Government in Southland with message of scant hope, no plan after smelter closure

Prime Minister Jacinda Ardern, Finance Minister Grant Robertson, Regional Economic Minister Shane Jones and a bunch Labour and NZ First MPs fronted up in Southland yesterday to try to address the planned closure of the Tiwai Point aluminium smelter, after Robertson had signalled on Tuesday the visit was not to save the smelter.

From a distance Winston Peters didn’t help with unified commiserations, suggesting that the Government buy the smelter. Peters has a reputation for being an astute reader of public sentiment in election campaigns, but I’m not sure Southlanders will buy that.

Stuff: Prime Minister Jacinda Ardern and Finance Minister Grant Robertson arrive in Invercargill amidst smelter closure

Senior Government ministers have arrived in Invercargill to talk with Southland leaders in regards to the closure of the Tiwai Point aluminium smelter.

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson landed at Invercargill Airport on Wednesday night.

When asked, after she got off the plane, if she was in Southland to save the smelter, she said: “you’ll probably have a chance to see us tomorrow when we’ve got our stand up”.

Stuff asked Grant Robertson what he would say to Southland business leaders, he replied: “It’s a good opportunity for us to hear from all of the business leaders we’re seeing, and various others, and get a feel for the situation, and then we’ll have some stuff to say to you after that”.

Robertson signalled on Tuesday the visit was not to save the smelter.

A spokesperson from Robertson’s office said the plant was not closing until August next year, which meant there was already some transition time.

So that wasn’t a positive start for the visit. And coverage was dominated by Peters despite him not being there.

ODT:  Ardern distances herself from Peters’ smelter buy-out comments

Prime Minister Jacinda Ardern is distancing herself from the position of her Deputy, Winston Peters, over comments he made about the Tiwai Point smelter.

In an op-ed for the New Zealand Herald, Peters suggested that the Government should step in and save the Southland smelter, currently owned by Rio Tinto.

“A buy-out would give those who have the most stake in the success of the smelter, the people of Southland, the opportunity to directly benefit from owning and managing it,” he said.

But, speaking to reporters in Southland this morning, Ardern distanced herself – and in effect the Government – from Peters’ comments.

Asked specifically about what she thought of the Deputy Prime Minister’s column, Ardern replied that she had seen the position of “the leader of New Zealand First”.

In other words, Ardern was making it clear that Peters’ comments were made in his capacity as a party leader and not as a Government spokesman.

The Prime Minister added that the Government stepping in, in the way suggested by Peters, “wasn’t the nature of the conversation that was had with leaders here [in Southland] today”.

She said any talks about a bailout were not part of the conversation today either.
“For us, it was all about what happens next.”

She mentioned the fact a “transition” is needed in Southland, in terms of the jobs in the region.

With both Ardern and Robertson talking of ‘transition’ with no sign of an attempt to rescue the smelter it looks like a done deal.

There was never any chance the Government would buy the smelter. Peters will know that, he is just playing to Southland voters, but they are likely to see through him.

The Government deputation looked grim (see the ODT video).

Ardern said this morning that the Government has long had plans to help develop new economic opportunities in Southland.

She said the question now is: “How do we expedite those”.

One of the ways she suggested this could occur was through initiatives such as: R&D for food production, aquaculture, data centres and work on New Zealand’s Space agency.

But she said: “We are all in agreement that a transition [in Southland] is needed”.

So it looks like they went with no plan and nothing new to offer.

The  E tū union is affiliated to the Labour Party and even they look like they have given up on the smelter and downstream jobs and businesses that are a huge part of the Southland economy.

Stuff: Tiwai workers ‘have more clarity’ after meeting with PM

Tiwai employee and E tū union delegate Cliff Dobbie says the Government is doing all it can to get Southland going as the aluminium smelter prepares to wind down operations.

Dobbie felt he had a clearer picture of future options for his crew after meeting with Prime Minister Jacinda Ardern and Finance Minister Grant Robertson at the E tū office in Invercargill on Thursday.

While he is nearing retirement himself, Dobbie said he was worried about future income for his crew members – many of whom were under the age of 40.

But after the informal meeting over tea and biscuits, he was fairly confident they would be looked after.

“I feel a lot clearer. They didn’t beat about the bush,” Dobbie said.

E tū organiser Anna Huffstutler said the meeting focused on what a just transition would look like and who needed to be sitting around the table for those discussions.

“It’s about bringing the community and stakeholders together and creating a roadmap,” Huffstutler said.

“Government is fully supportive of that.”

Timelines for these plans would be determined by negotiations between Meridian and Rio Tinto around how the smelter will be shut down, she said.

E tū organiser Mike Kirkword said it was too early to nail down where and how Tiwai staff would be absorbed into the Southland economy.

So no fight, no hope, no plan, just acquiescence and vague platitudes from the Government and despite the closure being signalled for years.

 

 

 

Where’s the plan for Southland post-smelter?

Grant Robertson on the shutdown of Tiwai Point and loss of thousands of jobs – ‘too bad, move on’.

Jacinda Ardern on the shutdown:

While Tinto have just announced they will close their Tiwai Point aluminium smelter next year this was a well signalled possibility. The Government response (acceptance of the decision) suggested they were well aware this announcement was coming.

Grant Robertson said Government will support the people and economy of Southland:

The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter.

“This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter,” Grant Robertson said.

Stuff: Invercargill Mayor Tim Shadbolt ‘absolutely shattered’ by news of Tiwai Aluminium Smelter closure

Labour list MP Liz Craig, who is based in Invercargill also said she was devastated by the closure news and said her thoughts were with the workers, families, and businesses affected.

Craig acknowledged it will have a huge impact on the Southland economy.

She spoke with prime minister Jacinda Ardern this morning about the impact this will have on Southland.

“I am pleased that [Finance Minister] Grant Robertson has already signalled the Government will support the Southland community in our transition, in areas such as agriculture, aquaculture and manufacturing.’’

Craig has invited Adern and Robertson to visit in Invercargill to discuss how the Government might help support those affected, grow local jobs, and create a sustainable Southland economy.

Ardern visited the smelter when they reopened a fourth potline in December 2018 – that was good news. Will she frobt up when the news is bad? So far she has left it to Robertson, who seems quite relaxed about.

Bernard Hickey: Newsroom: Why is Labour letting Tiwai Pt shut now?

Finance Minister Grant Robertson seemed much more philosophical and accepting of the news when he spoke a couple of hours later. It became clear that both the Government and Rio Tinto had called each others’ bluffs, leaving Southlanders incredulous.

“This is a blow for the people of Southland and I feel for them, but we need to look to the future,” Robertson said.

“There is a certain sense of inevitability about today’s announcement. Rio Tinto have been trying to sell Tiwai Point for about 10 years now,” he said.

The Government is spending $62b to cushion the impact of Covid-19 on the rest of the economy, including handing out over $12 billion to small to medium enterprises to keep often near-minimum wage jobs going for a few weeks.

But it appears unwilling to consider spending a few tens of millions to keep at least 2,600 highly paid jobs going in a region with few other alternatives for such high-wage jobs.

Robertson talked airily on Thursday about the prospects for agriculture and aquaculture, but in reality those jobs will be much lower wage and have yet to be invented.

He has talked repeatedly about his personal desire to avoid the mistakes made during the 1990-91 recession when manufacturing jobs were gutted in the regions and little was done to soften the blow.

The risk for the Government and those remaining high-wage jobs in the regions in the next three months is that the announcement of closures of Tiwai Point (2,600 jobs), Marsden Point (3,500 jobs) and the Glenbrook Steel Mill (3,900 jobs) could potentially all come in the next six months.

The worst recession since 1990-91 could easily be just as damaging for the regions as that one.

So far the Government response has basically been ‘too bad, move on’.

ODT editorial: Post-smelter plan must be readied

Southland does not need woolly promises of help and platitudinous pep talks. It needs a concrete plan to meet and then beat the economic and social destruction left when New Zealand Aluminium Smelters’ closes Tiwai Point.

The looming costs are hinted at in the figures most often pitched as reasons to move heaven and earth to keep the smelter online. Previous estimates suggest it accounts for more than 6% of the region’s GDP, and well over $400million to the region’s economy.

That cash keeps people in work and businesses in profit. It helps people pay their mortgages and their grocery bills, helps them support local schools and pay their sports club subscriptions, and keeps them working in and contributing to the South.

These people, families and communities do not have long to consider the effect of losing the smelter. NZAS will terminate its electricity contract with Meridian Energy in August 2021, when the wind-down is complete.

They have little time to decide what to do next and an uncertain time in which to do it. They need no reminding we face a prolonged pandemic-induced recession, and that finding good work and a strong income may be difficult.

But there has been plenty of time to prepare for the inevitability that Tiwai would be shut down.

There is little time to prepare for a post-smelter future but successive Governments have had the best part of a decade to ensure there was a plan to cope with, and then fill the gap left when Rio Tinto pulled the plug on its regionally and nationally significant operation at Tiwai Point.

Treasury, Ministry of Business, Innovation and Employment and Ministry of Social Development officials have had plenty of time, regardless of which parties were in Government, to forge all manner of strategies for a post-smelter future. They, and a succession of politicians, have had years to prepare for the inevitable.

As such, Southlanders have every right to expect Prime Minister Jacinda Ardern and Finance Minister Grant Robertson to outline robust, detailed plans when they take up Labour Invercargill List MP Liz Craig’s invitation to visit Invercargill and ‘‘discuss how the Government might help us support those affected, grow local jobs and create a sustainable future for the Southland economy’’.

If not, Southlanders have every right to feel let down by a multi-national company and by the governments that saw this coming.

Robertson seems untroubled by the problems faced by Southland.

What about Ardern? I can’t find any response from her on the shutdown announcement. Nothing since her good news PR money handout announcement on Thursday – NZ Herald: Government to bail out councils with $761m water services investment:

Prime Minister Jacinda Ardern has announced a $761 million investment to help councils upgrade “run down” water services across the country.

In a politically charged piece of symbolism, Ardern and Local Government Minister Nanaia Mahuta chose the site of the water bore found to be the source of the fatal Havelock North campylobacter outbreak in 2016 to make the announcement on Wednesday.

“Investing in water infrastructure is about investing in the health of New Zealanders.”

Southlanders are New Zealanders. They received very bad news this week. Ardern was nowhere to be seen.

 

Tiwai smelter to shut down next year, Government accepting closure

This is one of those ‘shock but not a surprise announcements – Rio Tinto has announced that they won’t renew their power contract for the Tiwai Point aluminium smelter and will shut down permanently.

Rio Tinto have claimed power prices have been too high for years, negotiated a deal with the Government in 2015 – see Key says Government won’t add to NZ$30 million of support given to Rio Tinto to keep Tiwai Pt open –  but have still been losing money as world power prices have declined.

The Government has said they will support the workers and businesses affected in Southland, but they won’t try to keep the smelter running.

RNZ: Rio Tinto announces plans to close Tiwai Point smelter

Rio Tinto has announced that it will wind down New Zealand Aluminium Smelters, best known as Tiwai Point smelter.

In a statement to the Australian Stock Exchange, the company said its strategic review had “shown the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry.”

The company has given Meridian Energy notice to terminate its power contract, which ends in August next year. It expects the wind-down of operations will be done by then.

It said it had had discussions with interested parties but could not secure a power contract that would have kept the smelter competitive and profitable.

The smelter’s viability has been questioned for much of the past decade as it grappled with weak metal prices, power costs, and over capacity which has seen smelters closed around the world.

It employs about 1000 people directly and creates a further 1600 indirect jobs in Southland. The smelter is owned by Rio Tinto and Japan’s Sumitomo Chemical Co.

NZ Aluminium Smelters chief executive Stu Hamilton told Morning Report they were on a path to winding down operations.

“We don’t think there’s a deal that can be done that will deliver competitively-priced power to the smelter which is necessary for it to be sustainable.

“We do believe that nothing has been left on the table but if we’re mistaken then the window is still available for a deal to be put on the table but the window for that is closing fast now that we have terminated our electricity contract with Meridian.

It looks like they aren’t mistaken, the Government seems to be not interested in trying to rescue the situation. Their official response shows they intend to deal with the closure rather than try to prevent it: Government will support the people and economy of Southland

The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter.

“This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter,” Grant Robertson said.

“The smelter supports hundreds of jobs in Southland and the Government will work with the local community to support economic development in the region to help offset this loss.

“Rio Tinto has indicated it wants to work with the Government to support the community during the wind down of the smelter.

“As we have done in Taranaki, we will support a just transition to more job opportunities. We know the strengths of Southland and we want to build on them in areas such as agriculture, aquaculture and manufacturing. There is also an opportunity to support other energy intensive projects like green hydrogen and data centres.

“There is a degree of inevitability to the decision, as Tiwai has been on the market since 2011, and former Prime Minister Bill English told Rio Tinto in 2013 there would be no further taxpayer money provided.

“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.”

Not only does the Government seem happy to see the smelter close, they are looking at what opportunities that may bring:

“Rio Tinto’s decision not to extend their generous power contract with Meridian will flow through to the rest of the market,” Megan Woods said.

“It is disappointing that Rio Tinto is deciding to close one of the world’s lowest carbon aluminium smelters, in favour of keeping open coal plants.”

“Eventually it will free up around 13 percent of total power generated in New Zealand which will relieve some pressure to build new generation. The increased supply will also have a positive impact on prices.

“I also want to make clear that the Government expects Rio Tinto to meet their obligations for clean-up of the site (an estimated $256 million) and do the right thing on the dross,” Megan Woods said.

RNZ: Tiwai smelter closure: A ‘tough day’ for Southland – Grant Robertson

“The message I have for the people of Southland today is the government stands alongside you and with you to start providing new job opportunities in the region.

“This is a very sad day for Southland but there are also opportunities attached to this.”

Not just a tough day, it could be a tough few years if not decade for Southland. It’s hard to see how ‘new opportunities’ will pick up the slack for two and a half thousand jobs, inevitable business losses and the wider family and community impacts.

The union representing workers at the smelter says about 1000 people directly employed by the smelter would be affected, but the decision would also impact on a further estimated 1600 workers in the supply chains.

E tū union said staff were shocked and dismayed and never thought threats to close the plant would ever eventuate.

Negotiator specialist Joe Gallagher said it was not too late to get back around the table, strike a deal, and save jobs.

Sounds like it is too late.

There was a lot of other response.

Contact Says Smelter Closure Is ‘disappointing’

Contact Energy (“Contact”) CEO Mike Fuge said Rio Tinto’s intention to effectively close New Zealand’s Aluminium Smelter (“NZAS”) by giving 14 months’ notice on their electricity contract with Meridian Energy was “very disappointing”.

He said all commercial parties involved in dealing with NZAS, including Contact, had collectively delivered significant cost reductions for electricity. “We’ve all had a strong desire to help secure the financial sustainability of the unique low-carbon smelter at Tiwai, and retain the 1,000 high-paying jobs in Southland, plus the 1,600 contractor and supplier roles.

Contact’s ‘shovel-ready’ Tauhara geothermal power station remained New Zealand’s cheapest and most attractive option for new, renewable, baseload electricity generation, but Mr Fuge said the sensible option was to defer this investment. “Tauhara remains a fantastic project, however it is prudent to press pause for now. We need to factor in the impact of COVID-19 and the potential exit of NZAS and get a clearer picture of demand,” he said.

So that is one ‘shovel-ready’ project that may not happen now.

Rio Tinto Departure Makes Decarbonisation Projects ‘shovel Ready’

Rio Tinto’s smelter, which uses 13 percent of New Zealand’s electricity, is now due to close in August 2021. Greenpeace Executive Director, Dr Russel Norman, says the Tiwai closure will release a huge amount of low-carbon and affordable power back onto the grid.

“The Tiwai closure will mean cheaper power for New Zealand households. It also means there is more clean, renewable energy that can be used to power our cars and industries as we move to a zero carbon economy.

“This will cut climate emissions out of the transport and industrial sectors, while simultaneously helping to reduce New Zealand’s current account deficit by cutting the billions of dollars we spend on importing oil for the transport sector.

“With a ready supply of clean and affordable hydropower now being made available, the Government should create the conditions needed to increase the number of electric cars, buses and trains.”

Norman also says Rio Tinto’s departure blows any case for new coal, gas or oil development completely out of the water.

Rio Tinto Decision Following Strategic Review Of Tiwai Smelter

Mercury notes Rio Tinto’s announcement to wind-down operations at New Zealand Aluminium Smelters Limited (NZAS) with expected closure in August 2021.

Mercury reiterates previously made statements that it is relatively well placed to respond to the decision to close the smelter, with all of its renewable generation assets in the North Island close to load centres and largely free of major transmission constraints as a consequence of reduced South Island electricity demand.

Tiwai Closure Points To End Of Heavy Industry Under Ardern

“The closure of Tiwai Point signals the end of heavy industry under the Ardern Government,” according to ACT Leader David Seymour.

“Labour is squeezing the life out of the economy. For the past three years, it has made it much more difficult and costly for businesses like Tiwai Point to be productive.

“We have a Wellington-centric government of former student politicians that just doesn’t get how the economy works.

I doubt ACT would support a government subsidy of a foreign owned company.

New Zealand First Disappointed Rio Tinto Playing Games With Southlanders

Australian mining company Rio Tinto is playing games with the people of Southland, says New Zealand First List MP, Mark Patterson, following today’s announcement that Tiwai Point is to close.

“It is unconscionable that despite massive support from New Zealand, multi-billion dollar company Rio Tinto is bailing on Southlanders at the height of an economic crisis,” said Mr Patterson.

“New Zealand First has consistently warned that Rio Tinto would walk away, just as they did in Australia, when it no longer suited them. And with a 14 month timeframe, this looks like Rio Tinto is using local workers to play hard-ball with New Zealand power companies.

Patterson seems to be speaking to people who will be adversely affected by the closure while ignoring that NZ First are a part of the Government that is waving goodbye as Rio Tinto walks away.

The End Of Tiwai Pt Could Open Huge Opportunities For NZ

The announced closure of Tiwai Point is welcome news for the clean energy future of New Zealand, and presents huge opportunities in areas such as electrifying transport and developing new, high-tech industries, Coal Action Network Aotearoa said today.

Provided this is not a negotiating tactic, Tiwai’s shutdown should see the closing of the country’s only coal-fired power station at Huntly, which Meridian persuaded Genesis to keep it open as part of the deal it did with Rio Tinto in 2016.

Once the smelter is closed, New Zealand’s emissions will drop by upwards of 1.5 million tonnes a year, emissions the taxpayer has been subsidising NZ Aluminium Smelters for.

“We now have a massive opportunity to look at where and how we will use the renewable energy that will be freed up: we could electrify the South Island’s rail network, and make huge steps toward electric transport,” said CANA’s Rosemary Penwarden.

Union Calls For Just Transition For Workers As Smelter To Close

E tū union is calling for a ‘Just Transition’ for workers in the wake of Rio Tinto’s announcement it will be closing its smelter at Tiwai Point.

“This is a significant employer and this company is at the heart of its community. A closure will affect the entire supply chain, including other local suppliers,” he says.

Joe says the Government needs to consider a similar approach to that used in Taranaki with the Taranaki 2050 Roadmap, to ensure a Just Transition takes place.

I wonder if the E tū union supports the Labour led government letting Tiwai close:  Affiliations – E tū is affiliated to the New Zealand Labour Party.

Infracom To Factor Tiwai Closure In Infrastructure Strategy

Today’s announcement of the potential closure of the Tiwai aluminium smelter by Rio Tinto has very significant implications for the economy and energy market. This will be a key consideration in Infracom’s thinking as it develops New Zealand’s 30 year Infrastructure Strategy.

Tiwai Point Closure – Expert Reaction

Associate Professor Nicola Gaston, Co-director, MacDiarmid Institute for Advanced Materials and Nanotechnology:

“The closure of Tiwai Point is first and foremost a loss for the people of Southland who will be impacted by the loss of thousands of jobs at an awful time. However, it is not a huge surprise, on some level: Rio Tinto has threatened to pull out previously, repeatedly, in negotiating the cost of the electricity supply with Government, and the discussion about what New Zealand should do with the energy is not new.

Jeanette Fitzsimons (former Green Party leader) pointed out late last year that ETS subsidies for the smelter would total a billion dollars by 2030, and that we should consider better uses for the 13 per cent of our electricity supply, all of it renewable.

“Many of my colleagues at the MacDiarmid Institute are deeply passionate about this being the right time to invest in new tech to make the most of our renewable energy advantages in New Zealand – whether this is a form of energy storage, which could include green hydrogen generation, or something even more ambitious, such as using the energy for manufacture of other components needed for a zero carbon economy, such as solar panels – these options exist, but require a government-led business case to be developed.

Dr Anna Berka, Lecturer in Management, Entrepreneurship & Innovation, Massey University:

“Rio Tinto has flagged potential closure for some years. The current crisis has clearly pushed it over the edge. Previous governments went far to make it comfortable here; it was granted some of the lowest electricity prices, reportedly below cost. In return, Rio Tinto has been obstructive to emissions pricing, and by all indications seems to have abused our resource consent process as well. As the largest consumer of electricity in the country, its closure will have ripple effects on the entire energy sector, resulting in temporary surplus capacity – and resulting in downwards pressure on market prices, as well as very likely reducing the viability of new generation capacity currently under development.

Professor Emeritus Ralph Sims, Sustainable Energy and Climate Mitigation, Massey University:

“Few countries have surplus power generation available to meet the present electricity demand as will be the case in New Zealand once the Tiwai Point smelter starts phasing out its high electricity-consuming aluminium potlines over the next year or two.

“We know there will be growing demand over the next decade or two for electricity, especially for electric vehicle charging and industrial and commercial heating by companies, schools etc., looking to displace coal with electricity.

“This will also further reduce the combustion of gas and coal used for power generation and therefore help lower the total carbon dioxide emissions from electricity generation.

“So, in a perfect world, closing Tiwai Point should theoretically result in greater shares of renewable electricity, a reduction in greenhouse gas emissions, and cheaper electricity prices for all New Zealanders.

“However, it’s not that easy.

“So, will New Zealand electricity consumers reap the economic and environmental benefits of having cheaper hydro power suddenly becoming available once the smelter starts winding down?

“I have my doubts.”

Associate Professor Nirmal Nair, Department of Electrical, Computer and Software Engineering, University of Auckland:

“What the likely energy consequences are, which we as a country need to prepare for, is based on how this news is going to play out in the next two to 10 years or so.

“If the demand destruction of electricity load happens in the next two to three years, we will need to spend some dollars to strengthen the transmission assets there to port the electricity to North Island.”

Adjunct Professor Harvey Weake, Faculty of Engineering, University of Auckland:

“I guess the industry has been bracing for this announcement for some time. Given the plant is close to 50 years old, that is a pretty good innings for such a plant and without a major capital injection to maintain its competitiveness, it was just a matter of time. Newer plants are just more energy efficient.

“Short-term economic losses from the loss of Tiwai will be primarily through the loss of local fixed costs from that industry, but given it is foreign held, the impact to New Zealand’s economy will be pretty modest given it wasn’t projected to make significant profits anytime soon.”

Professor Sally Brooker, Department of Chemistry, University of Otago:

“New Zealand should make the most of that electricity for producing green products (e.g., hydrogen, ammonia, silica for PVs, and/or even keep making super green aluminium on a smaller scale as Jeanette Fitzsimmons suggested in an earlier Spinoff article), and use the Regional Development Fund or COVID-19 budget to develop the necessary plant at Tiwai. It is a great site to do so. And it would keep skilled jobs in Southland as, without the smelter, the region will be absolutely hammered by the job losses.

“New Zealand needs to be investing heavily in further developing green energy generation and use, as part of our current government spending/investment. We could be world leaders in going completely to green energy (including transport – electricity, green hydrogen etc), as the world looks to respond to global climate change. We start from such a strong position with our high percentage of green electricity.”

We will see over the next few days or weeks whether the Government was preparing for this and has plans for alternative use of the Manapouri power, and has alternative job and business opportunities for Southland. The Government must have known the closure of Tiwai was likely.

 

 

 

 

 

 

Wellington to Invercargill: “Small shithole town. Fuck them”

That’s not from the Government, who have agreed to spend $30 million on keeping the Tiwai smelter going at least until 2017.

It’s not from David Farrar at Kiwiblog, who is expresses his disappointment relatively reasonably.

Rio Tinto screws taxpayers for $30 million

I’ve got no problem with the pricing agreement between Meridian and Rio Tinto, as that is a commercial contract.

But bloody annoyed they screwed $30 million from the taxpayers as a subsidy. I think the Government shouldn’t have given them a cent. If the smelter closes, so be it. It is not the job of taxpayers to subsidise unprofitable industries.

I can understand that from an ideological point of view and have some sympathy for Farrar’s sentiments. But Farrar lives and breathes in Wellington.

But most of the other commenters on Kiwiblog are more angry and more blunt. Especially one Wellingtonian, RRM (he lives a bit of a train ride out of Wellington but works in the capital).

I commented at Kiwiblog:

Don’t forget that Bill English is Clutha/Southland MP – and he will be (or should be) well aware of the growing anger in the south over jobs being moved north and the amount of money being spent of things in the North, especially Christchurch (much of that is understandable) but particularly Auckland.

If Tiwai closed English may not want to venture south, there would be a huge outpouring of angst and anger.

Then an outburst comes from RRM:

Huge?

Population of Invercargill = 53,000 according to Google.

It’s no secret that it’s a small shithole town at the arse end of the world, with limited employment opportunities, it’s always been that.

The aluminium smelter is a lucky score for them but by rights it should be nothing more than a service centre for the dairy farmers and a few fishing boats.

You’d have to be mad to move there. mad, or retired.

Fuck them.

I replied: RRM – that’s pretty much the Wellington attitude that many down here presume. Perhaps you should start building a lot more windmills. And hope that cold says aren’t calm.

RRM:

When you say it like that, I realise how selfish I’m being. OF COURSE I should continue to subsidise the lifestyle of Invercargill people. If they want to be basically morally equivalent to beneficiaries or prison inmates, let’s formalise that with a cheque for thirty million dollars.

There, now we own you, you mangy Catholic Scots dogs. Show us a little highland fling now. Go on.

That’s from someone who’s livelihood is in a city that is far more supported by Government spending than any other. Who commutes to work on Government subsidised transport.

And from the thumbs up responses, his views are shared by others from the north.

No wonder the South is getting very annoyed at the gutting of the provinces. Just this wek sightly to the north Dunedin mayor has called for a summit over the announcement the agricultural research in the south (centred at Invermay) is going to be moved north.

Unemployment surges

Southland’s unemployment rate has increased by more than 50 per cent from the March quarter to the June quarter, new figures show.

Invercargill Deputy Mayor Darren Ludlow said the increase in unemployment was a disturbing trend and reflected the flow-on effects of job losses at the Tiwai Pt aluminium smelter.

Southland businesses continued to struggle after the global financial crisis, he said.

It’s hard enough with the downsizing of the Tiwai workforce.

Slightly further north:

Otago unemployment up 37% on year ago

As Otago struggles with layoffs and reduced hours for manufacturing workers, the region’s unemployment rate continues to climb, rising 37% in the year to June.

“Small shithole town. Fuck them.”

And there’s a common feeling that this is how Wellington views the south in general – as well as other regions like the west Coast, the East Coast and Northland.

And they wonder why agriculture and horticulture has trouble attacking New Zealanders to work down here.

If Tiwai closed there would be a huge outpouring of angst and anger from the south. And the frustration and annoyance is growing regardless. The Tiwai news is a relief, but just a pause in the growing concern.

Southerners are already murmuring about politics – see Call for South to form own party. Will they get annoyed enough with Wellington to say “Big shithole Parliament. Fuck them!”

Labour’s conflicting priorities with Tiwai

National are in a difficult position on Tiwai balancing then interests of employment in Southland, the electricity market and asset share sales.

Labour are also in a difficult position as they need to find a position that satifies their anti asset sales campaigning, anti foreign multinational investment, and employment.

In Stuff Labour’s financial spokesperson David Parker is reported as saying:

“The optimal solution is to walk away (from the smelter) and let New Zealand have lower power prices,”

After Labour’s campaigns for Government intervention in saving jobs at KiwiRail and Telecom this is a remarkable statement – the Tiwai smelter supports a workforce of about 3,000, and unlike Telecom employees most of them would have real difficulty finding alternative employment in Southland or New Zealand.

Radio New Zealand has reported David Shearer as saying that  “the Government should have stepped in earlier” and been “more hands on”.

He wasn’t clear whether that meant more hands on to walk away from the smelter and the jobs, or more hands on to do a subsidised deal with Rio Tinto on power.

So this leaves Labour in a conflicted and vague position.

Is their anti asset sales campaign more important to them than the Tiwai smelter and thousands of jobs?