Growing exports

January 10th, 2012 at 12:00 pm by David Farrar

Stuff reports:

New Zealand First leader Winston Peters has warned that planned Foreign Affairs job losses and the closure of overseas posts will cost more in the long run than they save.

A State Services Commission report last year said the ministry was looking at slashing 200 jobs out of almost 1000.

An announcement on the details is expected soon.

Peters, a former minister of foreign affairs who negotiated a big increase in funding for the portfolio, said a “slash and burn exercise” would seriously affect this country’s overseas trade.

He said the move was a “serious, retrograde step” at a time New Zealand was desperately trying to increase its export trade.

Phil Goff has also joined in the bleating, arguing that more bureaucrats in will increase exports. If only, it was so simple.

As it happens exports have been growing quite nicely. In the last three years, they have increased 15.1% to $46.1b. That’s pretty good considering the wobbly global economy. Why have they increased?

Well exports to have increased 169.5% to $5.6b. The dollar increase of $3.5b makes up 59% of the overall increase in exports.

It was three years ago we signed a with China. An agreement that Peters as Foreign Minister not only refused to vote for, but actively campaigned against with a newspaper ad campaign urging people to sign up in opposition to the FTA.

So Peters’ record is having opposed the China FTA which saw exports to China increase 170%, and instead his solution is more bureaucrats in MFAT.  I doubt I have seen a more moronic economic prescription in recent times.

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26 Responses to “Growing exports”

  1. BeaB (1,948 comments) says:

    “So Peters’ record is having opposed the China FTA which saw exports to China increase 170%, and instead his solution is more bureaucrats in MFAT. I doubt I have seen a more moronic economic prescription in recent times.”

    As always you hit the nail on the head.

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  2. Murth (26 comments) says:

    Although you have perfectly illustrated the case for why we need a robust and effective MFAT. MFAT officials are the ones that put in the work to get a FTA with China which we are now reaping the benefits from. Cut officials and negotiations on other FTAs will likely take longer or not advanced at all.

    [DPF: I don't think you will find that those working in the trade negotiations area will be significantly affected. It is more closing some embassies in Europe, as most of our relationships are now at the pan-European level, rather than individual countries]

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  3. MarkF (89 comments) says:

    Mr Jan Trotman – 66 – Kept man of St Marys Bay. Pray tell me why are we still giving this man oxygen?

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  4. Paulus (2,296 comments) says:

    He gets air space because the MSM still love him to shit stir.
    He is no good for anything else.
    We will see his profile rise everytime he shits.
    It is irrelevant that he has anything worthwhile to contribute to New Zealand, but he makes copy, which is all a newspaper needs to sell newspapers – its their sole job.

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  5. MarkF (89 comments) says:

    Point taken!

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  6. Kimble (4,092 comments) says:

    Cut officials and negotiations on other FTAs will likely take longer or not advanced at all.

    Wouldnt the nature of the jobs being cut matter? Do you know what they are? Do you care to know?

    Or are you arguing (with Peters and Goff) that EVERY job is as important as every other?

    Fuck it then, lets hire thousands of Indians to work for MFAT and just watch the FTAs roll in the door!

    [DPF: I have faith that the Secretary of Foreign Affairs has made rational decisions based on where savings can be made without reducing our capacity in priority areas]

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  7. tvb (3,941 comments) says:

    A 20% cut in staff is very significant. I cannot see the point of the Swedish embassy

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  8. Jimbob (639 comments) says:

    Winston Peters is past it. He makes numerous statements to the media in which you could drive a dump truck through.
    Winston, your methods that worked a decade ago are now seen as pathetic and boring. Really you can have a good guess at what is in his press releases, as he is like a broken record.

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  9. Richard29 (377 comments) says:

    Good point. Althought to be fair Winston’s criticism was not that exports wouldn’t increase but that the agreement would not benefit New Zealand because China’s unfair advantages (labour prices etc) would see us getting swamped with imports that far outweighed our exports and screwed the Balance of Payments.

    So… I checked on stats NZ:
    http://www.stats.govt.nz/browse_for_stats/snapshots-of-nz/nz-in-profile-2011/imports-exports.aspx

    Our imports from China are bigger than our exports to them (and have been ever since they started manufacturing pretty much anything with a circuit board) but since 2005 our imports have grown by 167% but our exports have grown by a fantastic 259%. If we maintained that same ratio over the next 5 years we might even be exporting more than we import (heaven forbid).

    I think it’s fair to say that Winston has been proven wrong.

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  10. Monty (947 comments) says:

    An irrelevant fool desperate for media attention, promoting policies he does not believe in, but seem to pander to the mainstream media clowns equally desperate for attention and circulation. The Kept pensioner of St Mary’s Bayis well past his use by date and it is the foolish 7% who voted for him is the sad belief that this corrupt prick wil keep the government honest. That is laughable – Winston – the liar – and theif, and proven corrupt politician keeping others honest. Blogs like whaleoil and Kiwoblog do that already and much more effectively than this prick could ever wish to hope.

    -

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  11. BlairM (2,266 comments) says:

    There are a bunch of Embassies which are simply not needed. Certainly not necessary to have one in Sweden. I’d even argue the Canadian one is a waste of time. I can’t quite believe that this of all issues is making the opposition mad in the middle of people’s summer holidays. And it’s ridiculous to assume that we can only export stuff if we have a vast excess of bureaucrats attending cocktail parties with other bureaucrats in far-flung places.

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  12. Monty (947 comments) says:

    on another point and one which has largely been ignored, the 200 redundancies will come from in part at least from MFaT admin staff from NZ but based in embassies around the world. These admin workers from NZ (with additional salaries, travel costs (at business class mind you) accommodation costs and what ever other costs there are associated with a overseas placement) doing a job that just as easily can be done by a local person at a fraction of the cost. (and possibly doing a better job with better local information)

    Sort out that and there will be no loss of export revenue, international relations. But that is not the news and facts that should be reported as it makes excellent business sense.

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  13. backster (2,000 comments) says:

    “TVB….”A 20% cut in staff is very significant. I cannot see the point of the Swedish embassy”

    Unless of course you were a Prime Minister who needed some-one handy to arrange your regular ski-ing holidays.

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  14. Oskar (33 comments) says:

    The other point to keep in mind is that trade is only part of the MFAT responsibility.
    The organisation that is primarily responsible for helping individual businesses is NZ Trade and Enterprise.
    NZTE describes the different roles in the trade area as follows

    “New Zealand Trade and Enterprise and the Ministry of Foreign Affairs and Trade are sometimes located in the same
    office in international markets, but they have quite distinct roles.
    In summary, MFAT opens the door to foreign markets by overcoming or reducing trade access barriers. NZTE helps
    New Zealand businesses get through the open door, by providing export development consultancy services.”
    (see http://www.nzte.govt.nz/About-NZTE/Pages/How-NZTE-works-with-MFAT.aspx)

    MFAT describes its role as follows:
    “The Ministry is the Government’s lead source of advice on foreign and trade policy, on international climate change
    negotiations, diplomatic and consular issues, and on international development assistance. We also provide legal advice
    on international issues and are the formal channel for the Government’s communications to and from other countries and
    international organisations.
    Internationally we work to ensure that New Zealand’s voice is heard, that our security and economic interests are
    advanced and protected, that we contribute to sustainable development in developing countries, and that the rights and
    safety of New Zealanders abroad are protected.”

    So the trade side they only look after bi-lateral and multi-lateral issues – the big picture stuff.
    They also deal with a host of other things – and its some of these that maybe questioned.

    Its also worth noting that over the last decade or so many other Govt Ministries have had their people assigned to different embassies around the world (according the MFAT list of NZ representatives overseas there are people from NZTE, Immigration, Defense, Police, Customs, Education, Science and Technology, Treasury, Agriculture, Tourism) so the role of MFAT in these areas surely is diminished.

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  15. joana (1,983 comments) says:

    So many personal attacks lowering the tone and advertising for all to see , the inability of so many to actually discuss a topic.

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  16. Murth (26 comments) says:

    If it is just consolidating European operations because issues are now dealt with more at a EU level (or it is easy enough to drive over the border in smaller landlocked nations) then I could support that. However, it is an assumption that this is what it will be until we hear details. MFAT do really important work and I’d like to see how they can continue to represent our interests abroad with 20% fewer FTEs. I’m not saying it isn’t possible, but you have to expect some diminished capacity in our foreign affairs as a result. You can make the argument that we invest too much, but I would counter that we are a small isolated country reliant on trade and therefore the investment in MFAT (and foreign affairs and trade more broadly is money well spent).

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  17. thor42 (773 comments) says:

    Not only do I fully support these proposed cuts, but I would also support massive cuts in the NZ Defence Forces. A commenter on WO’s blog said that there are about 80+ “squadron leaders” for naff-all squadrons. There’s a similar situation in the other armed forces as well. Looks like a massive round of cuts is well overdue for the NZDF.

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  18. Nick K (916 comments) says:

    Peters & Goff think more public servancts = more exports. Why not have two million public servants in MFAT then?

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  19. mikenmild (8,812 comments) says:

    There have been some fairly amusing comments on this thread.

    thor42 supports cuts in the Defence Force because the air force has 80 squadron leaders for a handful of squadrons. Well hello, they’ve got lots of wing commanders as well, but no wings. Not to mention the navy having more captains and commanders than ships to captain or command and the army having a clutch of brigadiers but no brigades. Ha ha.

    But my favourite would have to be DPF’s: ‘I have faith that the Secretary of Foreign Affairs has made rational decisions based on where savings can be made without reducing our capacity in priority areas’. DPF’s resurgent faith in public servants is funny on its own, but this was after bagging Peters’ comments when both have no idea of what is being cut.

    More please.

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  20. Luc Hansen (4,573 comments) says:

    C’mon MM

    You know that DPF has great faith in our public servants…

    except if they are teachers…

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  21. patrickm (2 comments) says:

    If Peters & Goff say it is wrong then based on past evidence it must be right. Two irrelevant troughers that should crawl under a rock & leave the administration of NZ to those that care & are capable of making sound decisions, not decisions based on ideology or in Peters case decisions based on personal gain aka Glen Owens, the racing industry, the fishing industry et cetera et cetera

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  22. joana (1,983 comments) says:

    And Key’s decisions are not based on ideology? Other Nat decisions are not based on ideology? Who are you kidding Patrick?

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  23. hj (5,693 comments) says:

    Winston was right about one thing:

    There was a sharp spike in immigration in 2001, 2002 and 2003 and, said working group committee member Dr Andrew Coleman, it appeared that property prices did not fall anywhere near as greatly when immigration fell again.

    The report added that there was little evidence that immigration boosted local incomes. In fact, the need to build roads and schools meant that net migration contributed to the national deficit.
    http://www.stuff.co.nz/business/4622459/Government-policies-blamed-for-house-prices

    the governments response is to blame expats returning (but not immigrants) for house price rises and to blame greenies for policies that promote urban limits.

    The issue is there Winston just picks it up.

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  24. hj (5,693 comments) says:

    Our immigration system facilitates Chinese to come here to work as bus drivers to drive Chinese. One in ten work in tourism: there’s a few votes for NZ First.

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  25. hj (5,693 comments) says:

    This is Nationals Idea of exports:

    “Chinese economy we all know about…
    Chinese government says it’s time to grow offshore…..
    Let’s take a good selection of New Zealands “products” over….
    “We’re all New Zealanders, we all love the country so I think it’s healthy for us to have the debate and make the right decisions for our country…. but hey!…. young people coming through see it as “our planet” rather than “our country”
    http://static.radionz.net.nz/assets/audio_item/0011/2385074/mnr-20100824-0842-More_than_800-million_dollars_worth_of_property_on_display-m048.asx

    Tuesday, 24 August, 2010 – 18:50
    A six-day showcase in Shanghai of more than $800 million worth of premier New Zealand property is generating “serious interest” from specially invited Chinese VIPs according to the organisers, Harcourts’ franchise Cooper & Co.
    http://www.voxy.co.nz/business/harcourts039-showcase-china-generating-quotserious-interestquot/5/60035

    Vote NZ First.

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  26. Wendy (1 comment) says:

    Picking up on Monty’s earlier comment about job losses coming in part from NZ admin staff based around the world. Contracting out of consular services could adversely affect the travelling public when things go wrong, which on the face of it appears to be incompatible with the Vienna Convention on Consular Relations 1963. While consular staff (NZ seconded or locally engaged) may not fit the SSC definition of “front-line staff”, they ARE a kiwi face for NZ travellers who get themselves into difficulty and require urgent assistance. This difficulty can include the death of family members, hospitalisation, loss of passport and legal issues. Consular staff also undertake prison and hospital visiting in some countries.

    In a number of South East Asian countries non-diplomatic contractors would have NO status with local jurisdictions and frankly these jurisdictions will not deal with them. Consequently, assistance to “distressed” NZers would be severely limited or nil!

    Wake up the travelling public! The proposed MFAT job losses could affect you, if you or a member of your family gets into difficulty overseas.

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