Random muses, rants and raves from a middle aged Kiwi that needs to vent!
Thursday, 14 March 2013
A Parody: The entire country has now been declared a high New Zealand Dollar zone
The entire country's SME sector has officially been declared a High New Zealand Dollar Zone (HNZDZ).
The announcement was made at a Penrose fabrication factory by Minister for Economic Development Steven Joyce this morning.
Previously Manufacturing and Export Education had already been declared to be in HNZDZ.
Tourism and Services have now been added to that list.
The declaration means that SME exporters in these sectors will be entitled to receive Government assistance.
The HNZDZ is predicted to cost the economy $5 billion as hard-hit export dollar earners struggle to earn enough foreign exchange to allow the country to pay its residential mortgages bills.
Fabrication plant owner Mr. Going Broke, with 70% of turnover coming from exports, said the declaration was a welcome recognition by the Government of their struggle.
"When everyone recognises you're having a hard time you probably feel a little bit better about yourself, whereas if there's not that recognition there's probably people out there that think it's their fault and they just need to harden up.
This shows that they've done what they can but they're dealing with something that's beyond their control."
The hardest hit were tourism operators. Some were discounting hard, but many operators were already working on very tight margins.
The other key issue was a lack of export and R&D tax breaks, compounded by the proposed car park and iPad fringe benefit tax compliance costs.
"Normally in a High NZD situation you'll find maybe the local economy is doing alright, and your input costs such as imported fuel and raw materials are decreasing, but this is not the case currently."
Extra Government funding will be available to manufacturing, tourism and export associations who work closely with SMEs, providing support and guidance.
There will also be SME exporter assistance payments - equivalent to the unemployment benefit - available from Work and Income to those in extreme hardship.
"Many SME people can be reluctant to ask for help, but it is important for them to know that support is available," Mr Joyce said.
"This is a difficult time for SME families and they need to know that the Government and all New Zealanders are behind them.
"Some break in the high NZD is forecast next year, which is welcome news. However we will need more than this to help prepare for our economic future.
"Parts of the Agriculture sector are also very HNZDZ, in particular beef and wool. We are keeping a close watch on all further sectors."
SME owners should contact their accountants or the IRD if they need help or flexibility with making tax payments, Mr Joyce said. Standard hardship assistance is available from Work and Income.
SME spokesperson said he could not recall a time when the entire economy had been in HNZDZ.
He said Government financial assistance would be a drop in the ocean compared to what SMEs had lost or were going to lose but the emotional support the declaration offered was very welcome.
"These are people that are suffering through no fault of their own, through an act of God. We have real concerns about the emotional stress and difficulties that many families are coping with and that's the predominant benefit that comes from a HNZDZ declaration.
"It doesn't mean any money directly to SMEs, it's just about having some competent, expert people out there who are able to be at the end of the phone, or to sit around the industrial tools lathe and talk it through."
Forex specialist J. Key said yesterday that NZ had not experienced a HNZDZ so severe for 20 years, and warned that such events could become more frequent.
Note: a parody of todays (15/03/13) article in the NZ Herald on the drought declaration at http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10871403