Letter: Great return from $30m

00:00, Aug 26 2013

Some of your Left-leaning correspondents seem to want to refer to the $30 million payment made to the smelter owners as a taxpayer donation.

Economics of course has never been their strong point as they spend most of the time whining about spy bills and other irrelevant matters.

In the case of the smelter and supporting businesses even if only half the affected people (say 1500) keep their jobs, the Government will receive around $120m in PAYE over the next 3 years and ACC will receive $18m in levies.

These people will, of course, also repay student loans and contribute to Kiwisaver.

In addition, they will spend their hard-earned wages at local businesses, who will then make a profit on their goods and services and will also pay taxes to the Government.

The spending also results in increased GST as well so the return on the investment I would say is pretty good.


This all ignores the income stream to Meridian.

The alternative is, of course, the smelter shuts and 1500 people then go on benefits which would cost the taxpayer $120m over three years.

Finally, keeping the smelter open creates confidence for people to spend and invest in Southland. With the previous uncertainty, many businesses and homeowners were delaying making investment decisions such as home improvements or upgrading vehicles, so it is great to see this cloud removed.


The Southland Times