‘Manufacturing the key to employment’

Press, 14 June 1984, Page 9

‘Manufacturing the key to employment’

Manufacturing was the key to economic growth and employment in New Zealand during the 1980 s, said Sir Robertson Stewart, executive chairman of P.D.L. Industries, at a public meeting in Christchurch last evening. It provided employment for 24 per cent of the workforce and was the economic sector which offered the greatest opportunity for future employment.

It saved overseas funds by earning 25 per cent of New Zealand’s export income and made available to the consumer many more products than exports would otherwise pay for, he said. Sir Robertson was speaking on “The growth of the manufacturing component in New Zealand” at a public meeting of the Canterbury branch of the New Zealad Geographical Society. He said that during the last 20 years the manufacturing industry had become a vital component of the economy, outstripping the growth of other economic sectors. In 1973 manufactured exports comprised 11 per cent of New Zealand’s

total, but this had risen to 25 per cent by 1981. increasing seven and a half times in volume.

Export incentives had been an excellent investment for New Zealand, he said. In 1981 manufacturing exports totalled $1.45 billion and export incentives made up 15.3 per cent of this total.

He emphasised that contrary to public belief they were not a handout of taxpayers' money but an exemption from tax, dependent on results.

“New Zealand manufacturers are faced with high internal costs, in particular for wages, raw materials, and social security. Consequently the provision of export incentives redresses the balance and allows New Zealand to compete on a more equal footing with other countries, particularly Asian countries," he said. " “If New Zealand companies did not have to pay the relatively high rate of company tax, the export incentives would be less essential."

The price and wage freeze had encouraged companies to find better and

more effective ways of producing their products, he said. As a result they were better able to cope with competition both in New Zealand and overseas.

The phasing-out of export incentives to Australia meant New Zealand manufacturers would have to further consider their efficiencies even though it was cheaper to manufacture here, pay freight costs, and still be competitive in Australia.

Sir Robertson believed the pressure for redundancy payments had had a bad effect on the workforce, creating an attitude of nonemployment. Many employers saw difficulties in long-term engagements and there was a tendency for overtime to be worked instead.

Voluntary unionism created difficulties for the manufacturing industry because of the trade union movement’s desire to object to its introduction, he said. However, the actual effect on the industry was minimal "as good companies were able to carry on as though nothing had happened.”