Smelter closure threat no time to relax – CTU
The closure of the Tiwai Point aluminium smelter would, sadly, have impacts far beyond those envisaged by an Infometrics report, according to a Council of Trade Unions economist.
The Infometrics report prepared for the Invercargill City Council found that should the plant close in 2024 it would not have the catastrophic economic impact that many expect.
The loss of 2264 jobs, either directly employed or part of the supply chain, could be absorbed within four years, or quicker, the report found.
CTU economist Craig Renney was unconvinced by the report’s expectation of the lost jobs being replaced by the 620 jobs a year being created by manufacturing and construction in Southland.
The manufacturing and construction sector was a broad part of the economy and workers from Tiwai wouldn’t easily slot into those jobs, he said.
About 97% of the lost jobs would be in Invercargill, meaning the impact on the city was likely to be devastating.
‘‘Southland is a big place – so do we really think that jobs being created in Te Anau are replacement for jobs lost in Invercargill, 155km away?’’ Renney said.
The report had also missed the effect of ‘‘wage scarring’’. Wages at Tiwai were often much higher than available outside, and when workers lost their job their next one was often paid less as it was not a great match for their skills.
‘‘The scale of that wage scarring when 2264 people are suddenly chasing every available job would be enormous.’’
The spillover effects on the economy would include jobs in sectors that weren’t directly associated with the industry, such as local shops and restaurants, and this would be more intense in a concentrated geographic area like Invercargill.
The loss of Tiwai would have an influence that would almost certainly reduce the number of jobs being created in the region, so those replacement jobs ‘‘just wouldn’t be there’’, Renney said.
He said his assessment was not a criticism of the report’s authors.
‘‘It’s just that way too much weight is being put on analysis that isn’t designed for that purpose. What we shouldn’t do is relax. We should use the time that Tiwai is still here to build the high-wage, high-skill economy needed outside of the smelter.
‘‘Instead of thinking that this is a problem that can be solved between Rugby World Cups, we should instead be delivering a productive, sustainable and inclusive economic plan for Tiwai for the next 30 years.’’