Manufacturers say policy needs a few tweaks

Kiwi manufacturers will welcome some of the ideas in Labour's manufacturing policy but some areas need more work, ManufacturingNZ executive director Catherine Beard says.

Labour leader David Cunliffe on Thursday launched the policy, which includes proposals for tax deferrals to companies in advanced manufacturing, a change to monetary policy, research and development tax credits for all sectors and the Buy Kiwi Made policy.

Mr Cunliffe said the plan would create better jobs and higher wages.

Ms Beard said she was pleased Labour had picked up on some of the recommendations in ManufacturingNZ's recently-released Castella report, New Zealand Manufacturing Sector: It's Dynamics and Competitiveness.

''In particular, there are big opportunities to build bigger and more internationally competitive companies by involving them in larger domestic projects through Government procurement.

"This requires whole-of-life value to be factored in instead of just focusing on the lowest price with little regard to quality.''

Accelerated depreciation might be welcomed by some manufacturers, but the industry preference was for tax reform across the board, to make businesses competitive internationally, she said.

Manufacturers would like a lower dollar but they were cautious about suggesting any change in the mandate of the Reserve Bank.

''There are other things that can help take the pressure off the dollar, such as reducing debt and increasing savings.''

Addressing the skills shortage was something manufacturers would like to see and ManufacturingNZ would welcome seeing Labour's policy on the issue.

Manufacturers said talent-driven innovation was their number one competitive advantage, Ms Beard said.

Mr Cunliffe said the Buy Kiwi Made policy would set a target of keeping another $200 million a year of government contracting at home rather than sending the work overseas. About 2000 jobs would be created by the policy.

''This Government's attitude to procurement is: cheapest is best, even if overseas companies win the contracts.

"The repeated failures of the KiwiRail wagons show how wrong they are. Kiwi manufacturers are among the best in the world and deserve a level playing field for procurement contracts,'' Mr Cunliffe said.

Labour's policy was welcomed by the Engineering, Printing and Manufacturing Union, the Council of Trade Unions and First Union.


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