September 26, 2012
Gunns has been entered into voluntary administration after posting a $904 million loss. The banks finally pulled the plug on Gunns.
Poetic justice for the history of Gunns corrupting the polity, cowing the media, poisoning public life and seeking to persecute those who disagreed with Gunn's proposal for a world-scale Bell Bay pulp mill in the Tamar Valley. They decided to fight the environmental assessment of the proposed pulp mill rather than negotiate with green groups and the local community.
Gunns, the logging of old growth native forests, woodchipping, and a pulp mill were, until very recently, seen to be the core driver of Tasmania's development. As Richard Flanagan accurately observes in the Tasmania Times:
The demise of Gunns brings to an end a tumultous three decades of Tasmanian history that began with Robin Gray losing the Franklin Dam battle to the Bob Brown led environmental movement in 1983, continued with Robin Gray losing both the Wesley Vale pulp mill battle and government to a Labor-Green government in 1989, and now the loss of Gunns and Gray’s third white elephant, the Gunns pulp mill.
Gunns wasn't able to make the transition to a plantation-based timber company. The company had a debt load and a declining asset base, and it faced a high Australian dollar and falling woodchip prices. Secondly, the plantation woodchip industry in Tasmania couldn't compete with the low cost chips exported from Vietnam and other places.
After the demise of the one big project maybe the Tasmanian state government can move onto considering a different kind of future--a clean, green, and clever state---as opposed to the old model of economic growth based on the exploitation of natural resources.
The AFR's editorial --Tasmania needs to pay its own way--- opposes this kind of development. It defends the old style development with foreign capital:
Tasmania faces a range of problems due to both external circumstances and its own making. Rather than expending so much effort in preserving their forests by blocking all development, Tasmanians should be working out how to pay their own way.....there is no reason for wealthier states to subsidise Tasmania if the state remains intent on preservation at the expense of economic development. Rather than government subsidies from the rest of Australia that it uses as working capital, Tasmania needs investment capital, including foreign investment, to develop its natural resources.
Tasmania cannot continue to rely on the substantial subsidies at the expense of resource rich states (WA and Queensland), so it has to get its house in order. So what does developing its natural resources mean after the global financial crisis? Ever more mining in the Tarkine with Chinese investment?
A Tasmania of small and medium businesses in the epicure food and beverage sector, tourism, informational technology and a science hub premised on Hobart being the gateway to Antarctica is not a future for the AFR. Yet it is the most realistic one.
The Giddings Labor Government's ongoing defence of the Bell Bay pulp mill as an economic driver is a good example of Lindsay Tanner's argument in Politics in Purpose that Labor was stuck in the 1970s when politics was over the battle for material resources within a nation state. It illustrates how Labor has become an electoral machine largely devoid of purpose other than defending entrenched commercial interests.