Mike's Minute: Should we be buying the closed mills?

In a week, 230 New Zealanders were given confirmation Kinleith Mill was over. 

The Australians facing the same scenario at a place called Whyalla in South Australia did something completely different. 

The steel mill is owned by a British billionaire and it's in a world of financial trouble. It may well go to the wall. 

It employs 1000 people in a town of 22,000. So the state Government, backed by the Federal Government, has bought it. 

Even for a Labour Government in Australia it is an extraordinary move. 

But the assessment is, in a small town, you can't afford to lose that many jobs. 

They will look for a buyer, they will look for finance and they will look to rejig the place to solve the problem. But in the meantime, the place is open and the jobs are saved. 

The first question you ask, of course, is would this decision be made if it was not about a month or so out from an election, which is an election the Government who just bought the steel mill is in serious danger of losing? 

The precedent is also shocking. If you save one, surely you save them all? And if you don’t, because you can't, the locals will, quite righty, ask why not? 

Also, the Government owning things in the long term has never really been a recipe for efficiency or success. As much heat as Labour got in the 1980's for selling the railways here, Helen Clark buying them back has hardly been one of life's great business decisions. 

In a small town though, at the pub or the dairy or the sports field, who cares? They've got jobs, the bills get paid, and the kids stay in the local school. They'll take it. Where the money came from doesn’t really matter. 

As much as Shane Jones espouses the value of the regions, the region here still lost its mill. 

We still have the problem that is the price of power. It still hasn’t been addressed as an issue, and we go into another winter with a mess of a system. 

In Australia the place is open, the jobs are saved and no one's leaving town. 

So, which approach is better? 

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Episode Transcript

Speaker 1 (00:00):
In a week, two hundred and thirty New Zealanders were
given confirmation Kinleith Mill was over. The Australians, facing the
same scenario at a place called Wala in South Australia,
did something completely different. The steel mill is owned by
a British billionaire. It's in a world of financial trouble.
It may well go to the wall that employs a
thousand people in a town of twenty two thousand. So
the state government back now by the federal government has

(00:20):
bought it. Even for a labor government in Australia, it's
an extraordinary move. But the assessment is in a small
town you can't afford to lose that many jobs. They'll
look for a buyer, they'll look for a finance, they
will look to rejig the place. Solved the problem that
in the meantime the places open, the jobs are saved.
First question you ask, of course, is would this decision
be made if it was not about a month or
so out from an election. An election the government who

(00:42):
just bought the steel works as in serious danger of losing.
The precedent, of course, is also shocking. If you save one,
surely you save them all. And if you don't because
you can't. The locals will quite rightly ask why not. Also,
the government owning things and the long term has never
really been a recipe for efficiency or success. As much heat,
for example, as Labour got in the eighties for selling
the railways here helling Clark buying them back has hardly

(01:04):
been one of life's great business decisions. In a small
town though, at the pub or the dairy or the
sports field on Saturday, who cares. They've got jobs, the
bills get paid, the kids day and the local school
they'll take it. Where the money came from doesn't really matter,
does it. As much as Shane Jones espouses the value
of the regions, the regions here still lost the mill
and the problem that's sunk in or sunk it at

(01:24):
the price of power that still hasn't been addressed either
as an issue. We go into yet another winter with
a mess of a system in Australia. The place is opened,
the jobs are saved, no one's leaving town. So which
approach is better? For more from the Mike Asking Breakfast,
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