18 Jun 2013

English rejects monetary policy changes to help manufacturing

3:42 pm on 18 June 2013

Finance Minister Bill English says proposing big changes to monetary policy to try to help the manufacturing sector is a major misjudgment.

A report commissioned by Opposition parties Labour, the Greens, New Zealand First and Mana has recommended policies aimed at bringing down the New Zealand dollar and helping grow the struggling sector.

Mr English told Radio New Zealand's Morning Report programme on Tuesday there needs to be some perspective on the discussion as manufacturing industries have been decreasing around the world.

He said the focus needs to be on making sure the sector is as competitive as possible.

Green Party co-leader Russel Norman said submissions made to the inquiry by manufacturers made it clear they are struggling and changes need to be made.

However, Mr English said only 6000 to 8000 jobs have been lost.

Dr Norman said every official statistic confirms manufacturing is in crisis, whether it is recording job losses or showing that manufacturing exports are down 16% since 2008.

He dismissed a recent survey of businesses which revealed manufacturing activity is rebounding, saying it did not include firms which have closed.

Policy not in line with competitors - economist

BERL chief economist Ganesh Nana says New Zealand's monetary policy is not in line with countries that New Zealand competes with.

Mr Nana backs calls by the Opposition parties for a more interventionist approach to monetary policy as a way to help struggling manufacturers.

Mr Nana said New Zealand's monetary policy is no longer fit for purpose or in line with the countries it competes with and a small tax on currency speculation could also help manufacturers.