Political Leaders lock horns over Government intervention at the Tiwai Point smelter

Two of Invercargill's leading political figures are at loggerheads about Government intervention at the Tiwai Point aluminium smelter.

Invercargill Mayor Tim Shadbolt has rallied community and industry leaders in a letter and called on the Government to show leadership over the smelter's uncertain future.

However, Invercargill MP Eric Roy yesterday blasted Mr Shadbolt, saying his suggestions for Government help could open a Pandora's box.

While the Government recognised the smelter had significant issues, intervention was not somewhere it wanted to go and it was not willing to make a special deal for one business.

"Does Tim [Shadbolt] want the Government to get involved subsidising everybody in New Zealand, for whatever reason in their industry?"

Some Southland business owners had told him if the Government was going to help Tiwai, they would then approach the Government with a proposal to help them because they too were in great difficulty, he said.

"It is a big danger when as a government you start to pick winners . . . it would open a Pandora's box and we do not know where that would finish," he said.

The Government believed Meridian had the responsibility to deal with its most significant client and that was happening, he said.

He had not spoken to the Minister of Finance or the Minister of State-owned Enterprises about the letter yesterday and his views were his perception on what the Government wanted, he said.

As Invercargill MP he understood the consequences of the smelter closing, he said.

"If the smelter, for whatever reason shuts down, it will be a train wreck for this province," he said.

Mr Shadbolt said he understood Mr Roy's concerns but the smelter was unique and could be differentiated from other industries.

NZAS general manager Ryan Cavanagh said the smelter was grateful for community and stakeholder support.

Mr Shadbolt's letter had not arrived to government officials yesterday, but State-owned Enterprises Minister Tony Ryall said he understood Mr Shadbolt's concerns.

"This is a tough and complex commercial negotiation but both Meridian and Pacific Aluminium want a long-term sustainable solution. And that is what the Government wants, too," he said.

The smelter had very good electricity deals over the years and those sorts of commercial discussions didn't happen over a short period of time, he said.