The NZIER report released today, Lifting Export Performance prepared for Export New Zealand is a timely reminder of the challenging issues facing us if we are to improve our standard of living, the Employers and Manufacturers Association says.
“Boosting exports is vital to lift New Zealand’s economic performance,” said EMA chief executive Kim Campbell (left).
“This report asks the difficult questions why we are not improving our export performance faster, and in a fresh way,” he said.
“It underscores that we must not underestimate the challenges of scale and distance our businesses face.
“New Zealand has to compete for investment dollars the same as every other country, and for us to attract investment in productive enterprise we need to focus on doing extremely well those things where we display demonstrable strength.
“But to grow our exports we will also need to specialize and diversify further.
“To do that we could introduce new policies and practices to offset the challenges faced by some of our exporters, though there is no silver bullet.
“Its gratifying the report agrees our company tax rate is too high for a country of our size, location and modest income levels. We should aim to get ours to 20 per cent, comparable with Switzerland or Chile.
“We note it says government spending can have unintended consequences and act as a tax on exports.
“Keeping Government spending under firm control, and the public saving more, will have far more impact on the exchange rate than trying for a quick fix such as printing money.
“All New Zealanders must understand we cannot achieve higher standards of living without funds to invest in productive businesses.
“The report remains silent on the gains to be had from investing in manufacturing; every job created in manufacturing delivers five more in the wider economy. The lack of extrapolation of this through to the export sector and job creation is somewhat surprising given the report is authored by the NZIER think tank.
“We agree that developing a population policy would be valuable; however 15 million people by 2050 is aspirational and invites speculation on what New Zealand would be like with such a level of population density.
“Another unanswered question is: What should we do now?
“Its no use thinking by standing on an acorn we will end up at the top of an oak tree.”