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Wheeler on the death of manufacturing etc. etc.

Russel Norman MP
Russel Norman MP
russel [dot] norman [at] parliament [dot] govt [dot] nz (Email)

It’s interesting to compare yesterday’s speech by Reserve Bank Governor Graeme Wheeler with Sir Paul Callaghan’s vision for a prosperous New Zealand.

Wheeler describes New Zealand’s manufacturing sector as a sunset industry, in terminal decline due to globalisation, competition from low wage countries, and a shift to a service intensive economy. It’s the kind of bleak outlook that sets up the rest of his speech justifying why he’s not going to fight to save our manufacturing sector.

Contrast this to the late Sir Paul Callaghan’s vision for New Zealand where he directly addressed the myth that we can no longer manufacture competitively in New Zealand. Not only can we manufacture competitively, we have to manufacture if we want to produce high value-added exports to pay our way in the world.

The export of elaborately transformed manufactured products is one of the key ways we can sell our specialist knowledge and skills to the world. This export strategy can’t be undercut by low wages elsewhere. And for most of this last decade, manufactured exports have remained our biggest export earner, higher than dairy exports, and higher than tourism. This high-earning potential is reflected in the fact that manufacturers make up 17 of the top 20 technology companies in the Tin100 list.

Graeme Wheeler understands that we’re living with an over-valued dollar and an unsustainably high current account deficit, but fails to understand how his policy settings are actively contributing to the on-going hollowing out of our productive economy. His sole focus on one outcome – inflation – has passed its use by date.

Russel

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