Handicapped by the strength and volatility of the New Zealand dollar, manufacturing exporters and those dependent on them are apprehensive at predictions the currency might climb higher. Owen Embling, managing director of Hamilton packaging maker Convex Plastics, tells of customers who are finding exporting hard. Sam Lewis, chairman of the Affco meat company, warns that the kiwi reaching US90c would be "disastrous”.
But the Government is sticking to its economic strategy. Finance Minister Bill English insists it is “taking every measure it can to exercise its indirect influence on the exchange rate” to help make exporters more competitive. He means it is doing everything it intends doing. Fair enough, he has discarded a call from the Manufacturers and Exporters Association to get the kiwi down to US60c. This depreciation of about 25 per cent would seriously erode all incomes and living standards.
But New Zealand First leader Winston Peters is right to implicate the overvalued dollar in a perturbing spate of layoffs - 120 redundancies at Solid Energy's Huntly East mine, 100 jobs at the Kawerau pulp and paper mill, up to 400 jobs hanging in the balance at Spring Creek Mine . . . He didn't mention 65 jobs at the Tiwai Point aluminium smelter, the potential loss of 20 fulltime and 200 seasonal workers at Mussel Processors, or Goodman Fielder's plans to sell or close several of its 53 plants (it has nine bakeries in New Zealand).
Norske Skog, which will close a newsprint machine at its Kawerau plant, plans to upgrade a mill in Tasmania with federal and state government financial help. No such luck here. Mr English says the Government owes it to the people who have lost their jobs to continue “to support the many businesses that are creating jobs”. But it is not helping them directly and in the past June year only 13,000 new jobs were added - a rate of increase marginally less than the rate of increase in the population. Moreover, the latest forecasts from the Business, Innovation and Employment Ministry show higher unemployment rates over the next two years than were showing in Mr English's Budget in May.
The job losses cited by Mr Peters were “regrettable but probably unavoidable”, Mr English said. Probably he is correct, under policies the Government intends maintaining.
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