Government blamed for manufacturers decline

Union and employers have called calls for the NZ government to do more to help the manufacturing sector after the Australian government helped Norske Skog upgrade a paper mill in Tasmania while the company axed jobs in New Zealand. 

According to Norske Skog, the company will halve its production at the Tasman mill in Kawerau.

The Engineering, Printing and Manufacturing Union (EPMU) estimated that 100 of its 290 jobs may go.

It was revealed yesterday that the Australian Federal government and Tasmanian state government were subsidising an A$84 million (NZ$107m) upgrade at Norske Skog's Boyer mill, reports stuff.co.nz.

EPMU national secretary Bill Newson said the union and employers wanted the New Zealand government do more to help retain manufacturing jobs.

"Employers are regularly saying to us that one of their primary concerns is there is no government strategy for New Zealand jobs," Newson said.

Labour and the Greens estimated that between 20,000 and 25,000 manufacturing jobs have been lost since National came to power in 2008.

Greens co-leader Russell Norman said the government had to encourage companies to invest in research and development and upgrade their technologies.

"This Government doesn't really understand that, it just takes a laissez faire approach and if you do that, you just end up going backwards," Norman added.

Labour's economic development spokesman David Cunliffe said governments around the world recognised the importance of having high-value manufacturing at the core of their economies.

Cunliffe went to say "but ours doesn't. The national government is sitting on its hands while iconic companies like Norske Skog Tasman are scaling back in the face of government-assisted competition and companies like Fisher and Paykel are being sold out from under us."

Economic development minister Steven Joyce said the newsprint industry was in decline because of modern technology.

Norske Skog volumes were declining faster than the company had expected.

"The reason they are maintaining volumes in Australia is because the Australian mill is closer to the newsprint markets that are still left. It doesn't have much to do with the Australian Government subsidies," Joyce added.