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Saturday, February 22, 2025

Mike's Minute: Should we be buying the closed mills?


In a week, 230 New Zealanders were given confirmation Kinleith Mill was over.

The Australians facing the same scenario at a place called Whyalla in South Australia did something completely different.

The steel mill is owned by a British billionaire and it's in a world of financial trouble. It may well go to the wall.

It employs 1000 people in a town of 22,000. So the state Government, backed by the Federal Government, has bought it.

Even for a Labour Government in Australia it is an extraordinary move.

But the assessment is, in a small town, you can't afford to lose that many jobs.

They will look for a buyer, they will look for finance and they will look to rejig the place to solve the problem. But in the meantime, the place is open and the jobs are saved.

The first question you ask, of course, is would this decision be made if it was not about a month or so out from an election, which is an election the Government who just bought the steel mill is in serious danger of losing?

The precedent is also shocking. If you save one, surely you save them all? And if you don’t, because you can't, the locals will, quite righty, ask why not?

Also, the Government owning things in the long term has never really been a recipe for efficiency or success. As much heat as Labour got in the 1980's for selling the railways here, Helen Clark buying them back has hardly been one of life's great business decisions.

In a small town though, at the pub or the dairy or the sports field, who cares? They've got jobs, the bills get paid, and the kids stay in the local school. They'll take it. Where the money came from doesn’t really matter.

As much as Shane Jones espouses the value of the regions, the region here still lost its mill.

We still have the problem that is the price of power. It still hasn’t been addressed as an issue, and we go into another winter with a mess of a system.

In Australia the place is open, the jobs are saved and no one's leaving town.

So, which approach is better?

Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.

1 comment:

Juliet said...

An interesting comparison but not entirely valid.
Whyalla is a steelworks, a strategic asset vital to the country’s development and one on which other industries depend.
Kinleith is a pulp and paper mill, useful as local production of a global commodity, but hardly a strategic asset.
Whyalla also uses Australian iron ore and coal, both of which have global markets.
Kinleith uses New Zealand pine trees and electricity. There is a limited global market for the former and none for the latter.
Even so, why should the New Zealand taxpayer pour funds into a mill without also ensuring the electricity market is delivering affordable power.
It’s there that taxpayer investment is required, plus a more effective regulation and control.
I see Te Pati National is “considering” buying back the Marsden Point refinery or building a new one. That won’t happen because Luxon will decide it’s too hard to sell during a cost-of-living crisis.
Meanwhile, other idiocies of governments past will continue.
Huntly power station will continue burning dirty brown imported Indonesian coal while the rich seam of the closed Huntly West Mine lies unexploited at the end of a conveyor just over the hill.
The station was adapted several decades ago to run on natural gas piped from Taranaki, but that supply has dried up after Jacinda’s “captain’s call” to ban further exploration.
So much to fix, so little time, so little money, so little leadership and determination. . .