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John MacDonald: I want to like the NZ Steel deal - but I can't

Author
John MacDonald,
Publish Date
Mon, 22 May 2023, 1:15pm
Photo / File
Photo / File

John MacDonald: I want to like the NZ Steel deal - but I can't

Author
John MacDonald,
Publish Date
Mon, 22 May 2023, 1:15pm

If you find yourself needing $140 million today, don’t panic. Just get on the phone to the Government.

No means testing. None of that carry-on. You want it, you’ve got it.

And if they tell you where to go, ask them what NZ Steel did differently. Or, more to the point, what its international parent company Bluescope did differently.

Because, despite making nearly $3 billion in profit last year, the Government is chipping-in $140 million to help Bluescope and NZ Steel do a major upgrade of its Glenbrook steel mill which will cut the plant's greenhouse gas emissions by about 45 percent.

And they’re going to do this by replacing two coal-powered blast furnaces with a new electric arc furnace.

All up it’s going to cost $300 million. The Government’s putting in $140 million from the special fund it’s got to help industries reduce the amount of carbon they stick in the atmosphere.

Now you might be the same as me. I want to like what the Government’s doing with NZ Steel - but I can’t. Because I can’t see past the fact that the outfit that owns NZ Steel made a record profit last year of $2.85 billion.

It was $1.62 billion more than it made the year before. A 135 percent increase.

And good on them for doing that. I’m not going to condemn them for that. But how much gall does it take to make those kinds of profits and then take $140 million from us.

The head of NZ Steel said on Newstalk ZB today that the upgrade wouldn't be happening if the Government wasn’t putting money into it, adding that there’s nothing in it for New Zealand Steel.

Which says to me that all the propaganda NZ Steel’s parent company publishes online about its “commitment” to sustainability and the environment is just a load of hot air.

Aside from me, I’ll tell you who else should be really annoyed by this - and that’s our farmers. Do you think they’d like a bit of financial support to do their bit for the environment? Of course they would!

But all we’ve heard from the Government when it comes to farming is carbon taxing. But this international outfit gets a truckload of taxpayer money. An international outfit that has a truckload of its own money, into the bargain.

If there’s hope on the horizon, it’s the suggestion that Fonterra could be about to benefit in the same way. At least that’s a New Zealand-owned outfit. They’re making profits too - the most-recent half-year result was $800 million. Nothing like Bluescope’s exorbitant profits.

I suspect, though, that there is more to this deal with the Government than just the eco thing. I suspect that the Government sees this as a way to ensure the company keeps operating here in New Zealand. Because it has options. It’s a global outfit. It doesn’t have to stick around.

But, if that is the case, the Government should just come out and say so. And, even then, it wouldn’t change my thinking on it because I never like it when you get these giant international companies playing us off.

It’s happened many times before. If you don’t scratch our back - we’re out of here. We need to back ourselves and not let these outfits bully us.

So I’m not drinking the Kool Aid on this one. Yes, reducing emissions is brilliant. Yes, I’m happy for the Government to help industries achieve that. But I cannot stomach $140 million of taxpayer money going to a foreign-owned company that posted a record profit of nearly $3 billion last year.

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