Details of a transition package for Southland remain a mystery

Thursday, 27 August 2020

Minister of Finance Grant Robertson spoke to Southland business leaders at a breakfast this week, before meeting with the Southland Regional Leadership Group.

There seems to be a lot of talk happening, but right now, no one is saying exactly what is on the table for Southland when the Tiwai Point aluminium smelter closes.

Southland Regional Leadership Group chairman Tracy Hicks, when pressed on exactly what “transition” package was being discussed, said: “I really can’t say too much more at this moment. I’m sorry, I’m being so obscure.”

When Stuff pushed Finance Minister Grant Robertson on what “transition” package he’d discussed with Southland leaders, and asked what the package involved, the dollar value of it, and how it would be funded, his office initially replied: “We had a constructive conversation with the Southland Regional Leadership Group about the economic opportunities that have been identified by the region itself, including options for a transition package that supports new high-wage jobs”.

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“Further discussions will continue with officials on the aspects and details of any support for the region, but Ministers were encouraged by the Southland Regional Leadership Group’s commitment to looking ahead and identifying future economic opportunities for the region.”

When Stuff told the Minister’s office the reply didn’t answer any of the questions posed, it came back with: “Further discussions will continue with officials on the aspects and details.”

Hicks understood that the current government was in “caretaker mode” ahead of the upcoming elections, he said, which meant it had little power to make big decisions.

He also expected that most political parties were in the process of creating policies in response to the smelter closure.

“That will be put before the electorate in the near future, I’m sure,” Hicks said.

National Party leader Judith Collins is expected to make an announcement about the smelter in Invercargill on Friday.

What Hicks could say was that Southland leaders had been discussing “what kind of packages are available to Southland to deal with the issue of the Tiwai closure”.

That had been broken down into two segments, he said: support from government to reduce energy costs for the smelter, and financial support to accelerate projects outlined in the regional development strategy.

The idea of a Just Transition package, similar to what had been implemented in Taranaki as it moves away from oil and gas exploration, was raised by Prime Minister Jacinda Ardern when she visited Invercargill in July.

However, Hicks said the 30-year plan wasn’t viable for Southland as its needs were more immediate, given the smelter was due to close late next year.

The most obvious and simple solution was to reduce transmission costs to make keeping the smelter economically viable for Rio Tinto, Hicks said, adding that the ministers might offer aid in that space, but probably not as funding.

“Just what that may be? Who knows,” Hicks said.

He didn’t believe negotiations would be over soon.

“Negotiations, or discussions, will continue until they stop. There’s no sign of them stopping any time soon.”