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High dollar nature of sector, says Joyce

Published: 9:18AM Tuesday January 29, 2013 Source: Fairfax

Economic Development Minister Steven Joyce says the manufacturing sector is not in crisis but admits some companies are having a tough time.

Despite his personal relationship with some of the businesses involved in the manufacturing inquiry held by opposition parties yesterday, Joyce said the dollar was high and that was "the nature" of the sector.

Bruce Moller, chief executive of Taranaki medical bed manufacturer Howard Wright, told the inquiry his company was given advantages when bidding for public sector contracts in New South Wales, but not here.

Joyce was a director on Howard Wright's board for almost a decade, resigning shortly after National formed the Government in 2008.

Australian states made adjustments to the public sector tender process to benefit small and medium sized enterprises, including New Zealand companies.

Moller said that while some New Zealand Government departments gave support, others worked in "complete silos".

"We might find we're working on something where there's absolutely no consideration that you're a New Zealand company, creating jobs," he said.

Labour, Green, NZ First and Mana organised yesterday's inquiry.

This morning Joyce said suggesting the Government should influence the US dollar exchange rate was a "fools paradise".

The last time a Government interfered with the exchange rate was in the 1970s and it did not turn out well, he said.

"There are a large number of companies that are doing very well ... that's not to say the others are doing anything wrong but they're all in individual industries," he told Radio New Zealand.

The high exchange rate was negatively impacting some companies but had a positive effect in terms of cheaper imports, Joyce said.

"[Manufacturers are] all in different situations and it depends on their exposure to different exchange rates.

"It is mixed depending on who you are, and in fact it seems to be mixed a little bit in terms of who you talk to at different times."

When the inquiry was organised last year, Prime Minister John Key labelled it a "political stunt" because no Government parties were invited to take part.

Yesterday, Keith Whiteley, managing director of Christchurch-based CWF Hamilton - famous for the Hamilton Jet - said that while the company had a world-leading market position, if the dollar stayed strong for another two to three years its profits would be wiped out.

"We think it's time that the Government did its bit," Whiteley said.

"The single monetary policy goal of targeting inflation alone, while relevant in the 1980s when inflation was out of control is now past ... its use-by date.

"Exchange rate consideration must become part of the mix."

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