Longtime smelter boss lays out 'strong argument' for govt subsidy
Kerry McDonald speaks out.
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Hawke’s Bay
A former CEO of the Tiwai Point smelter says that even though the plant is not as important to the New Zealand economy as it once was, the Government should still subsidise it in the short term
Kerry McDonald was CEO of smelter owner Comalco (as Rio Tinto was formerly called) from 1988 to 2003.
The well known New Zealand businessman is also a former director of the New Zealand Institute of Economic research and was BNZ chairman for 11 years.
Speaking today on TV3’s “The Nation” he said the smelter had been a tremendous contributor to the New Zealand economy.
“But over recent years that contribution has probably abated somewhat,” he said.
“Aluminium prices have been relatively low, the strong New Zealand dollar and the continual rise in electricity prices has made the smelter less profitable, so it's paid less tax, and the smelter operation right now may even been cash negative.
“Now having said that there will be a lot of detriments from the smelter closing.
“The labour productivity there is just so high and so the pay that goes to the workforce goes into the local community, will be an enormous loss, and yes it will affect the balance of payments and so on, and affect the tax base, but not as much as it would have 10 years ago.
“And so I think there is still a very strong argument to find a short term deal that bridges the gap between the two, that allows an orderly transition but there is no doubt that when the smelter closes it will be a significant loss.”
NBR staff
Sat, 30 Mar 2013
Sat, 30 Mar 2013
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Longtime smelter boss lays out 'strong argument' for govt subsidy
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