Shaky foundations for our economy
The warnings have been sounded. Our economy rests on a shaky ground. Ad hoc and piecemeal responses to crises such as housing and the dairy sector are no substitute for sound strategy. The government has no strategy for real improvement in the productive economy, creating skilled jobs that pay well, delivering a future-oriented economic infrastructure, adding value to our natural resources and protecting the environment and vulnerable members of society.
A growing number of economists are saying that the level of house prices is over-inflated and they will fall. The problem is not only that the government has allowed high levels of immigration without gearing up the supply of houses but also that tax distortions have meant that there is speculation on the prices of existing houses. The result is over-inflated prices. Most families cannot afford to buy their own home, which has been the norm for decades—the expectation has been that all families should have the opportunity to own their own home as the basis for a secure future. Now, it’s a distant dream for most.
But this is far from the only economic problem. For years, the government’s aim has been to produce more and more dairy products. The result has led not only to the pollution of our much-loved rivers and streams but also to our growing dependence on volatile commodity prices. Dairy prices are now below the breakeven point for the average farmer and debt for the farming sector has risen sharply.
Speculators are doing well and so is the financial sector with banks recording higher profits. But the productive foundations of our economy are suffering. This is shown in the continued decline of manufacturing under this government. This is important. Despite the job losses and closure of factories, manufacturing is still the second largest sector in New Zealand. Research shows that 17,500 jobs have been lost in the manufacturing sector under the National government. Major companies such as Fisher & Paykel Appliances, LWR, and Hillside Engineering rail workshops have either moved offshore or shut their doors forever.
New Zealand business can deliver as is shown by companies such as Fisher & Paykel Healthcare and Goodnature. High-value manufacturers create well-paid jobs and enable us, as a country, to earn our way in the world, rather than rely on more debt. New trends such as robotisation, automation and the clean technology revolution represent real opportunity but also pose a threat to manufacturing and to tens of thousands of jobs. Managing change and ensuring that New Zealand business can benefit from these disruptive changes needs a strategy. Government leadership is required to manage these risks and help business to seize the opportunities.
The Green Party has launched a new policy to meet the challenges and take advantage of the opportunities in manufacturing (www.greens.org.nz). In government, the Green Party will establish a Minister for Manufacturing to better represent the interests of manufacturers, recognising the key role they play in a smart, green economy. This works with our other policies to boost research and development spending, use government procurement to prioritise kiwi-made suppliers, and to shift capital from speculation into investment in the productive economy. We have a strategy to stop New Zealand’s long slide down the OECD’s table of economic success, and to build a fairer, more sustainable and higher skill economy for the benefit of us all.
Barry Coates is next on the list to go into Parliament for the Green Party. He is currently developing a Sustainability Programme for the University of Auckland Business School.
The warnings have been sounded. Our economy rests on a shaky ground. Ad hoc and piecemeal responses to crises such as housing and the dairy sector are no substitute for sound strategy. The government has no strategy for real improvement in the productive economy, creating skilled jobs that pay...
The warnings have been sounded. Our economy rests on a shaky ground. Ad hoc and piecemeal responses to crises such as housing and the dairy sector are no substitute for sound strategy. The government has no strategy for real improvement in the productive economy, creating skilled jobs that pay well, delivering a future-oriented economic infrastructure, adding value to our natural resources and protecting the environment and vulnerable members of society.
A growing number of economists are saying that the level of house prices is over-inflated and they will fall. The problem is not only that the government has allowed high levels of immigration without gearing up the supply of houses but also that tax distortions have meant that there is speculation on the prices of existing houses. The result is over-inflated prices. Most families cannot afford to buy their own home, which has been the norm for decades—the expectation has been that all families should have the opportunity to own their own home as the basis for a secure future. Now, it’s a distant dream for most.
But this is far from the only economic problem. For years, the government’s aim has been to produce more and more dairy products. The result has led not only to the pollution of our much-loved rivers and streams but also to our growing dependence on volatile commodity prices. Dairy prices are now below the breakeven point for the average farmer and debt for the farming sector has risen sharply.
Speculators are doing well and so is the financial sector with banks recording higher profits. But the productive foundations of our economy are suffering. This is shown in the continued decline of manufacturing under this government. This is important. Despite the job losses and closure of factories, manufacturing is still the second largest sector in New Zealand. Research shows that 17,500 jobs have been lost in the manufacturing sector under the National government. Major companies such as Fisher & Paykel Appliances, LWR, and Hillside Engineering rail workshops have either moved offshore or shut their doors forever.
New Zealand business can deliver as is shown by companies such as Fisher & Paykel Healthcare and Goodnature. High-value manufacturers create well-paid jobs and enable us, as a country, to earn our way in the world, rather than rely on more debt. New trends such as robotisation, automation and the clean technology revolution represent real opportunity but also pose a threat to manufacturing and to tens of thousands of jobs. Managing change and ensuring that New Zealand business can benefit from these disruptive changes needs a strategy. Government leadership is required to manage these risks and help business to seize the opportunities.
The Green Party has launched a new policy to meet the challenges and take advantage of the opportunities in manufacturing (www.greens.org.nz). In government, the Green Party will establish a Minister for Manufacturing to better represent the interests of manufacturers, recognising the key role they play in a smart, green economy. This works with our other policies to boost research and development spending, use government procurement to prioritise kiwi-made suppliers, and to shift capital from speculation into investment in the productive economy. We have a strategy to stop New Zealand’s long slide down the OECD’s table of economic success, and to build a fairer, more sustainable and higher skill economy for the benefit of us all.
Barry Coates is next on the list to go into Parliament for the Green Party. He is currently developing a Sustainability Programme for the University of Auckland Business School.
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