufacturing here untenable. Steve Joyce shrugged his shoulders like it was nothing to do with him. But it’s his government’s failures that are forcing Kiwi manufacturers overseas.
Yet National’s position is that there isn’t a problem, let alone that they can do anything about it.
There is ample evidence of a deep and lasting crisis, but in the delusional world of Planet Key it doesn’t exist. The EPMU Job Crisis Summit opened a much needed conversation. Russel Norman likened the New Zealand economy to a rudderless sailing ship In Stormy Seas. Will the summit be the start of a sea change for NZ?
Why is John Key backing the flagging tourist industry as a major export earner for NZ’s future? His trip to Hollywood was partly about using the Hobbit to promote NZ as a tourist destination. Why is the government so fixated on attracting more US tourists?
40,000 manufacturing jobs gone in four years. Manufactured exports in free-fall. Tourism revenue collapsing. If that’s not a crisis, what is? Why is […]
The ever forward looking and even-handed Herald devotes its editorial to attacking Labour for supporting Winston Peters’ Bill to make some small changes to the Reserve Banks’ objectives to bring them more in line with Australia’s. Leaving aside the fact that the Herald hasn’t attacked NZF or the 3 other parties who support this, only Labour, isn’t it time Granny got with the programme?
Talk fast, shoot the messenger, and spin like a top. That’s Joyce’s style, trying to defend the indefensible; National’s neglect of New Zealand’s manufacturing industry.
On The Nation last weekend Joyce insisted he was busy talking to business about export growth; he obviously wasn’t listening, as exporters’ number one problem is our over-valued and highly speculated exchange rate. He called Labour’s fresh approach to this problem “voodoo economics.” Switzerland, Singapore and Denmark? This week David Cunliffe will be on the Nation showing that the Labour economic team are alive to new ideas needed.
Fresh ideas to grow a stronger manufacturing sector, on top of the major changes Labour has already signalled featured in a speech given today by David Parker to a union audience in Wellington. David Cunliffe was there too, and I particularly liked the discussion afterwards. The key players are receptive to good ideas and it looks like Labour will have a real alternative to offer at the next election.
SST Business Editor Rob O’Neill said today: “There is a great deal of lip-service paid to “innovation” in business. What is not often acknowledged is how embedded innovation can be in manufacturing. Making stuff, or being able to talk freely with the people who do, can be a source of inspiration and great ideas for companies.” I got a lot of inspiration from Swedish Academic Goran Roos on this topic in Auckland on Friday. South Australian Premier Jay Weatherill has asked him to head up their manufacturing strategy next year. We could do with someone like him too.
Key’s ditched the surplus target that was so important a month ago – yet another casualty on the way to the brighter future. The Queen may have asked him why he didn’t see European contagion coming. Shearer is right – Europe is an excuse for a government that has run out of ideas. Labour does have a fresh approach – we need to hear more.
The news out of Europe, China and Australia is looking worse by the day. What’s coming at us doesn’t look pretty. I was about to do a post saying I hoped someone in Labour was doing some scenario planning and was very pleased to see today that Parker’s eyes are open.
The Greens launched their Budget alternative this morning. Titled “Smart Green Economics” it lived up to the billing. Extra heft was provided by BERL economist Dr Ganesh Nana paper arguing that the Government’s asset sales programme leaves the government accounts permanently worse off. It was also good to hear about opportunities and their alternatives. We’ve had enough of TINA.
John Key likes to trade on his experience as a, well, trader. You know, he’s the deal maker. The one to steer us through tough economic times, to get our exports growing. He understands the markets and that knowledge will benefit New Zealand. But, how well has he really done? Let’s start this series close to home for Key: the exchange rate.
Against the will of the Fonterra farmer Shareholder’s Association, National is trying to destroy Fonterra’s cooperative model on vague grounds about access to capital. The end result will be the one world-leading, world-scale company we have, which brings in 20% of our export earnings, will start sending it profits offshore. David Cunliffe makes the case passionately and eloquently.
Mediation broke down in the Port dispute again yesterday with the PoAL management still refusing to make any concessions. So it’s back to court for a ruling on PoAL’s lockout without notice. Hopefully, the Court will side with reason, force the Port to allow the workers back and impose compensation for lost wages along with hefty fines.
The trailers for John Key’s Thursday speech are calling it for a ” new super-Ministry” under the command of Steven Joyce. Merger isn’t the issue – the policy direction is. If Joyce just stays focussed on roads of national significance, mines and oil wells of national significance, and casinos of national significance it will be another waste of time reshuffle. If it becomes genuinely high quality export focussed, then it may prove worthwhile. Fingers crossed.
While the rest of the world is moving away from the ‘hands off’ monetary policy that became fashionable in the 80s, our government insists on playing by the outmoded neoliberal ‘rules’ of a clean float. Well, what happens when everyone else ‘cheats’ by printing free money to drive their currencies lower and we sit on our hands? We lose our assets and our exporters.
The Productivity Commission reports that freight costs are 25% higher here than in Australia and freight costs as a % of cargo value has risen in recent years. Their solution? Make the public and port workers poorer by privatisation and casualisation. Of course, those are ideological goals, not solutions to the freight cost issue, which has nothing to do with ports.
National have a rubbish short-term plan for Government debt: Asset Sales.
But they have no plan at all for the private debt that is forecast to blow out worse than ever under their policies. Bit like the economy in general really.
The Tertiary Education Union has revealed that 350 jobs are for the chop at Canterbury University – 18% of the workforce. The Uni, hardly reassuringly, says its 100 to 500. The Nats blame the quake. That’s rubbish. These kind of cuts will permanently gut the Uni, leaving it in no position to be part of the recovery. National: the anti-education government.
Free trade is meant to be about opening up markets for our exports so that we can improve our trade balance and, ultimately, become less indebted as a nation. Yet the opposite seems to be happening. Darkhorse shows that this is the experience of all countries that lower their trade barriers in a still largely protectionist world.
Next week, a report will reveal the abuse of 2,500 foreign workers used as virtual slaves on ships employed by kiwi fishing quota holders in our waters. By rights, we should have a world renowned fishing fleet. Instead, we let our potential go to waste and employ foreign slaveowners and human traffickers to do the work instead.
Every US dollar we make in exports is worth 17% less in New Zealand than 4 months ago. Gonna get worse. How long’s this sustainable?
Another big fall in dairy prices overnight. Yet the dollar keeps breaking record highs.
No it’s not a virus. It’s our dollar surfing on a dumper. Gareth Morgan and Neville Bennett have both written about it recently. Bennett says “There is increasing evidence that New Zealand is ailing. The symptoms are a high exchange rate, excessive foreign debt and a decline of the manufacturing sector.” The resulting damage if nothing is done, says Morgan, is “a hollowing out of our non-commodity producing businesses, no correction in our household savings rate and in time, a balance of payments/external debt crisis as those factors conspire.” Bennett is not in the camp of those who say nothing can be done and offers some ideas backed up by the IMF. We need more thinking like that.
Once upon a time New Zealand was the most prosperous country in the world, living on the sheep’s back. But that was when its population was only two million. The fruits of a raw commodity export sector now have to be spread over more than four million. We could provide decent jobs and income for all by processing these commodities in New Zealand.
Key: So, Gillard’s coming. Are we talking about a single economic zone?
Groser: Umm. No. Mobile roaming charges.
Key: Christ, Tim. We’re really racking up wins for Kiwi exporters here, aren’t we?
Captain Panicpants: Your numbers with women are down over Hurley. They say you sounded disloyal and they empathise with Bronagh.
Key: Shit now that’s serious. Call the missus. We’ll do something cutsie and distracting.
