Officially it’s called ‘Manufacturing: The New Consensus’. It's the opposition’s results into their inquiry into the "crisis" in manufacturing.
It carries an optimistic, if not slightly predictable, note by suggesting the true potential of manufacturing could be unleashed if a certain series of broad based polices were followed. Those policies just happen to be the policies of the people who commissioned the report. Polices like regulating the dollar, tax incentives, control of markets like electricity and a procurement programme that favours locally made products.
We can knock these off quickly one by one. You can’t control your currency. We did that under Muldoon and look what happened. Venezuela still does and they’ve run out of soap and toilet paper because of it. Tax incentives - I guess you could do that, but who pays? Or what gets cut from government expenditure to give the money to the manufacturers?
Regulating markets like power - that has already been exposed for the economic joke it is. Competiton and investment would be choked out of the industry in a return to the days where politicians set the price for everything. That's before you get to the bit about foreign investors taking fright. And a programme that favours Kiwis - been there, done that, doesn’t work. Good in theory, but people buy what they like. If we start locking out competition, will we be complaining when they lock us out? As free traders, you actually have to trade freely and artificially jacking up markets with patriotic hot air and regulation does nothing but ruin your reputation.
So the ideas are fraught. But here’s the good (and yet embarrassing) news. This report comes out four days after the official report into the state of our manufacturing which says it’s performing at its highest level in nine years. One economist called the figures “stunning”. Another said there would barely be a country in the world performing with the numbers we currently have. Very little global manufacturing is in expansionary mode, yet ours is.
So in essence, there is no crisis. You can’t have an industry performing at its best levels in nine years and call that a crisis. The ‘crisis’ was invented by Labour and the Greens and New Zealand First for political purposes. They held a series of meetings in which they invited the aggrieved to come and let off steam and then wrote a report on a non-existent problem that conveniently encompassed their polices by way of a solution.
But they’ve been busted by the truth. The manufacturing index is made up of numbers and facts, not ideals, waffle and political agenda. The numbers tell us manufacturing is performing better than it has in almost a decade.
You want to be believe numbers? Or the snake oil salesmen?
Hosking is dead right; there is no crisis. The only crisis at the moment is the one for those politicians who hate being in Opposition, and who will do or say anything to get their hands on New Zealand's finances.
No comments:
Post a Comment