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Recent key developments in MAKE│NZ
Last week we polled you with a simple Would You Rather-
Would you rather attend an interesting talk somewhere uninteresting or attend an interesting site visit somewhere irrelevant to you?
The majority sided with an interesting talk somewhere uninteresting, though it was a tight race. This week, my question to you dear reader –
Losing time or losing the chance for growth? Which is worse?
Recent key developments in New Zealand
•“The centrepiece of Budget 2025 is Investment Boost – a tax incentive for businesses to invest in productive assets like machinery, tools and equipment.” That’s how the New Zealand government announced its Accelerated Depreciation regime in May.
What do the owners of SME businesses regard as the most important asset class to improve productivity? Well, we would never have guessed … after all, we do need to get around, sit comfortably and have a place where we can put stuff so we can find it again. That’s 63% of the investment spoken for:
Data comes courtesy of a MYOB survey of over 500 small and mid-sized enterprises from across New Zealand.
Below, we are looking at a recent initiative by the French government to – among many other things, boost apprenticeship numbers. With some success, by the looks of it. Here are the numbers for New Zealand. Added up are the main types of apprenticeships relevant for manufacturing: Aerospace Engineering and Technology; Manufacturing, Engineering and Technology; Maritime Engineering and Technology; Mechanical and Industrial Engineering and Technology (Narrow Field of Study; NZSCED).
n.b. from 1 July 2020 to 31 December 2022, apprenticeships were receiving additional government funding under the Targeted Training Apprenticeship Fund [TTAF]
Also note that, with a manufacturing workforce of approximately 250,000, there is currently one apprentice in training for every 42 workers in manufacturing.
Recent key developments in the World
• Last week we talked about France Relance, the French government’s initiative to kick-start the French economy post-COVID-19: an investment of €60 billion – plus another €40 billion of EU funds. The answer to the question of whether such an investment makes sense – which we aren’t going to go into here – also needs to consider France’s debt-levels, which are quite high:
France’s debt-to-GDP ratio, actual at 113% at the end of 2024, and projected to 2030. Source: Statista. Note the jump in 2020, when France Relance was set up
Side note: The EU’s fiscal framework, as updated in April 2024, maintains two key reference values for member states:
• The general government deficit must not exceed 3% of GDP. The current French deficit sits at 5.8%
• The government debt-to-GDP ratio should not exceed 60%
The reality is that there is any number of escape clauses and side deals to ensure that EU members deemed to be “too big to fail” – like France – can continue to operate in breach of these rules.
France Relance it its entirety is both ambitious comprehensive. We want to focus here on the part that was/is aimed at youth unemployment, which was and still is (too) high in France, especially in the North: Hauts-de-France 17.3%; Normandy 16.8%. That part was called the ‘One young person, one solution’ plan (Plan 1 jeune, 1 solution). It primarily targeted the 16-25 year age group and was also intended to educate and feed more young people into the productive sectors of the economy. The plan pursues three objectives (funding for the first 3 years):
- Apprenticeship support (Aides à l’apprentissage; €5 billion): Help young people access their first job, apprenticeship, or training opportunity. A range of measures to provide wage support for businesses taking on unemployed youth and promote appenticeships
- Provide tailored support (Accompagnement renforcé; €2.7 billion): Offer personalised pathways and reinforced support for young people furthest from employment, including those facing social or economic difficulties.
- Guide towards future-oriented careers (Formation professionnelle; €1.3 billion): Offer training in strategic sectors such as digital technology, ecological transition, and healthcare.
Returning to the first objective and focusing just on apprenticeship support. The scheme paid companies with max. 250 employees €5,000 for taking on an apprentice aged 16 to 18, and €8,000 for those 18 and older. Larger companies were also eligible but had to have at least 5% of their employees in apprenticeships.
Did it work? Looks like it … Industry (manufacturing) numbers look less spectacular, but still doubled from 2019 to 2024:
As we quoted in last week’s edition, the Franch manufacturing workforce is sitting at around 2.8m. With 82,600 new contracts for apprenticeships in manufacturing signed last year, that makes one new apprentice signed up for ever 34 workers.
• Staying in France, and certainly not suggesting that everything there is perfect, or even good, there are aspects of the way the country is being governed worth noting in contrast to what we do in New Zealand. Managing the supply and distribution of energy, for example.
A quick reminder: In August 2011, the then Ministry for Economic Development, on behalf of the New Zealand government, published a ten-year energy strategy. Good or bad, at least we had a plan. After that, for a couple of years – nothing. Then MBIE undertook a series of extensive consultations on a new energy strategy in 2023, with a promise to publish “… an energy strategy that will set out the Government’s role in creating an energy system that is fit for the future. The strategy will be published by the end of 2024.” (dated 6. September 2024). The fact that this webpage is still up, in spite of MBIE having been told by the current government to abandon work on the strategy, speaks for itself.
France had multi-year Energy Programmes since 2015. The Programmation pluriannuelle de l’énergie (PPE), or Multi-annual Energy Programme, is a strategic planning document that sets out France’s energy policy priorities for the next ten years, updated every five years and divided into two five-year periods. The third edition, known as PPE 3, covers the period 2025–2035 and is a central pillar of France’s broader “Stratégie française pour l’énergie et le climat,” alongside the National Low-Carbon Strategy (SNBC) and the National Climate Change Adaptation Plan (PNACC). On over 200 pages, the current draft programme sets out in great detail what the future system of the generation and distribution of energy should look like. It includes chapters like Security of supply, optimisation of the electricity system and development of networks and Socio-economic and industrial issues, consumer purchasing power and competitive energy prices.
The current update, for the period 2025 to 2035, is now before Parliament. Under the current legal framework, the French Parliament does not have a formal decision-making power over the adoption of the PPE. The programme is adopted by government decree, after public and stakeholder consultations. Parliament’s role is largely consultative: it can debate, scrutinise, and issue opinions, but it does not vote to approve or amend the PPE directly.
This limited role has become a source of significant controversy. Recently, more than 160 senators and numerous Members of Parliament (MPs) publicly called for a greater parliamentary say in the PPE process, arguing that such a crucial roadmap for France’s energy future should not be decided without a full parliamentary debate or vote. In response to parliamentary pressure, the final adoption of PPE 3 was postponed in order to allow for a parliamentary debate, although the legal framework still does not require a formal parliamentary vote for adoption.
A government that has an energy strategy. A parliament that is fighting for having more input into how that strategy is being shaped …Of course, France has a completely different system of public administration, and a different political culture. That doesn’t mean New Zealand will be best served by deliberately stepping back from having an energy strategy and “leaving it to the market to sort things out”, which we were advised to be the current government’s approach by the senior advisor to the then Minister for Energy, Simeon Brown in February 2024…
•From the box of Do I really need to know this?! – next time you say “thank you” to ChatGPT for a job well done, think again. In a contribution to Hugging Face (‘The AI community building the future’) entitled Saying Thank You to a LLM Isn’t Free — Measuring the Energy Cost of Politeness, the authors have calculated how much energy is required for a Large-Language Model [LLM] to respond to a ‘thank you’, like in this ChatGPT example:
The answer: The total energy consumed is, on average, ≈ 0.245 Wh, which is roughly equivalent to powering a 5 W LED bulb for approximately 3 minutes. That number depends on the size of the model used. Not surprisingly, GPU usage, which is by far the biggest component, goes up with the size of the model used:
Does it matter? Total electricity use for Q1/2025 in the US is estimated at 1,048 terawatt-hours [TWh], with data centres using approximately 200 TWh in that period. That is about the same as the entire manufacturing sector, estimated to have used between 204 and 218 TWh. By 2030, U.S. data centres are projected to consume over 600 TWh of electricity.
ChatGPT is estimated to currently have 800 million weekly users. Let’s say one third of them say “thank you” once every six weeks and using the power consumption quoted above, that would result in an additional electricity consumption of ca. 522 MWh. That’s equivalent to the average annual consumption of about 80 New Zealand residential homes in 2024. Frivolous mathematics, of course – but maybe worth thinking about next time we give our favourite LLM a frivolous task …
As a side note from the editor– I personally will continue to sooner use programs like ChatGPT on a rarer basis and still say ‘Thank you’, rather than use it more often and with no pleasantries. I refuse to be a victim in the upcoming human vs robot war and will avoid it by staying on the robots good sides/systems.
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