The news that HamiltonJet is considering moving some of its manufacturing offshore owing to its difficulty in finding skilled workers is an indictment of the Government’s lack of support for NZ manufacturers.
This is part of an industry worth $24.3 billion to the NZ economy and an example of a NZ manufacturer and exporter with an enviable reputation, yet it is being hampered by the Government’s poor economic policies.
The issue of the lack of access to talent is having a massive impact on businesses across all sectors, but particularly on manufacturing where critical skills are essential. According to Dieter Adam of the Manufacturing Alliance, access to skills and people is the most significant handbrake on manufacturers and their ability to supply.
A number of manufacturers that I have spoken to have said that the issue of labour is resulting to them either having to significantly delay fulfilment of export orders or losing contracts all together. When Managing Director Gordon Sutherland of AW Fraser describes his role as ‘rationalising manager’ because he doesn’t have enough staff to meet export orders, you know NZ is in trouble.
Not only do we need more focus on manufacturing apprenticeships to grow the talent pool, we also need to adjust our immigration settings to allow specialist manufacturing personnel to come here. This is the principal reason given by HamiltonJet that is impacting their competitiveness.
National has already committed to implement a number of tax initiatives, including instant depreciation of up to $150,000 per asset and doubling the depreciation rate for businesses to invest in new plant equipment and machinery to improve productivity and to encourage automation as much as possible, so that scarce staff can be redeployed where necessary.
The second most important issue affecting manufacturers is the cost of electricity. Again through the Labour Government’s poor economic policies, we are seeing rapid increases in the cost of power and a delay in building future capacity.
As an example, New Zealand Steel announced in late April that it is potentially facing a 348 per cent increase in charges because of how electricity transmission costs are allocated. It is absolutely vital that NZ manufacturers have access to consistent and reasonable electricity pricing.
National believes in supporting the NZ manufacturing sector. Our number one priority is to retain great businesses like HamiltonJet and second to grow new businesses over time.
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