Fears mill closures could create 'ghost towns' in the central North Island

• Winstone Pulp International in the Ruapehu District has closed its two sites after 45 years of operation
• 230 workers lost their jobs
• The mill is the main employer in the central North Island region, with most of its workers living in Raetihi, Ohakune and Waiouru

Amid the cheerful chatter of children playing at Raetihi's community based Nancy Winter Early Childhood Centre, there is a palpable tension in the air, with worry etched onto the faces of the parents and carers.

Manager Brenda Burnard said the tight-knit community is reeling from the shock of losing its largest employer.

"It really does feel like a car crash happening in slow motion," she said.

Many of the childcare centre's families were being forced to move away to find jobs, or were being split up with one parent having to live elsewhere to work.

"We're going to be the ones to pick up pieces and that's sad. I'm not crying about it this week.. I just feel sad now, it's been done to us and it needn't have happened," said Burnard.

Her husband has lost his job at the mill, along with the partners of four of her staff members.

"Our region is losing skilled workers, our enrolments will drop - at the end of the day that's viability and sustainability for our centre," she said.

Burnard said it was hard to get the rest of New Zealand - and the government - to fully appreciate their situation.

"The number one thing that people from around the country don't understand is it's not 230 workers and it's not even the flow on effects from those workers - the impact would be less if we were based near a city and we could travel to work, to another major employer," she said.

'It could get worse'

Many locals fear Raetihi will turn into a ghost town as the ripple effect from the mill closure creeps into households.

The true impact is hard to quantify as a number of businesses connected to the mill are also losing workers or laying them off. RNZ understands a local logging truck company has had to let dozens of drivers go, and Napier Port and Kiwirail are also planning job cuts.

In Raetihi, Darren Dempsey has owned his bus company for 35 years, providing daily transport for mill workers during that entire time

"We've lost probably a third of our business, we've have had to lay off two staff and will have to sell some vehicles to recoup come of our costs.

"It's not easy and in the long term we don't know how it's going to go really, it's still early on," he said.

The town has seen an increase in houses going on the market as workers leave for Australia or other regions, and Dempsey believed many more people will also be forced to move, which will hurt local businesses even more.

"There's been a huge flow on effect already and I'd say it's going to get worse before it gets better," he said.

Down the road, Raetihi's Coach Cafe and takeaways is also taking a hit. Owner Angie Robson told RNZ they were down about $800 a day compared to a year ago, as people tighten their belts or move away.

"I've laid off my husband of all people, but it meant I could keep my part time staff, so he's gone back to his old job.

"It could get worse, but we're in for long haul hopefully," she said.

Angie was most worried about staying open so her staff can have an income, and said even if she did want to move away, her house has already dropped in price.

"No one is going to want to buy a business and a house in an area that even the banks are saying they don't know if we'll survive the next year. That came from my bank manager which I was quite horrified at," she said.

The resilient community was being tested to its limits, and Brenda Burnard worried about how much people can take.

"The social impact is going to be huge for mental health. Knowing we are losing more nurses because of this, and losing skilled workers, people that are the pillars of the community," said Burnard.