This report undertaken by NZIER – sets out a framework for economic assessment of the proposal using a cost benefit approach, and considers the economic impact of the refinery’s spending and employment in the region.
- The report uses information on the financial costs of the deepening operations, forecasts for shipping volumes (with and without dredging); Statistics New Zealand and other source information on industrial activity and employment in the region
NZIER concluded that the benefits of the project will outweigh any costs incurred and as such, is economically viable.
The major benefit of this spending on the local economy is that it will enable the refinery to remain competitive with other refineries in the Asia-Pacific region, and therefore continue operating.
If the refinery ceased operating, it would have a significant negative impact on the local economy and regional well-being, which it would take some time to recover from.
This is because Refining NZ is a key employer in Northland, which has the second-lowest employment rate of all New Zealand regions and second-lowest labour force participation.
The refinery employs some 500 employees and contractors, 94 per cent of whom live in Northland. These are highly skilled and highly paid job opportunities, with the average wage higher than that in Northland generally. Staff and contractors are currently paid $68 million annually.
Regular maintenance projects and capital investments drive periods of increased local spending and employment, as well as stimulating local businesses.
The proposed changes will support the refinery to continue operating and providing benefits to the local economy for many years to come.
If you’d like to know more of the nuts and bolts of the economic effects of our proposed changes you can read more in the related downloads section below.