PORTLAND’S aluminium smelter — which supports 1100 jobs — would be an unsustainable taxpayer liability in a low-carbon economy, according to an independent public policy think-tank.
The Grattan Institute, estimates taxpayers could have to foot a bill of $160,000 for each worker each year if smelter operators nationally were given free permits under a proposed new carbon tax regime.
This would be on top of the estimated $2 billion in subsidised electricity for smelters at Portland and Point Henry during the past two decades.
These smelters are believed to consume about 20 per cent of the state’s power production, generated mainly by coal.
The institute’s Professor John Daley told The Standard this week there were good grounds to question continued government assistance for the smelters without a rapid shift to renewable electricity production.
“In the long-term they are very unlikely to survive unless Australia shifts its energy mix,” he said.
However, he predicted the Portland district would be strong enough to rebound if the industry was to close.
“Don’t underestimate the ability of the local economy to adjust,” Professor Daley said.
The Melbourne-based institute argues against governments investing heavily in ‘‘unsustainable regional industries’’, describing it as like pushing water uphill.
Its views drew an angry response from South West Coast MP Denis Napthine who is also Minister for Regional Cities and from Alcoa, a major partner in the smelter.
“I challenge Professor Daley to step out of his cosy office in Carlton and make his statements on Portland’s Civic Green,” Dr Napthine said.
“It’s absolute rubbish. His views are naive in the extreme. Portland would be decimated if the smelter closed
“It provides 600 direct jobs and 500 indirectly.
“It has driven Portland’s population growth and is by far the single biggest employer.”
Dr Napthine said Portland Aluminium was a far more efficient producer than similar industries in China and India, which produced two to three times more carbon per tonne smelted.
He said the state government was assisting Portland Aluminium get a fair deal under the proposed carbon tax.
Alcoa’s corporate affairs manager Tim McAuliffe said.
Portland Aluminium has contributed hundreds of millions of dollars to the local community since 1986.
He said the electricity pricing deal for the smelter was more a “shared arrangement” to cover the cost of building a high-voltage power line to the town in the mid-1980s and to ensure the industry was sustainable.