Opposition parties have committed to hotly debated measures to tackle the overvalued dollar and halt the decline of the manufacturing sector if they get into government.
The leaders of Labour, the Green Party and New Zealand First presented a united front yesterday on the core recommendations of a report resulting from their inquiry into manufacturing.
It was released in Christchurch at large manufacturer HamiltonJet.
The Government did not take part, rejecting the need for an inquiry into a sector that has lost 40,000 jobs in the four years to June 2012.
The four parties conducting the inquiry were Labour, the Greens, New Zealand First and the Mana Party. They heard from 120 submitters.
The recommendations are measures where the four parties agree.
The three key measures in "Manufacturing: The New Consensus" are:
Amending the Reserve Bank Act to tackle the overvalued and volatile dollar so that having a competitive currency is a priority. The priority for the Reserve Bank now is to keep inflation between 1 per cent and 3 per cent.
Tax credits for research and development to stimulate innovation.
New Zealand manufacturers to have preference in government purchasing.
Labour leader David Shearer said the Reserve Bank Act was written 20 years ago when inflation was the most worrying factor for the economy. Inflation was now just one factor and the overvalued and volatile New Zealand dollar another, he said.
"We would broaden the parameters of the Reserve Bank Act. We would broaden the type of participation on the Reserve Bank board - bring more manufacturers in, for example - and create an opportunity to look more widely at our economy, as opposed to rather narrowly, as it is."
The report was "a road map of what we would do in government", he said.
"Certainly, from the Labour Party, we would be deeply committed to making sure that this goes ahead and this works."
Green Party co-leader Russel Norman said the inquiry report was an important piece of work "and the conclusions, as far as we are concerned, form the basis for a platform for a constructive and progressive government".
New Zealand First leader Winston Peters said: "This is a meeting about the report for the advocacy of these policies, which I'm sure all three of us are committed to, no matter what shape the next government is."
Peters was concerned the four parties would be regarded and reported in the media "as an unofficial coalition meeting".
"It's not," he said.
"Whatever the shape of the next government is, these are the policies for exporting and manufacturing that we want," Peters said.
The parties were asked about the "stunning" result for manufacturing in the PMI-Business NZ manufacturing survey for May, released on Friday, which showed the highest level of expansion since 2004.
Shearer said if primary processing of agriculture products was taken out, the picture was not stunning but "rather dismal". Elaborate manufacturing jobs were down 17 per cent. Manufacturers were at a tipping point as to whether they could go forward or not, he said.
"Primary products out of it, this is still a serious situation we've got."
Norman pointed out manufacturing output was down 4 per cent compared with 2007, but if beef and dairy processing were excluded, it was 13.7 per cent down.
Prime Minister John Key rubbished the report.
"I reckon the only crisis is the one that's brewing in the Labour Party.
"Quite honestly, there is no manufacturing crisis in New Zealand," Key said.
"There are challenges for some manufacturers, but if you look at the data that came out on Friday, it was a stunning result - as described by the BNZ [Bank of New Zealand].
"They've got this fanciful view they can lower the exchange rate, when nobody else really can," Key said.
The productivity and efficiency of the sector had increased.
"Yes, over the last 30 or 40 years, some heavy manufacturing has left New Zealand and gone overseas. That's not a new phenomenon . . . but overall to describe it as a crisis is a joke."
- © Fairfax NZ News
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