Awards, solutions and great advice to feature at SouthMach
New Zealand’s dynamic manufacturing sector faces challenges and exciting opportunities. Engineering News spoke to Catherine Lye, CEO of Advancing Manufacturing Aotearoa (AMA) ahead of the upcoming industry trade event, SouthMach, which includes the highly anticipated AMA Showcase and Manufacturing Awards.
Ask Catherine Lye what’s keeping her awake at night when she thinks about the future of manufacturing in New Zealand, and she not only sees the problem but has got the solution.
“There are key issues, in particular critical skills shortages like CNC machinists, engineers (especially AI, robotics and design) and fabricators. It’s more pronounced in the regions so there’s an ongoing need to review immigration settings so we get the talent we need,” says Lye.
“At the same time, we need to be recruiting locally. There’s been a lack of investment in recent years into this but a focus on improving education pathways, while using skilled Imigrants to mentor young people.”
Lye says removing disincentives in education for young people to follow a vocational pathway is critical in Aotearoa. Apprenticeships and trades pathways via polytechnics are still not as valued as university.
“Reframing how we view success in education would contribute significantly to addressing critical skills gaps in manufacturing.”
And the change needs to start at the top, with Government partnering with the sector.
Its recently announced Government’s Going for Growth agenda should consider things like aligning investors with the market, such as making it easier for Kiwisaver funds to invest more locally.
She argues that manufacturing businesses and Kiwisaver are a natural fit.
“Businesses need capital to drive expansion and build an enduring legacy. It’s essential to engage investors who are looking for long-term dividend returns and who can add value.
“This approach would better align investment with the development of domestic talent and capability, fostering sustainable growth. Simplicity Private Equity Fund is an example of a local investor innovating in this regard. The challenge is finding ways to unlock more potential from Kiwisaver to support this type of investment.”
Government can support local
Lye says Government procurement policies can better support domestic manufacturers by scoring tenders based on the social return on investment.
“This includes factors like capability development, employment opportunities, wage growth, and revenue generation.”
Support from our own Government acts as a springboard to international expansion, she says.
“The stable revenue from these contracts, along with the credibility that comes from working with the New Zealand Government, helps companies gain a foothold globally.”
Tax tweak
Accelerated depreciation remains one of the most consistent requests from manufacturers, according to Lye.
“This tax incentive would allow businesses to reinvest more rapidly into equipment and technology, boosting productivity and enabling manufacturers to stay competitive in a challenging global market.”
Alongside this tax tweak, an allocation of the R&D Tax Incentive scheme to manufacturing process innovation projects would a “brilliant” complement.
“We need more rapid adoption of AI and robotic automation – there is a high element of unknown and risk associated with these projects and a lack of internal capability, particularly in the SME enterprises. Being able to claim expert consultancy/contractor costs for these projects against RDTI would certainly encourage faster adoption,” Lye says.