Disappointment over lack of government intervention to save 230 Winstone Pulp mill jobs

The government is coming under fire for not stepping in to help save 230 mill workers from losing their jobs.

Winstone Pulp International near Ohakune has confirmed it will close indefinitely from next month, which is expected to decimate local communities who rely on the mill as the largest employer in the area.

There was hope the government might intervene after ministers and mill management met several times to discuss unsustainable wholesale power pricing.

Mill worker and E tū union delegate Daniel Abernathy told RNZ that what's put salt in their wounds is seeing Prime Minister Christopher Luxon over in Malaysia promoting New Zealand investment opportunities just last week.

"He was talking about being in Malaysia and trying to encourage Malaysian owned businesses to come and invest.... well we are a Malaysian owned company, so how are you going to get others to come if you're not looking after the ones we've got working here?," he said.

Mayor Weston Kirton was also feeling incredibly disheartened and dejected about the closure, and lack of government support.

"Our council is so disappointed the fact it's ended up like this. We did go to central government, we thought there could be a package to bail out this company because they (power companies) have made so much profit out of energy and that appears to be going into government coffers instead of the pockets of our local people.

"That's what hurts the most, the fact that money earned from energy companies is not going back into industry. I was so upbeat about the prospect of something coming out of this and we fought pretty hard on behalf of the community," he said.

Labour leader Chris Hipkins told RNZ that more financial help from the government should have been offered as a short term fix while the energy market's fundamental issues were sorted out.

"If the government decided to divert some of the windfall gain that they are going to get from the mega profits that the electricity generators have created over the past few months, back into those communities - I would support them doing that," Hipkins said.

However, despite resources minister Shane Jones coming out fighting over the initial announcement to close the mill last month, and holding many meetings with many mills, the government decided not to intervene.

"Sadly we don't have the fiscal resources to underwrite every factory in New Zealand," he said.

Energy Minister Simeon Brown was also defending the decision.

"You know the government can't intervene in every business and industry, a lot of work happening and it's all about ensuring New Zealand has globally competitive energy prices," Brown said.

Although, both Shane Jones and Chris Hipkins do agree on one thing - pulling energy companies into line.

"Unless we create a system where we have affordable and internationally competitive power prices I fear we are going to see other manufacturing entities also decamp," Jones said.

Hipkins also wants to see stricter regulation.

"We can't afford to lose manufacturing in the way we are likely to if the electricity market is allowed to continue to operate in the way it has been," he said.

The government is launching a review into the energy sector, but any changes from that will be far too late to save Winstone.

Daniel Abernathy fears for the tough times ahead that hundreds of workers and their familes are facing.

"I think the next four weeks will be testing times, but not quite as much as after that four weeks when the redundanies are starting to run out and people are trying to find work and realising they may have to leave out of the area," he said.