Latest GDP figures highlight need for more investment in manufacturing - accelerated depreciation scheme the logical next step
Friday 17 March 2023, 6:31AM
By Employers and Manufacturers Association
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The EMA says the latest industry plan to help manufacturers develop advanced capability addresses falling GDP in the sector. Specifically, more investment in software, hardware and the requisite skills, stimulated through an accelerated depreciation scheme, would generate low-carbon, sustainable economic growth.
EMA Chief Executive Brett O’Riley says the Advanced Manufacturing Industry Transformation Plan that was released this week is a blueprint for future growth for New Zealand higher-paid skilled jobs in companies that are typically export-focused, already represent 10% of the economy, and are the second largest employers of Maori and Pasifika workers.
But investing in new and enhanced technology-driven capability in the current economic climate is challenging for many of these manufacturing businesses. The percentage the sector contributes to GDP significantly dropped in the last quarter; manufacturers indicated they were not intending to invest in new technology this quarter; and with the drop in general confidence, manufacturers need more immediate and tangible help.
"The drive towards accelerated depreciation on investments in software, hardware and the upskilling of workers is absolutely essential to turn this tide," says Mr O’Riley.
"It would enable more of our businesses, large and small, to confidently invest in the advancement of their manufacturing processes, leading to better productivity and higher wages."
"The initiative should receive bi-partisan political support because advanced manufacturing ticks so many policy goal boxes, including sustainability, and enables New Zealand to remain globally competitive."
"There’s a clear case for accelerated depreciation for investment in manufacturing. We saw it work in other sectors during the COVID recovery, and it should be part of the Government’s upcoming budget to stimulate economic growth that benefits communities right across the country," says Mr O’Riley.