Ryan Bridge: We don't have the money for corporate welfare

A $60 million corporate welfare cheque for Golden Bay Cement is fixing a symptom but not the disease. 

It's taxpayer money. It's not a loan – it's free money. Owner Fletcher Building has agreed, in return, to keep the thing open till 2040 and invest $150 million, phased over time. 

No doubt cement is important for building the country, but so was refined oil. We offshored that. So is milled timber, which we let go. So is food production, which we're letting fall over too. 

This is the problem with welfare: once you start handing it out, everyone wants a piece of the pie. 

Fletcher Building is a conglomerate, listed both here and on the ASX. 

Their results are due out next month, which will now be watched very closely. 

Last week, the company increased its earnings guidance and turned a $45 million profit in the half year to December. 

Sure, it's not been without its problems, and we've kept you updated on their restructures and legacy problems and the general state of construction. 

The only reason the Government is doing this, in my view, is because unlike the other examples of paper mills and Wattie's, this one's caused not just by the price of labour and energy going north. 

It's the ETS.  

Fletcher buys credits to emit carbon while making its cement. This cost made the Northland plant unviable. A dead man walking. 

You can import cheap cement from offshore where they don't pay for emissions. 

Which makes them a cheaper option, and we get undercut. 

The Government reckons they went with a bailout rather than changing the ETS rules because they didn't want companies lining up for handouts. 

But that's exactly what will happen anyway. Any plant at risk of closure paying for emissions is now fair game. 

This might look like a single smallish payment to a single business, but it's actually a blank cheque they've signed, and with the election round the corner, the sky's the limit. 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
A sixty million dollar corporate welfare check for golden based
cement is fixing a symptom, but not the disease. It's
papering over the cracks. It's taxpayer money. It's not alone,
it's free money. Owner Fletcher Building has agreed in return
to keep the thing open until twenty forty at a minimum,
and invest one hundred and fifty million phased over time.
No doubt cement is important for building the country. But

(00:22):
so was refined oil. We offshowled that. So is milled timber,
which we are letting go. So is food production, which
we're letting fall over two. This is the problem with welfare.
Once you start handing it out, everyone wants a piece
of the pie. Fletcher Building is a conglomerate listed both
here and on the ASX. The results are due out
next month, which will now be watched very closely. Last

(00:43):
week the company increased its earnings guidance and turned a
forty five million dollar profit in the half year to December. Sure,
it's not without its problems. We've kept you updated on
their reg structures, the legacy issues, the general state of construction.
The only reason the government is doing this though, in
my view is because, like there are other examples of
the paper mills and the watties and what have views,

(01:04):
this one's caused not just by the price of labor
and energy going north. It's the ETS. Fletcher's buyers credits
to emit carbon while making its cement. This cost made
the Northern plant unviable, dead man walking. You can import
cheap cement from offshore where they don't pay for these emissions,
which makes them a cheaper option, and we get undercut.

(01:27):
The government reckons they want went with a bailout here
rather than changing the ETS rules because they didn't want
companies lining up for handouts. But that is exactly what
will happen anyway. Any plant at risk of closure paying
for emissions is now fair game. This might look like
a small ish payment to a single business, but it's

(01:50):
actually a blank check they've just signed. With the election
around the corner, and guess what the sky's the limit.
For more Family Edition with Ryan Breh, listen live to
News Talks. It'd be from five am weekdays, or follow
the podcast on iHeartRadio.