Exporters want strong economy over low kiwi

Software exporters are benefiting from the depressed New Zealand dollar but they'd rather have a strong economy.

Software exporters are benefiting from the depressed New Zealand dollar but they'd rather have a strong economy.

Peace Software chief executive Brian Peace says while the dollar is good for company overheads, the state of the economy is not projecting a good image for New Zealand business overseas.

"It's disturbing that overseas investors are not finding New Zealand attractive. I'd prefer it if New Zealand was seen as having a strong economy because no one takes products coming out of a weak economy seriously."

Auckland-based Peace produces software systems for utilities, with 60% of its revenue deriving from exports to North America.

"Our value proposition is in our technology and our experience with deregulation of the utilities industries. That's one thing I thank the government of the day for. [New Zealand was] the first to deregulate and it gave us a change to get ahead of the rest of the world."

Peace says another concern with the low Kiwi dollar is its effect on the brain drain.

"I know it's a bandied-about term but if you're young and ambitious [the economy] makes it more likely you'll look off-shore. That's why we work very hard to retain people."

As an example the company flew 170 employees to Tahiti for a four-day holiday last week. The trip was to reward staff for completing a project for Canadian customer BC Gas, says Peace.

He says ideally he'd like to see the Kiwi dollar sitting between $US0.50 and $US0.55. "That would mean we're seen as a growth economy."

The Simpl Group managing director Bennett Medary says the exchange rate is associated with a bad economy and that's driving people with skills away.

"Skills that we could have used to develop exports so ultimately we're not winning out of it."

He says the low dollar makes its cheaper for the developer and systems implementer to provide consulting and services overseas but it's not a strong factor in getting off-shore work.

"People are more comfortable doing business with people that live next door, that they know, that they can engage with at any time. It takes a lot of additional benefit for people to use folk from the other side of the world.

"Our work overseas is based on our own value and strategies - not because New Zealand is the place to go for cheap labour."

Medary says at the commodity end of the software development market the exchange rate becomes much more important.

For Auckland health systems provider Orion Systems, the low dollar has meant increased profit enabling the company to take on another 40 people by next February.

Director Ian McRae says since the New Zealand dollar has gone down the company is earning about 50% more.

"Meanwhile, the price of systems by US health vendors coming down here have jumped up 50%," he says.

Christchurch-based Canterbury Voice Release International, which has developed a voice-activated target release machine for shooting, is also enjoying the dollar's current level.

Marketing manager Bruce Rickard says the company is earning an extra 22% profit compared to when it started exporting about 16 months ago. The company sells its device to Australia, the UK, US and Scandinavia.

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