By Sarah Falson
AUCKLAND: The Green and Maori Parties of New Zealand have reacted negatively to news that Fisher & Paykel will relocate two of its Auckland-based washer factories to Thailand, culling 350 jobs, due to tax incentives.
According to reports, F&P will enjoy an exemption from corporate income tax for the first eight years, along with a 50 per cent reduction for the next five, by manufacturing in Thailand instead of New Zealand.
Further exemptions offered by the Thailand government include double tax deductions on transportation, electricity and water costs for 10 years, and exemptions on import duties for machinery and duties for raw or essential materials used in manufacturing of export products, according to Stuff.co.nz labour and location costs are also cheaper in Thailand.
Various New Zealand government parties have posted their concern about the manufacturing plants’ move on Scoop.co.nz, an independent news website, including the Maori Party.
“The loss of 350 jobs will have major repercussions for whanau who are already strapped financially due to constantly rising living costs from petrol to mortgages,” said member of parliament for Tamaki Makaurau, Dr Sharples.
“The Maori Party has been contacted by employees living in South Auckland who are shattered at the prospect of being laid off and the imminent threats this places on their whanau [extended famimly]. This is a population who are already vulnerable due to low income and rising levels of hardship.”
The Green Party has also voiced its displeasure at the decision.
“This announcement comes on the same day that the Reserve Bank raised the cash rate by another .25 per cent. That will, in turn, increase the value of the NZ dollar and put further pressure on the New Zealand manufacturing sector,” said Green Party co-leader and economic trade spokesperson, Russel Norman.
Green Party economic development and employment spokesperson, Sue Bradford, said: “Fisher & Paykel is seen as an iconic NZ manufacturing company. I am therefore very disturbed not only to hear today’s announcement of 350 job losses, but also the statement of F&P managing director Jon Bongard when he says there are no guarantees the rest of the company’s manufacturing jobs won’t one day also be moved off-shore.”
F&P announced last Thursday that its Auckland-based facilities, responsible for manufacturing F&P Smart Drive and AquaSmart washing machines and clothes dryers, will both be moved to Thailand, saving the company an estimated $10 to $15 million per year in manufacturing costs.
F&P CEO and MD, John Bongard, said manufacturing costs in New Zealand were creeping higher each year, forcing the company to set-up shop in low-cost Asia.
"The decision to move the laundry plant out of New Zealand wasn’t one that was taken lightly,” said Bongard.
“Most of our competitors supplying the Australasian market do so from facilities in low cost Asian countries which offer generous manufacturing incentives.”
Bongard said the move is logical considering the high costs the brand pays to maintain its New Zealand facilities.
“Also the environment in New Zealand for our type of manufacturing operation has deteriorated due to a combination of factors, such as high interest rates, persistently high exchange rates and some trade and tariff policies.
“Our laundry margins have suffered considerably over the past four to five years. Without this relocation to Thailand our continued future in laundry design and manufacture would be doubtful.”