Putting Tiwai’s closure in perspective for Southland

The looming closure of the Tiwai Point aluminium smelter is a devastating blow for Southland. I spoke with Stuff’s Melanie Carroll to put the closure in perspective, against how the rest of Southland’s economy is faring amid the COVID-19 pandemic. The full article can be found here, with selected comments pasted below:

Independent economist Benje Patterson said that while geographically the smelter was nearer to Bluff, it was closer by road to Invercargill where most of its workers lived.

The Bluff economy was primarily focused on fishing and seafood processing, and the port was a big distributor of goods leaving Southland, said Patterson.

Looking a little further north, Tiwai was one of the biggest employers of Invercargill people without doubt, said Patterson.

“The wages are much higher than in other industries around – they’re high-volume, lucrative jobs.”

Other major employers in the city included the hospital, and education, including the Southern Institute of Technology.

Invercargill was also a major service centre for the provincial hinterland around Southland, up to Gore, and there was a lot of retail and wholesale trade in the city.

Southland’s economy had been dominated by sheep farming before Tiwai, and agriculture and forestry still contributed more to the local economy than the smelter.

Even during the Covid pandemic there had been very good agricultural returns, softening the blow for Southland.

However, there was no escaping the pain that closing the smelter would cause.

“Closing Tiwai is game-changing,” said Patterson.

“I worry that, without job opportunities, people being thrown out into the cauldron of a recession will be forced into having to make tough decisions about what to do to keep the lights on.”

“People in Southland are very proud, very industrious people,” said Patterson, who was born in Invercargill.

“It’s quite an isolated part of the world but there are many leisure activities going for it when you look at Invercargill – it’s close to Fiordland, the Southern Lakes, the Catlins, Stewart Island.

“The fantastic job opportunities Tiwai offered and the affordable lifestyle has been quite compelling for people to put down roots.”

Many of the people employed at the smelter would have to retrain as they had a very particular set of skills, and many would decide to leave the region if there were no immediate opportunities.

“Previous discussions [about closing the smelter] were during times of high growth; this is the worst possible time.”

If you are interesting in reading more about the potential plight of Tiwai workers, then read this article. The article is one that I wrote 7 years ago stating that the closure would be an inevitability and that the government’s focus must turn to supporting workers into new roles. My comments and suggestions as to why the government must smooth the transition, to support the wellbeing of these people, are now more relevant than ever.