Winstone Pulp closures: 'It's just a really bad day for those communities' - local MP

The Government couldn't step in to save 230 jobs at two pulp mills in the central North Island because of multiple factors the company was facing, Social Development Minister Louise Upston says.

It was confirmed Tuesday Winstone Pulp International's two mills will be closed.

High power prices were blamed for the move, but Upston said that was only part of the problem.

"It wasn't felt that we could make a difference in this case... I'm not going to go into the details but there were multiple factors involved and short term Band-Aids aren't necessarily going to make a difference and that's why unfortunately, the government wasn't in a position to provide assistance to this business," she told Morning Report.

The pulp and paper market was facing a number of challenges, including wood prices, she said.

"High energy prices was unfortunately only one of several factors and I accept it's a really challenging time for the district and for those who've lost their jobs.

"Unfortunately the government isn't in a position to step in and save every business, including this one."

Upston said given the scale of job losses, the Ministry of Social Development had an early response team already on the ground.

They were looking for job opportunities in the Taranaki region and could offer assistance with relocation or retraining as needed, she said.

"Individuals and families will have to make decisions about what is best for their future. And I accept that this is a shock for all of those who are involved."

'Mega profits'

Labour leader Chris Hipkins said the government could have considered putting its share of electricity profits into a short-term solution to help Winstone Pulp employees.

Hipkins acknowledged it was not a sustainable solution.

"They could look, as a one-off, at investing that back into these communities to support them through this process while they change the electricity market."

This would not be the only manufacturer to close because of the unacceptable behaviour by the electricity sector, he said.

"I think the Government should have looked at the mega profits that the electricity generators have been generating, making."

'Absolutely gutted'

National's local MP for the Ruapehu District said she was "absolutely gutted" for workers and families affected by the closure of Winstone Pulp International's two mills in the region.

Rangitīkei MP Suze Redmayne said Winstone had been an incredible employer for the region, as its biggest single employer.

"It's just a really bad day for those communities, and for my electorate, and for our region," she told RNZ.

Asked what jobs there were for people to go into, Redmayne said there were options in other industries, but the focus right now was on making sure everyone was looking out for each other.

"It's a thriving region, and we've got tourism, we've got a really amazing horticultural industry and farming industry, but it was a cornerstone employer, an industrial employer that had three generations of people working in it, in some cases. I'll keep fighting for my community, and I'll keep advocating for them, and we'll do what we can to get through this."

In Winstone Pulp's statement announcing the closures, Regional Development Minister Shane Jones was thanked for his engagement and advocacy during the process.

Jones lambasted the country's gentailers when Winstone Pulp initially announced it plans to shut down, and threatened to end the Electricity Authority if it did not "man up" and flex its muscle or use the full powers in the legislation.

Jones told Morning Report more manufacturers would close or leave the country if power prices weren't brought under control.

"We are going to see this continually unless we get our hands around the throat of the corporate leadership that is driving New Zealand into a place of gross insecurity because our power prices are not competitive."

Jones refused to be drawn on what the government had offered, or been asked for, to keep the mills open.

But he was clear he believed the blame lay with the power industry. The government, he said, simply didn't have the fiscal bandwidth.

"The energy sector could have sorted this out in a very short amount of time, it chose not to."

A Mercury spokesperson said the new contract it offered Winstone in August was priced at a similar level to that charged to other parties for long-term arrangements.

It had been talking with Winstone about their current situation since July, and did not know what other discussions it may have had with government or other electricity suppliers, the spokesperson said.

'Sad day'

In a statement, Energy Minister Simeon Brown said the closure was "a sad day" for the region and the impacts would be felt across other industries working with the mills.

"While high energy prices are one of a number of factors behind this closure, the government is working at pace to ensure New Zealand has reliable and globally competitive energy prices. Energy prices underpin our competitiveness as country of manufacturing and exports," he said.

Brown said the government was taking action to lower the cost of energy, including its reversal of the offshore oil and gas ban, as well as the Fast Track and Electrify NZ plans to streamline consents. He also said the Electricity Authority and Commerce Commission were establishing a task force to tackle volatile wholesale market prices.

Suze Redmayne said Jones and Brown - along with Social Development minister Louise Upston, Forestry Minister Todd McClay, and Rural Communities minister Mark Patterson - had been engaging with everyone involved and working on a plan, but could not get it over the line.

Ahead of the mills' closure, the Prime Minister said the government would not intervene, as it was a commercial decision.

Right decision

ACT Party leader David Seymour said not intervening was the right decision.

"Unfortunately, any government that goes out to prop up a business, no matter how much your heart tells you you should, your head reminds you actually you can't do it, you're just delaying the change," he said.

Seymour assigned blame to the previous government's energy policies for the closure.

"It brings into sharp relief the reality that you can't pursue all sorts of goals about climate and the environment and hope that somehow there'll still be jobs at the end of it."

Te Pāti Māori co-leader Debbie Ngarewa-Packer, whose Te Tai Hauaru Māori electorate also covers the Ruapehu region, said she had spoken to iwi and community leaders about the closure.

"It'll be devastatingly received. It's not the outcome anyone was hoping for, and we need to have the government's intervention in these types of kaupapa when they're the only ones with the ability to negotiate with the power companies."

Lack of government assistance questioned

Ngarewa-Packer questioned why the government could afford to bail out Ruapehu Alpine Lifts (RAL), but not another major employer in the region.

"If this is the outcome and they are not proposing anything else, then they need to immediately get into that community and provide an alternative solution. The easy thing would have been to figure out the energy problem, but the second thing has to be that they get in there and find a plan b. It's just too devastating for this community."

Redmayne said Winstone's situation was different to that of RAL.

"I don't think Winstone Pulp wanted a short term handout. They needed a long term solution in terms of power supply and pricing. A short term fix wasn't really an option," she said.

"And the other thing is as a government we've only got limited funds, so the reality of bailing out just one regional business would set a precedent, because there's so many other businesses that are also facing the same circumstances."

Labour's small business and manufacturing spokesperson Helen White said the closure would affect the whole community, and that there were options to keep the mills open.

"There were specifics involved. There's things like the reliance on power and the price that Mercury was offering. I could see room to broker a deal and I'm so sad that hasn't happened," she said.

She criticised the government's decision to stop Industry Transformation Plans (ITPs).

The ITPs, which were in eight sectors, including forestry and wood processing, were designed to support industries with potential for higher productivity and lower emissions to meet the previous government's industry policies.

They were stopped in the government's first 100 days, as part of National and ACT's coalition agreement.

"We had a training plan for that industry, because we valued it. All that's gone. Where's the plan? Where's our manufacturing plan that supports our people in these small towns?" White said.