OPINION: Will Southland get the Taranaki treatment?

I hold no brief for Rio Tinto or its aluminium smelter but I am a fan of Southland, and I don't think Southland is getting a fair deal.

It's worse than that. Southland looks like it might be getting lined up for the "Taranaki Treatment" from the Government.

Rio Tinto is once again reviewing the future of the smelter, which directly and indirectly, pays the wage packets of about 3500 people in a region of roughly 100,000.

It happened in 2013 and 2017 as well. And every time people get a bit more cynical. There is no shortage of commentators around, and the odd cabinet minister, ready to tell Rio Tinto to take a running jump. Their tactics are too bare knuckle and obvious for a start. Sending a "closure team" out to wind up the locals looks a bit try hard.

123RF Southlanders are sick of subsidising the cost of power supplied to Aucklanders

But actually they have a legitimate point – or at least, the people of Southland do. People and businesses in Southland, including the smelter, pay too much to get their electricity delivered to them. More correctly they subsidise the delivery of electricity to everyone else, and they are sick of doing it.

The lower South Island produces much of New Zealand's power, and at the lowest cost, but they see no benefit from having the big hydro power stations in their neighbourhood. Electricity is expensive to shift around so it should make sense to set up your business near a power station, but it's not because electricity transmission costs are currently averaged across the country.

If you live over the road in Te Anau from New Zealand's biggest power station, you are not just paying to have your power delivered to you, you are paying to get it delivered to people in Auckland, 1700 kilometres away on a whole other island.

ROBYN EDIE/STUFF The Tiwai Aluminium Smelter is a big employer and export earner for Southland and New Zealand.

And as Auckland grows, it needs more power. Transpower, which runs New Zealand's electricity grid, has spent several billion dollars over the last decade upgrading their network and keeping the lights on, much of it for the benefit of Aucklanders.

And Southland people and the smelter have been paying for a lot of that.

The previous government put together a new Electricity Authority to, amongst other things, sort out a fairer price for electricity transmission. It's taken a while because it's controversial.

In 2016 the authority put up a fair proposal that would have saved Southlanders a lot of money. The smelter would pay around $20 million a year less than it does now in transmission charges, and other Southland power users would get a commensurate reduction.

STUFF We shouldn't subsidise the smelter, says former finance minister Steven Joyce.

But people in Auckland and Northland who would pay a bit more kicked up a big public fuss and so did politicians, including New Zealand First. The Authority went away to check its sums again. It has now come up with another, watered down plan. It still improves things for Southland, but only about half the amount as previously. And its still a few years away from coming in.

So it's not surprising the smelter is getting antsy, or anybody else in the deep south. Southlanders pay higher petrol prices because the population is smaller and there is less competition. They pay higher electricity prices because they are subsidising getting power delivered to Auckland.

On energy costs they never win. And they risk large industries leaving – industries that should be attracted to their part of the country because of the abundant cheap electricity that is generated there.

ROBYN EDIE/STUFF Staff pouring an aluminium cast at the official re-opening of Potline 4 at Tiwai Point Aluminium smelter.

Meanwhile the trendies in Auckland and Wellington opine that we'd be better off without the smelter anyway for all sorts of thinly argued environmental reasons. Of course it's not their lives that would be up-ended if it goes.

All this is grimly familiar to Taranaki people, who have had one of their largest highest-paying industries sacrificed on a Greenpeace-inspired oil and gas ban that is now generally accepted will do absolutely nothing to reduce climate change. Because of the complex interplay between coal, gas and electricity, it may be making things worse. It's certainly lifting gas and power prices.

And it is not just industry that is at risk in Taranaki and Southland. There was news out this week that the aggressive new water policy the Government wants to impose on food producers will disproportionately affect people and economies in places like Taranaki and Southland.

NICOLE GOURLEY/STUFF Aluminium ingots from the smelter at Tiwai sit at South Port in Bluff, ready to be loaded into containers.

Southland is also about to lose SIT, their highly effective local tertiary provider, which does a lot to provide skilled workers for the region, because people in Wellington say so. It will be replaced by a branch of a new national polytech run from somewhere up north. Do excuse Southland people for not being excited.

Our self-styled champion of the provinces might be a bit miffed that provincial people don't show appropriate levels of political adulation when he shows up with the taxpayers' cheque book and sprays $10m here and $10m there. The truth is his largesse is poor consolation for the damage other things are doing to the economic prospects of regions like Southland

We shouldn't subsidise the smelter. Rather we should stop forcing Southlanders to subsidise Aucklanders.

We should also revert to a more gradual water plan that gives farmers time to adapt, and we should let Southland retain control of SIT. Then we should get out of the way and let the sensible practical Southlanders get on with making a success of their province.

* Steven Joyce was minister of finance in the previous National government.