Monday, August 28, 2006

So which economy do you want to live in?

Hattip: Scoop
The Canterbury Manufacturers Association has recently gone on the offensive again against companies like IceBreaker that are proudly New Zealand owned and operated - at least as far as their high wealth operations are concerned.
The CMU is highly critical of the fact that they offload their low-wealth operations like the actual clothing manufacture onto countries like China, while retaining the design and patent operations locally.

I love Mr Walley's (from the CMU) quote:
“Yes, they may be registered in New Zealand, their shareholders benefit as do the people working on their designs but do they provide for New Zealand’s export development or contribute all they can to a reduction in the trade deficit?”

It is extremely hard to rebut a comment when it generally says everything you wanted it to in all but tone. The real question is where do we want to compete, where do we want to be as a country? I know that I would far prefer to be supporting that New Zealand company that has made the realisation that we want the high wealth value adding jobs in this country. And offload the menial, likely to be replaced through capital investment jobs elsewhere.
How are we going to reduce our trade deficit? Through increasing our labour productivity levels - something really not particularly possible in the jobs that Mr Walley wants to protect. But if the profits from IceBreakers Chinese operations are repatriated to here, then it is something highly possible. Mr Walley doesn't seem to understand that it is far better for our trade deficit to have each New Zealander earning the trade dollars from "10" Chinese workers, than only pulling in those dollars for their own work.

Mr Walley continues with "“‘Buy Kiwi Made’ is important in promoting New Zealand’s export and economic growth, it also means that you just might be buying your job, you are certainly supporting New Zealand values.”"
The question is which job do you want, and do you want your children to have - clothing design and architecture, or sitting behind a sewing machine?
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