Union Bracing For Further Job Cuts: Call For Urgent Action On Energy Pricing

FIRST Union is bracing itself for more bad news this week as energy prices continue to impact New Zealand manufacturing, with more workers likely to lose their jobs in regions across the country, and union officials are urgently seeking intervention and direction from the Government to avoid a significant loss of manufacturing capacity and jobs in New Zealand.

Last week’s announcements of a production pause for FIRST Union members at Winstone’s pulp and wood mills in the Ruapehu district and the possible closure of OJI Fibre’s Penrose recycling pulp mill in Auckland due to high energy prices necessitated an urgent response from the Government.

"The response of the Government so far has been really disappointing, with Ministers seemingly more interested in blaming the previous Labour government rather than addressing the real problem at hand," said Dennis Maga, General Secretary of FIRST Union.

"The issue is not related to oil and gas exploration but runaway greed by power companies - Ministers must not deflect criticism of energy prices to meet their own ends and engage in pointless political point-scoring. A just transition to renewable energy has been and must continue to be central in any energy strategy."

"Without a strategy and a method to moderate power companies’ price-gouging, our entire manufacturing sector is at risk of being washed away by a tide of redundancies and growing unemployment."

"We’re calling on the Government to immediately establish an inquiry into unemployment and cost of living impacts of high energy prices on workers and businesses. Workers across all industries are also affected by the increase in power prices they are facing at home - $500 or more per month is not an uncommon electricity bill for an average working family - and that is far too high."

FIRST Union has for many years been highlighting the cost of the John Key-era electricity sector asset sales of 2013, in which 49% of formerly state-owned energy companies Mighty River Power (now Mercury), Meridian and Genesis were privatised, despite opposition by two-third of respondents in the 2013 Citizens Initiated Referendum. Mr Maga said the impacts of the privatisation and ten years beholden to private shareholders had enabled rampant profiteering by power companies, and by now, it was threatening the longevity of the country’s manufacturing industry.

In 2022 and 2023, FIRST Union, the NZCTU and 350 Aotearoa jointly published the Generating Scarcity reports, which noted that for every dollar invested in new generating capacity since partial privatisation, the 'gentailers' have paid out $2.41 in shareholder dividends.

"Generating capacity in this country increased just one percent in the decade after privatisation, while shareholders made out with $10.8 billion in dividends. This is textbook market failure stuff," said Mr Maga.

"We had good reason to oppose these privatisations under the Key Government. We are now seeing the impact of those policies, as surging household energy costs compound already-stretched household cost pressures and entire industries are in jeopardy."

"The Government must act now, because it’s not too late to save our manufacturing sector and these workers’ jobs."

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