Being that rarity, namely a politician (former) who’d actually started and managed a business, I was disappointed to read Stephen Joyce’s criticism of the government for not trying to save the Tiwai Smelter.
First, he accused them of “conveniently hiding behind the skirts of Bill English” who’d said “No More” following the last taxpayer bail-out of the smelter seven years ago. That’s childish. If “no more” was right, as it was then and is today, it’s irrelevant who says it.
Joyce then pointed out some of the government’s excesses in recent months’ subsidies, the inference being that if money can be wasted on those activities, then why not the smelter? That’s stupidly illogical.
Joyce’s concern is the huge unemployment toll that will arise, confirming yet again the historic underlying unimaginative soft socialism of the National Party when it comes to economic matters, namely a history of trying to prop up dead duck victims of change.
Southland is one of our richest farming regions. The problem is Invercargill, a city that was fading badly 50 years back but was hugely boosted by the smelter’s arrival. But one only has to walk its streets to feels its stand-still nature, as indeed with many of our provincial cities. That’s a global phenomenon.
As for Bluff, it has a modern hotel and a sizeable retail area, seemingly based on tourism.
But the fact remains that over recent years there’s been a massive global over-supply of aluminium resulting in a corresponding massive drop in price.
Then came the virus and in its wake will be a devastating world economic depression reducing demand even more. The smelter is simply unsustainable and it’s absurd to pretend otherwise. It should have been closed years ago.
So why did he write this guff and in particular, take a sideswipe at the alleged comfortable and uncaring Auckland and Wellington elite who he asserted, care not a whit for the people of Invercargill?
The answer lies in the heading, namely “Could Government Have Done More to Save Jobs at Tiwai Point.”
His protest will get traction in Invercargill, currently a marginal seat amidst a solid National region. Cynically implying a National government would save the smelter (it won’t) could well swing it for the Nats. The article did Joyce no credit.
18 Comments
Tiwai was always a bit of an oddity. Part of the “Think Big” great-leap-forward but only ever viable through a gigantic subsidy, namely electrical power at a giveaway price. Worth remembering Roger Douglas’ comment that with enough support “there could be an ‘industry’ growing bananas in Antarctica” On the plus side, this should see a drop in power prices to most of the country.
Are you sure all of Tiwai was part of “Think Big”? Only the third pot line was built as a “Think Big” project. I remember my father taking me down to wharf to watch the smelter pots being unloaded during the time we lived in Bluff between 1970 – 72. “Think Big” didn’t start until 1977.
I have to wonder how many $Billions Rio Tinto had to pay maori elitist/tribal/separatists to use the name Tiwai, and got nothing in return ( as usual ), so why can’t those elitist/tribal/separatist Maori put a bit of their ill-gotten ‘windfall’ back into ‘their’ people who would have had to be employed before they agreed to allow the smelter to go ahead ??
we got just shy of $23.3 billion for naming rights in perpetuity. Sadly we’ve spent most of this already so we’re on the hunt for new sponsors, lol…
The depressing tragedy is that both major parties are talking about spending money rather than reform. Even Act only goes as far as promoting a “minimum wage freeze”…those pussies know full well we need to get rid for the minimum wage altogether, for a timely recovery. So far, it looks like we’re in for a long and ugly depression. Especially with commentary like Joyce’s.
Rio Tinto: that’s what happens when you sacrifice real industry on the altar of the false market that is the idiotic & unfounded climate change carbon credit conjob – fairies at the end of the garden.
Not really. Supply and demand killing their income. Real industry wouldn’t always be putting their hands out to NZ for more money.
Production at the Tiwai Point smelter in 2019 was near record levels, supply/demand aren’t necessarily the problem (although I’m sure COVID reduced demand). The NZ govt subsidises the Tiwai Point carbon costs TO A CERTAIN DEGREE, but they are competing against Chinese smelters & electricity suppliers with no carbon liability:
“Since the smelter opened taxpayers have been subsidising Rio Tinto to keep it open, either directly or indirectly through cheaper power, and Emissions Trading Scheme allocations of over $48 million per year. The company has made the decision not to keep operating without further subsidies.”
https://www.beehive.govt.nz/release/government-will-support-people-and-economy-southland
If businesses can’t compete normally then let them fail, but hobbling them with conjob climate change regulations amounts to the same as applying tariffs on Tiwai production. Get rid of the climate change fraud, it achieves nothing & the reasoning for it is unfounded.
Nicely put.
Maybe he wants to stop being an ex politician and return for the new vacancy.
I agree Bob. Tiwai has had its day. Mark Binns had it right: get over Tiwai closing and “move on”, whatever that might involve. The best the private sector can do is step up and find new employment opportunities in Southland. The government esp Labout can’t do it, so the private sector had better step up and show it is worthy of support.
The Invercargil mayor is the epitome of a Labor clown. Big mouth ( excuse the dig ), and full of everyone else’s money till a solution is needed, then all turns to custard when the money is finished
I agree Max
While Tiwai was a flagship for the region and the loss is a huge initial shock , the province is hugely strong financially.
The private sector has / was / is already stepping up in regards Central City development and redevelopment.
This will not be cancelled.
The region’s strength is in its’ financial strength and its’ strong sense of community
For Tiwai point the only thing of interest to Rio Tinto, is that the electricity is effectively free. There appears little benefit to the NZ tax payer, and lots of cost. Far more cost than the relatively small cost of the 3000 jobs related to the smelter. 100% of the raw materials are imported from Australia, possibly from Aussie taxpayer subsidized mines. Ninety percent of production is exported. So Rio Tinto digs up mineral, ships it to NZ, NZ taxpayer pays the cost of melting it into ingots. Then exports 90% of finished product overseas.
Though, right on Que, threaten closure, three month out from election. Get another juicy Govt subsidy, reset, and same again in 3 years.
Some interesting ideas for what Tiwai could become, Elon’s Giga factory would be nice to see, but unlikely. Another pie in the sky but would be kinda ironic is turn the factory into laminated timber plant making kitset 100m tall wind turbines. Would comparatively use sod all electricity, so in the interim instead of allowing the water to spill while waiting for the infrastructure to catch up, invite cryptocurrency miners to set up shop onsite in Manapouri.
Apart from poor timing , with so much employment lost with the virus as well , it is good news for NZ that the smelter is closing
This will release 13% more electricity onto the grid , which should bring down our expensive electricity prices, making industries more competitive, our boost our standard of living by house hold savings in energy bills
Also during the next decade , the move to electric cars , which will be a worldwide phenomenon, will require approximately, the same amount of power as the smelter used So there should not be a need for new expensive generation plants
People of south land are tough and resourceful , and will create employment as they are not the beneficiary type
I remember reading years ago that south land had approximately 2% unemployment, where northland was nearly 30 % , and economists where trying to work out why , as northland has better climate and resources . I’ve always believed that it’s the people that make a place poor or rich ; not so much the environment
The problem is that as soon as Manapouri is connected to the grid, the Gas generator in Taranaki and the old part of Huntly get switched off. No extra electricity and a massive bill to pay for the connection to get the electricity north.
Yes Michael
Also to farmer62 , the current low price of fossil based fuels will see the uptake , due to expense , of electric cars delayed to some time in the distant future.