Through the lens of C.E.R.

Press, 17 June 1983, Page 12

Through the lens of C.E.R.

“A Comparison of New Zealand and Australian Manufacturing Industries, 1978-1979,” published by the Department of Statistics, is just what its title says it is. According to the preface by the Government Statistician, Mr J. H. Darwin, the negotiations over Closer Economic Relations and the signing of the Treaty, combined with the release of information by both countries on economic censuses of manufacturing for 19781979, prompted the publishing of the bulletin. The idea on which the bulletin is based is to specify each industry, to determine the number of establishments, the number of people employed, the salaries and wages paid out, the business turnover, and the value added by the business. These figures enable some interesting comparisons.

In the year for which the details have been given, 298,331 people were engaged in manufacturing in New Zealand and 1,444,630 people were engaged in manufacturing in Australia. The New Zealanders were paid in their own dollar $2.3 billion and the Australians received $11.6 billion of their dollars. The turnover for all manufacturing in New Zealand amounted to $10.9 billion and the added value. Added value is defined as the sum of salaries and wages paid, employers’ contributions to superannuation schemes, depreciation, indirect taxes, and operating surpluses or losses, less the subsidies paid in New Zealand. This sum amounted to $3.5 billion. The bigger Australian manufacturing industry had a turnover of $54.9 billion and an added value of $22.1 billion. The Australian definition of “added value” is turnover plus the increase (or less a decrease), in the value of stocks, less the value of purchases and selected expenses. One table breaks down the percentage share of total manufacturing activity and the difference in the scales of industries stands out even more clearly. Out of every hundred people employed in both countries, only in the manufacturing of butter, cheese, and milk

products does New Zealand employ 50 of them. If another dairy industry classification is taken, that of processed milk and cream, New Zealand employs 12 and Australia employs 88 out of the 100. The industry with the next highest number of New Zealand employees out of 100 is leather tanning and fur dressing. New Zealand employs 45 and Australia 55 out of every 100. In some instances, Australians hold all but complete sway in manufacturing and the New Zealand share, measured by the number of people employed, is negligible. Not the least useful purpose of these statistics will be that they will provide a measure for monitoring what happens under Closer Economic Relations. One aim of C.E.R. is that each country will continue to do what it is best at doing. The breadth of the classifications may mean that this cannot be measured precisely. Paint and varnish manufacturers, for example, would be classified together, and if one manufacturer brought out a highly specialised product which was used extensively in New Zealand and in Australia, this would not show. However, in broad terms, the system will be able to measure some effects of C.E.R.

Later comparisons should also indicate whether firms shift to the larger market, which is one of the expressed fears about C.E.R. Apart from specialisation, another aim of C.E.R. is to make manufacturers better able to compete in third markets. Although the figures are a pointer to the relative productivity of industries in the two countries; the system used in the bulletin will not show how they will fare as exporters to other countries. The Statistics Department has done well in laying out the comparisons in the bulletin. There is still plenty that needs to be done, and the Statistics Department is showing a useful interest in information. that will monitor the effects of C.E.R. and help businesses that want to make the best of the relationship.