The impact of big business closures on small towns - The Front Page

Economist Shamubeel Eaqub coined the phrase "zombie towns" in reference to those with little or no economic growth. Photo / Christine Cornege

Small towns on the brink of closure can prosper again if they are prepared to face facts and adapt to a new reality rather than fighting it, a leading academic says.

The Ruapehu district was already facing the prospect of a smaller population in the coming years, before news came that one of the area’s biggest employers was shutting down.

Winstone Pulp International closed two of its mills, with the loss of 230 jobs.

Meanwhile, in the South Island, more than 600 roles could go in a proposal to close the Alliance Group’s Smithfield meat processing plant in Timaru.

“The assumption is that everywhere will continue to grow, but that’s just not going to happen,” said Dr Sean Connelly, a senior lecturer at the University of Otago’s School of Geography.

“I feel bad for the people affected, and those communities. It’s likely to have a greater impact on those towns in the North Island, because they are smaller. Timaru is a more diversified economy,” he said.

He said the loss of younger people from single-industry towns would be felt across the board and could threaten the viability of schools in the area.

“It is something that’s has occurred frequently [in] the past and it is likely to continue if we’re willing to just leave this entirely to market forces,” Connelly said.

While some smaller centres may not be able to recover from the loss of population, they could adapt to a new normal, he said.

“I remember a number of years ago, Westport put up billboards in Christchurch talking about how cheap the housing was in Westport to try [to] attract people to move there,” he said.

Meanwhile, Reefton had repositioned itself as a heritage town following the loss of Government services and the closure of some mines, he said.

“It helps that it’s not too far from Christchurch, so it can capitalise on the weekend domestic tourism,” he said.

Those who weren’t located within the commuter belt of a city or couldn’t find a point of difference or tourism opportunity would struggle.

Policy and planning were geared towards the assumption all centres would grow in New Zealand rather than decline, which was also an issue, he said.

“Not everyone can market themselves or rebrand themselves or find a new identity. Some people or some places just won’t have the resources or the capacity or the physical attributes to do that. So, I think we should be having a conversation around whether it’s appropriate for these places to be left behind,” he said.

Listen to the full episode to hear more about the impact of big business closures on small towns.

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