Farra Engineering worker Terry Smith talks to Prime Minister John Key when the Mr Key visited several divisions of the 149-year-old engineering firm in Dunedin yesterday. Photo by Craig Baxter.
Manufacturers can expect little respite from the crippling
strength of the New Zealand dollar, while tax incentives to
boost performance are not on the Government's radar.
Prime Minister John Key spent about an hour at Farra
Engineering in Dunedin yesterday, with chief executive John
Whitaker, touring its design, stainless steel and fabrication
The divisions collectively produce high-end niche exports
such as maintenance units for ultra-high-rise buildings and
aluminium smelters worth millions of dollars, trucks for
carrying explosives around Australian mines, through to
recent large-tank fabrication for Speight's brewery and other
smaller domestic contracts.
Mr Key was impressed with the array of designs under way,
describing the work as that of "specialists" in what is a
globally competitive niche market.
Recent data showed manufacturing was one of the hardest hit
sectors in three consecutive years of decline in the number
of all businesses around the country, with 3800 businesses
lost in the year to February. About 950 of those were in
Manufacturing business numbers have been in decline for a
sixth straight year.
Mr Key said business numbers were not necessarily
representative of actual job numbers, and repeatedly cited
opportunities in the more than $20 billion being spent on
infrastructure and rebuilding work in general in
"There is no crisis in manufacturing; but some are doing
better than others," Mr Key said.
The strength of the New Zealand dollar has been squeezing
many exporters' margins for more than two years now, with
calls for a change to Reserve Bank policy.
However, Mr Key expected "few changes" from new Reserve Bank
Governor Graeme Wheeler, nor to see him divert from his
predecessor's "orthodox" management of the interest-driving
official cash rate having been on containing inflation within
a 1%-3% band.
When asked if manufacturers could expect respite in the form
of tax incentives, Mr Key said there were no such plans, but
did not rule out consideration in time for next year's
• KiwiRail's Dunedin workshops in Hillside Rd have been for
sale since April. Mr Key said several parties were
considering purchase of parts, or all, of the operation.