Press Release – New Zealand Labour Party
The crippling exchange rate has caused 192 hard-working Kiwis to lose their job as Summit Wool Spinner is sold, says Labours Finance spokesperson David Parker. Summit is being sold by its parent company Sumitomo to Godfrey Hurst in Australia.David Parker
Spokesperson for Finance
31 January 2013
Another provincial town reeling under National’s inept management
High dollar forces Summit factory closure, 190 jobs cut in Oamaru
The crippling exchange rate has caused 192 hard-working Kiwis to lose their job as Summit Wool Spinner is sold, says Labour’s Finance spokesperson David Parker.
Summit is being sold by its parent company Sumitomo to Godfrey Hurst in Australia. The chief executive has said the high New Zealand dollar is a major reason for this.
“Summit employs 192 people and they are all being made redundant. In Oamaru tonight there will be worried discussions over the dinner table and many sleepless nights. Many will likely head to Australia as in Greymouth after the closure of the Spring Creek mine.
“I would like to thank the outgoing Japanese owners of Summit, who have supported Oamaru and helped local workers improve the productivity of the Oamaru factory. Despite their efforts, with no help from this government on the exchange rate, one of the largest employers in Oamaru has been forced to give up.
“This will obviously have dire effects for those working at the factory, as well as for Oamaru. It is a further blow to Otago, which lost Hillside workshops just a month ago.
“The current owners and workers of Summit are yet more victims of the high dollar, which is crippling exporters and costing jobs. Last year at least two companies a week announced redundancies, and this year is following the same trend.
“This cannot go on. On Monday chief executives of major Kiwi companies told the Parliamentary Inquiry on Manufacturing that the high dollar is forcing them to cut jobs, reduce investment and, in some cases, head offshore or shut down.
“Our manufacturing sector outside primary industries is being hollowed out and the dollar is to blame. But National refuses to consider any changes that might lower the exchange rate.
“This is despite unemployment at 13-year highs, dropping exports and a $10 billion external deficit, which is worse than every developed country bar Greece.
“The Reserve Bank’s tunnel vision mandate requires it to give primacy to inflation ahead of the currency, jobs and exports. This pushes our overvalued and damaging exchange rate to the back of the queue. We must give the Reserve Bank a 20/20 perspective on the economy.
“Labour has long argued that the Reserve Bank must be required to give proper weight to other important issues such as the exchange rate and jobs. That would help our exporters and manufacturers and allow them to keep jobs, pay higher wages as well as earn vital export earnings,” says David Parker.