Answers needed on smelter—Mr Rowling

Press, 11 August 1980, Page 13

Answers needed on smelter—Mr Rowling

PA Wellington The Leader of the Opposition (Mr Rowling has sttacked the Government for giving its go-ahead for another aluminium smelter in the South Island without knowing all the . facts of the proposal. The Government had supplied so little information about the proposed smelter because most of the critical decisions had not yet been jnade, he said. A government of responsibility would have brought out a White Paper to look at the question, Mr Rowling said. Many fundamental questions still had to be answered.

“The people are entitled to know what the agreement is in relation to the price for power. “What is the reckoned cost of production . . . especially after the South Island’s alleged surplus is used up? What is the nature of the escalation clause? Is it to be based on the cost of the power, or is it to be based on the return for the aluminium? What guarantees has the company given on market accessibility?” asked Mr Rowling.

He said that by the. end of the decade Australia would have at least ten aluminium smelters competing with those in New Zeathav would have much

closer access than New Zealand to most of the key markets.

Mr Rowling also asked about other decisions that had to be made—the take or pay clause, the ceiling price, and the degree of commitment to downstream processing.

Nothing had been decided in this area, he said. There were no arbitration clauses and no payment dates. As well, a series of questions concerned the New Zealand taxpayer — those surrounding the investment allowances. Earlier, the Prime Minister (Mr Muldoon) was asked by the Senior Opposition Whip (Mr.. J. L; Hunt) how big an allowance the Government proposed to give the builders of the aluminium smelter.

Replying for Mr Muldoon, the Deputy Minister of Finance (Mr Templeton) said that negotiations between the Government and the proponents of the smelter were continuing.

“All negotiations have taken place in the context that the companies will be able to receive investment allowances permitted by law. “Thus it is likely that the Fletcher consortium will be eligible for a 20 per cent allowance in the form of a regional investment allowance. “The smelter, by virtue of

its production of aluminiumj ingots, will be ineligible for export incentives and hence,) export investment allowances,” said Mr Templeton.