If National wins ...

[elZorro]

PTC and Neopole, I share your impending gloom over the next two years.. and PTC was correct to talk to Phil Goff with his thoughts, because Labour is after feedback right now, as per usual. I'm not worried about those on welfare, many of them would get a job and arrange someone else to help with childcare or other issues, if there were lots of part-time jobs available, if the pay was suitably above minimum rates, if the job was close to their home.

Manufacturing is one area that does this flexible employment well: the work can be done at any hour of the day or night, it's not retail, can be picked up quickly, although the work might be sporadic, as it feeds on orders. So to get fast improvements around here, we need strong manufacturers, good employers, and probably sales to overseas markets. Labour is very keen on this area, it fits with their party policies well.

[neopoleII]

yes manufacturing is the key to NZs woos, but.... NZ was the first country to say internationally that china is "most friendly" trading partner..... or words to that effect..... from labour.
so this has made it very difficult for NZ with a free float currency, and govt set minimum wages to compete with free flow imports from china which has no minimum wage and govt controlled currency.
we cant even compete with china on high tech as they have most of the high tech factories now.
we are turning into a land of raw material supplier to china, and having to do it with ever increasing minimum wage and escalating us$ value.
just walk into any retail shop and look at any product and ask yourself........ can we make this cheaper or better than the Chinese?
the answer is no.
farm produce and raw material is the only thing we can supply for a profit.
we could however introduce tariffs..... that would secure nz manufacturing jobs for local consumption..... but not export..... not a good plan.
our high tech industries is copied or sold out wholesale.
as is the rest of the world.

i know a man who is a kiwi who owns several mines and mine supply companies in ozzie and he is mind boggling wealthy and he recons that china has already past the stage of " what goes up must come down" ...... for the simple reason that if china goes down..... so does every one else... and that cant happen in this tight global community.
china is the worlds factory now....... for better or worse.
so what a we?
a resource supplier...... small at that.
we need to reset our political system to make sure we dont end up like greece or a banana republic.
sad but true...... at least we have a small population compared to land mass to be able to sustain ourselves if things get really bad.

ie...... currency war....... one kiwi dollar to 50cents US
ie ..... foot and mouth.
ie....... oil embargo.

we are vulnerable more than ever for export dollars but we are self sufficient if worst comes to worst.
obviously worst case points of view here....... but most smart folks have a little tucked away for a rainy day...... does NZ?

[elZorro]

Interesting points, Neopole.. but I know a few manufacturers who bring in some parts from China, but also add value here. And usually in markets so relatively small or niche that no-one will bother to compete. That's not to say the outputs aren't then exported. This works as long as the imported parts aren't really bulky or heavy, as energy costs to transport lower value items can wreck any saving. For example, circuit boards are often made in China, but the parts may be put on over here. That way the units can be made to order in smaller batches.

There's nothing to stop anyone doing product design here either, and lots of projects would also create good work for many engineers. In the rural industries in particular, there are many opportunities for smarter add-on automation gear, and monitors. Lower cost stuff that has a broad application worldwide.

Have to agree with you on most consumer gear, NZ is not going to be able to compete there.

Huntly needs more manufacturing urgently.

http://www.stuff.co.nz/business/indu...-of-job-losses

[POSSUM THE CAT]

ElZorro & Neopole11 The last big depression kept going in waves. Until they had the Bretton Woods Conference where they fixed all the exchange rates & you had to get a majority of members to agree to any changes. The floating exchange rates are a financial disaster. Fixed exchange rates would allow forward planning without the exchange risk or the major cost of hedging making exporting & also some importing an undesirable activity.

[Major von Tempsky]

Oh dear oh dear Possum, you wouldn't get a single economist in any any advanced democracy to agree with that proposition.
The situation would be much much worse with fixed exchange rates which lock countries into terrible and worsening Balance of Payments problems.

As a simple illustration take a look at Europe - which countries are in trouble? The one's with fixed exchange rates who can't adjust - Greece, Spain, Ireland, Italy, Portugal, Slovenia.
Which ones have managed to avoid the problem because they have floating exchange rates?
Britain, Poland, Sweden, Czech Republic......

Take a look at Argentina, that had a fixed exchange rate against the US dollar forcing them to borrow billions of dollars but it became unsustainable and they were forced to devalue and default on their loans. Now they can't borrow a sous from anywhere in the world and their economy is basket case to the point that you are prosecuted if you dare to speculate what the real rate of inflation is.

The World recovered from the Great Depression because of Keynesian economics and the approaching war. After the war it was continuing Keynesian economics and the Marshall Aid Plan that steered the world economy on. Bretton Woods was a growing obstruction to world trade and world growth and until it broke down.

[POSSUM THE CAT]

Major von Tempsky that is the problem economists full of university theory. That cannot learn from history, you had variable exchange rates during the great depression & it continued in waves until they finally got together & fixed the exchange rates. Another sample idiotic university education was free trade are we any better off today with all the free trade & free trade agreements. No we can buy a few luxury goods cheap if you are in the top income bracket. But there is now a lack of employment for about 10% of the population. businesses are suffering from lack of customers. So they lend people money to buy goods like a lot of European Countries. But comes to a stage when the credit stops because they cannot pay it back. Take the new Chinese Locomotives for the railways they were a we bit cheaper than building in NZ. But how much extra did we pay in social welfare benefits & we bought heaps of crap. We have to much of our population being brainwashed in Universities

[fungus pudding]

Major von Tempsky that is the problem economists full of university theory. That cannot learn from history, you had variable exchange rates during the great depression & it continued in waves until they finally got together & fixed the exchange rates.

So tell us, in your ideal world should we raise or lower the dollar? Or will that vary daily depending whether we want to trade with, say, Australia or USA?

[POSSUM THE CAT]

Fungus Pudding you need to fix all the exchange rates not just one. When everybody knows where they are & where they will be in Ten years time. Also currency traders would be out of work rather than trying to manipulate currencies either up or down.

[fungus pudding]

Fungus Pudding you need to fix all the exchange rates not just one. When everybody knows where they are & where they will be in Ten years time. Also currency traders would be out of work rather than trying to manipulate currencies either up or down.

Now I know you're joking.

P.S. Might as well get someone to fix the world's sharemarkets at the same time. This going up and down business just makes for winners and losers.

[elZorro]

I'm not so sure MVT is joking..great conversation starter.

Comments from a Leader in Waiting today..

NEWS IN BRIEF
Our thoughts are with the workers at Solid Energy as hundreds of them face losing their jobs. We call on the company to give workers at Spring Creek on the West Coast certainty about their future as soon as possible. Solid Energy’s woes are further proof – as if it was needed – that National’s plan for New Zealand to sell and mine its way to prosperity is a failure.

Unfortunately, Clayton Cosgrove’s bill to make it harder for our strategic state assets to be sold fell short by a single vote with National, Act and United Future opposed. The bill would have required the approval of 75% of MPs to vote for any future asset sales.

I headed down to KiwiRail’s Hillside workshop in Dunedin this week to talk to the workers about the uncertainty surrounding the business - and their jobs. The workshop is up for sale and a leaked report obtained by Labour shows that if it’s not sold, it will be shut down. We’ll see hundreds of skilled jobs lost as a result and there’s no doubt many of those workers will head to Australia looking for opportunities. We’ve lost 25,000 manufacturing jobs under National’s watch. We can’t afford to keep losing our talented and skilled workers.

You may mock all you like FP, but I bet National Party people will be keeping well away from the Hillside workshop.