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Exporters and manufacturers have told a select committee that New Zealand manufacturing might soon disappear if policy changes were not made.
"If we don't act quickly and significantly we might see the end of employment in the export manufacturing sector, in terms of skills and capability loss for future generations," said John Heng, chief executive of plastic goods maker Click Clack, said.
Click Clack closed its Christchurch plant in June with the loss of 70 jobs, because of the high exchange rate.
Mr Heng and other Manufacturers and Exporters Association (MEA) members told the Parliamentary Inquiry into Future Monetary Policy Framework today that alternative measures to the official cash rate (OCR) were needed to deal with domestic inflation.
"We need to recognise the needs of all companies attempting to build export markets and provide them with more stability on the dollar and certainty of return on export sales," said shop fittings exporter Plankwall managing director Scott Yates.
MEA president John Errington was even more direct.
"If there is any real desire to fix the exchange rate, cut the OCR by 3 per cent and we will see a much lower dollar, and then use the other available tools to control the domestic sector if there is an issue," he said.
"We need to learn from the Federal Reserve."
Canterbury Manufacturers chief executive John Walley said exporters needed to be treated equally with domestic businesses, with polic ies that gave them greater support as they footed it with the rest of the world.
" Other countries have recognised the need to implement such a framework, yet New Zealand seems to see manufacturing and exporting as optional extras.
"We are losing activity to indirect policy fallout, and are now even funding our manufacturers and exporters to relocate offshore.
"We have the highest current account deficit in the developed world and no prospect of improvement unless things change."
- NZPA
