Eric Crampton: Does the Government's deal with NZ Steel make sense?

After spending an embarrassing amount of time trying to figure out whether paying NZ Steel an enormous amount of money to install a new electric furnace made any kind of sense, I have finally come to a conclusion.

If the subsidy does make sense, it would indicate severe problems in how industrial allocations have been handled. Problems that I would hope are being addressed in the system’s review.

How the government runs industrial allocations also needs a lot of clarification and greater transparency.

So what’s the issue?

John MacDonald: I want to like the NZ Steel deal - but I can't

If you find yourself needing $140 million today, don’t panic. Just get on the phone to the Government.

No means testing. None of that carry-on. You want it, you’ve got it.

And if they tell you where to go, ask them what NZ Steel did differently. Or, more to the point, what its international parent company Bluescope did differently.

Because, despite making nearly $3 billion in profit last year, the Government is chipping-in $140 million to help Bluescope and NZ Steel do a major upgrade of its Glenbrook steel mill which will cut the plant's greenhouse gas emissions by about 45 percent.