2 Feb 2011

Will Tassie Taxpayers Go Guarantor For Gunns?

By Peter Henning
New Tassie premier Lara Giddings brings plenty of experience to the job. So why is she making the same mistake as her predecessors and cosying up to Gunns? Peter Henning reports

As you consider the current Tasmanian political scene, forget the adage that has been applicable to Tasmania for most of the past decade: from bad to worse. With the ascension of Lara Giddings to the office of Premier and her factional stablemate Bryan Green to Deputy Premier, things have gone from bad to beyond bizarre in one fell coup.

And coup it was.

Just a few weeks ago Tasmania's then Premier, David Bartlett, offered the press a typically hubristic comment about his personal feelings of being Premier, saying he was now "comfortable in the skin" in the role. Bartlett's two years in the top job have been marked and marred by some severe flaws, including his self-centred personal style and his cultivation of a narcissistic image.

Another was the profound and complete contradiction between his rhetoric and his action. He came to office in 2008 promising to "clean up the mess" created by the government of his previous boss Paul Lennon, especially in relation to scandals which had seen the sacking of two deputies, and the very grubby process surrounding the enactment of legislation to allow Gunns to build a massive pulp mill in northern Tasmania's Tamar Valley.

Bartlett promised a "line in the sand" for Gunns to acquire funds for the mill, a timeline which would expire at the end of December 2008.

Both promises were never mentioned again, and Bartlett's mantra of being "kind, clever and connected" with the public was doomed. During the March 2010 election campaign Bartlett and Treasurer Michael Aird stated that they would never serve in a coalition arrangement with the Greens — and Bartlett promised to hand power to the Liberals if the election produced a hung parliament and the Liberals beat Labor in the overall count.

The election duly delivered a hung parliament and a Liberal majority vote. Both Bartlett and Aird reneged, and a Labor-Green coalition government was formed, with Greens leader Nick McKim and his colleague and partner Cassy O'Connor holding cabinet positions.

As time went by Bartlett and McKim developed their own mutual admiration society — with two members. By the end of 2010 it was apparent to the Labor power brokers that nobody believed anything that Bartlett had to say about anything, that his claims of transparency and honesty were a tattered joke, and that he had well and truly lost the trust and respect of the public.

But most serious of all his flaws was Bartlett's complete ignorance of economic management, and his failure to grasp the perilous state of Tasmania's finances throughout his time as premier.

The grandiose schemes for intensive irrigation of Tasmania's dry and thin-soiled midlands he proposed — as the best watered and most agriculturally productive parts of the State were being taken over by massive pulpwood plantations — typified this acute lack of sound judgement.

By the end of 2010 Bartlett had shown that he was completely out of his depth. He had to go.

Lara Giddings was the only heir apparent. In fact, she was the only senior minister left standing. There was no other choice. She has been Treasurer since Aird retired late last year, but has not had a job outside the Labor cursus honorum system since she was 23. Like her recycled deputy (Bryan Green left the position as Lennon's deputy under a cloud, then survived two hung juries involving criminal charges) she is a sure-fire supporter of Gunns and of the close alliance between corporate executives, union bosses and Forestry Tasmania officials (a field top-heavy in ALP apparatchiks).

Ostensibly Left, she also has no problems from the Right, especially in terms of the strong residual influence of Lennon, whose relationship with Bartlett was as frosty as anything we witnessed between Howard and Costello.

But before going further, the matter of Tasmania's mad and inane obsession with woodchips needs a little background.

When Lennon imploded in 2008, the ALP had no intention of changing tack from the essence of his political vision: "all the way with Gunns' pulp mill". But from late 2009, it became apparent — even to Gunns themselves and to Tasmanian government ministers sent on overseas jaunts to help Gunns get a joint-venture partner — that native forest woodchips and pulp were no longer an acceptable commodity in the international marketplace.

When Gunns' institutional investors saw the writing on the wall, they forced reform by replacing boss John Gay. All stops were then pulled out to restructure the Tasmanian forestry industry to facilitate Gunns' survival. Bartlett, with the support of McKim, installed a "roundtable" of industry stakeholders plus selected environmental NGOs (The Wilderness Society and ACF), whose brief was to thrash out "Principles of Agreement" to meet the new strategic direction sought by Gunns.

In a nutshell, the aim was to transform the whole industry into a plantation-based enterprise to help Gunns get the finance it needed for the pulp mill. This involved slashing hundreds of jobs across the sector in Tasmania and elsewhere, closing down sawmills across the state and devising a compensation package for contractors to leave the industry.

In the months before Bartlett resigned as Premier, the roundtable had agreed to meet Gunns' main agenda, especially in providing a united voice for a plantation-based pulp mill. The ENGOs fell over themselves in support, believing they would be able to claim to their inner-city strongholds in Sydney and Melbourne that they had saved Tasmanian native forests from clear-felling for woodchips. And Gunns immediately claimed loudly that the ENGOs had at last provided the social licence, the community support they could now use in negotiating with prospective joint venture partners to build the mill in the Tamar Valley.

Which brings us back to Lara Giddings' first day in office January 2011.
One of the first things she did as Premier was to float the possibility of the Tasmanian government being guarantor for Gunns pulp mill. This is a $3 billion guarantee. If it eventuates, it will certainly guarantee some nasty things for Tasmanians in the future.

Just as Paul Lennon broadened community division when he turned the Tasmanian parliament into a planning authority for Gunns back in 2007, if it transpires that taxpayers underwrite the mill, those divisions are bound to intensify. In that sense, a guarantor commitment is not just economically unsustainable, but reprehensible in its broader social implications. It would be the worst possible outcome for Tasmanians and their future.

Lara Giddings might have been in the Tasmanian parliament throughout the Bacon, Lennon and Bartlett administrations, but if she is serious about Tasmanians going guarantor for Gunns she has demonstrated that she does not understand the issues which have been raised and discussed in detail and in depth for years now about the establishment of a pulp mill in the Tamar Valley.

The issues go well beyond environmental protection. They include fundamental questions about the direction of Tasmania's economic, social and environmental future, how scarce public funds should be allocated for the public good, and how the connections between regional, rural and urban Tasmania in land and water use are to be sustainably maintained and developed.

Furthermore, it is unknown whether essential government services in areas such as health and education and infrastructure could actually cope if taxpayers had to foot the bill for a $3 billion private project which hit the rocks.

Tasmanians were told by Treasurer Giddings late last year that they were in for straitened times and cost cutting measures, reiterated when she became Premier.  Tasmanian farmers, whose flood losses in January account for a significant proportion of Tasmania's vegetable production, have already been told not to expect any Tasmanian government assistance.

Finally, independent cost-benefit analyses (here (pdf) and here) of a huge pulp mill, as enshrined in legislation passed by the Tasmanian parliament in 2007, have all been ignored by successive Tasmanian governments — even though they all point to negative outcomes for Tasmania, from job losses to further degradation of the environment, to a less diverse and more insecure industrial future, and to increased pressures on essential services.

If the Giddings Government transfers the risks of the Gunns pulp mill from the venture partners to the Tasmanian public, the likely outcome will something like what has recently happened in Detroit, or is now occurring in Ireland and Iceland, societies whose futures have been mortgaged beyond repair.

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daiskmeliadorn
Posted Wednesday, February 2, 2011 - 14:41

Unfortunately the <a href="http://www.search.org.au/archives/2311">recent forestry agreement</a> in Tasmania means that the major enviro NGOs aren't in a great position to push Giddings for real change and a vision of a Tasmanian economy that's more than just woodchips.

The problem of cosy relationships between elites in Tasmanian parliament and Gunns is important - but who is going to take a stand when Environment Tasmania, The Wilderness Society and the Australian Conservation Foundation are so committed to the industry?

Jazzmaster_George
Posted Thursday, February 3, 2011 - 13:20

A$3B underwriting? Yet another example of private profit, socialised losses. The free market is fun, until it bites you.... The Greens shouldn't be contemplating this - time to flex some coalition muscle?

Leaky Tap
Posted Thursday, February 3, 2011 - 15:41

(This comment has been removed)

Leaky Tap
Posted Thursday, February 3, 2011 - 17:40

(This comment has been removed)

123pete
Posted Thursday, February 3, 2011 - 21:42

This paints a gloomy picture, if it is accurate.

This user is a New Matilda supporter. chrisdoonan
Posted Saturday, February 5, 2011 - 02:25

The question is: Why is she making the mistake of her predecessors and cosying up to Gunns? Why indeed?