Goodness gracious: The National Party has come out against corporate welfare! Or at least it is dead against the government’s $140 million subsidy deal with New Zealand Steel. The deal will enable the installation of a new electric arc furnace, will reduce the company’s reliance on coal, and will mark a significant step towards meeting our international climate change commitments.
The government contribution to the deal consists of $110 million in base funding, with the other $30 million taking the form of incentive payments that NZ Steel will receive only if it can get the new furnace up and running by 2027, and only if it can achieve by 2030 an extra 800,000 tonnes of annual emissions reductions over and above the reductions stipulated in the base agreement. The contract also contains clawbacks for under performance.
Reportedly, NZ Steel is this country’s only supplier of the 670,000 tonnes of steel products used annually in housing, construction, manufacturing and agriculture. The company will be contributing a further $160 million to the project. The deal will enable the company to halve its coal use and its related greenhouse gas emissions, to the annual equivalent of taking 300,000 cars off the road. That’s a figure comparable to removing all the annual emissions of all the cars in Christchurch, according to some estimates.
Two other aspects of the deal seem worthy of note. As Climate Change Minister James Shaw has explained, the subsidy will not be taxpayer money taken out of the Consolidated Fund. Instead, the subsidy will be money recycled from polluters under the emissions trading scheme, and paid previously by them into a separate industry de-carbonisation fund.“ It will be polluters paying for the de-carbonisation of other polluters,” Shaw says, “and that can only be a good thing.”
Whatever the source of the funds, National would presumably want them paid straight into its lolly jar for tax cuts. According to National Party leader Christopher Luxon, the NZ Steel deal is an “outrageous” case of government over-spending, and the company should have paid for the entire cost by itself. For good measure, National has slammed the subsidy as corporate welfare.
For its part, NZ Steel says the transition to electricity wouldn’t have happened at all without the subsidy, but they would say that, right? In this case though, the NZ Steel claim might well be true. The company is a subsidiary of the Australian multinational Bluescope Group, which had revenues of almost $13 billion in 2021.
Yet the viability of the New Zealand Steel plant – which not only makes the essential steel used in this country but whose furnaces give us the ability to recycle steel scrap – would be marginal if it remained entirely coal-driven, given the rising price of carbon, and the ten year window before other forms of energy generation ( such as hydrogen) become viable options.
According to Shaw, the Treasury was on board with the deal. As things stand, National has declared itself firmly opposed to the biggest single reduction of climate change emissions in New Zealand’s history.
That hostility will be a political liability. One of the things voters really dislike about politics is when opposition parties react negatively to policies not on the grounds of principle or common sense, but purely for opposition’s sake.
National’s knee jerk reaction to the NZ Steel looks like a classic example. In passing it is also evidence of the party’s drift to the extreme right of the political spectrum. Sink or swim, corporate New Zealand is being told. That’s because the current National Party appears to think that any partnership between business and government is a sin, just as surely as taxation is theft.
In line with this hostility to all forms of collective action, National has also opposed the Budget’s scrapping of the $5 prescription charge. If elected, National will reinstate the prescription charge for everyone except people with community cards. Basically, the new hard right National Party seems to have set itself against any entitlements that have not been means tested, regardless of the administrative costs of the targeting. By that logic, universal entitlement to pensions must soon be on National’s chopping block.
Only the deserving poor, it seems, will qualify for help from taxpayers under a National government. Or so says the Man Who Used To Run An Airline that received massive government subsidies and bailouts.
National’s drift to the right has been evident in other ways, as well. For all the talk about cracking down on crime and keeping people safe, National is promising to abolish the fire-arms registry. Despite railing against handouts, National is promising to give property speculators a huge tax kickback on the interest they’re paying on their rental properties. The large number of MPs who own rental property will be among the lucky recipients.
Moving right along… National’s Chris Bishop also wants to restore the ability of landlords to kick tenants out of their homes and jack up rent without having to offer a cause. National also wants to bring back the live export shipping of farm animals. And so on.
No amount of this pandering by National to reactionary old white males living in rural New Zealand seems likely to stem the drift of the party’s natural supporters to the ACT Party, come October.
The erosion of its core urban support poses a dilemma for the National caucus. Can they really afford to stick with their widely unpopular leader, regardless? A leadership change at this late stage might look like an outbreak of disunity that could cost them the election. Yet so might sticking with a leader that the public roundly dislikes, and who also seems unable to read the mood of the boardroom.
The clues to Succession
Talking of boardrooms…. Fans of the Succession TV series will have been turning once again to the John Berryman poem “Dream Song 29” for clues as to how the series might pan out. As many people are aware, the name of the final episode in each season has been taken from the Berryman poem, working backwards from the poem’s conclusion. The line chosen for the show’s final episode is “ With Open Eyes.”
You can read the entire poem here. ( It is very short.) The use of the Berryman poem supports the view that the show’s central character is Kendall Roy who most closely resembles the angst-ridden Henry of the poem.
The title of the season one finale “Nobody is Ever Missing” capped a season in which although someone definitely did go missing, the death has continued to haunt Kendall ever since. Season two’s finale “This Is Not For Tears” concluded with Kendall refusing to be the family’s blood sacrifice” demanded by his father. Season three’s “All The Bells Say” ended with the betrayal of the siblings’ takeover plan.
In case anyone thinks “With Open Eyes” sounds like an optimistic welcoming in of the sunlight, keep in mind that the relevant line of the poem actuaaly reads “Ghastly, with open eyes, he attends, blind.” There’s not much in the way of good news for Kendall (or anyone else) in that line, one would have thought.
Song For Berryman
Here’s the old Okkervil River song Will Scheff wrote about John Berryman. Warning : it deals with his suicide from the Washington Avenue Bridge in Minneapolis, in January of 1972.