LETTER FROM CAMERON: Get the Blinkers off, Gunns!

The pulp mill draft IIS, Vol 1 Section 3.1, states: “Value-adding and the production of more complex differentiated products are important for economic growth…they result in less sensitivity to exchange rate fluctuations and price competition than the simpler commodity product (woodchips).”

This claim is directly contradicted by the recent report issued by CommSec, which stated that the mill would never be cost-competitive, and provided no guarantees of security given the volatility of the global market for pulp. The same report stated that the mill was financially risky and dangerous, as reported in The Mercury on May 31. Gunns’ current share price (approx $2.50 or thereabouts) values the company at about $850 million, which widens the gap between its financial security and the capital needed ($1.4 billion) to proceed with this development.

Section 3.2 states: “The alternative to establishing a pulp mill is a ‘do nothing’ option, that is, continue to export woodchips to international pulp mills for processing.”

This, I’m afraid to say, is patent rubbish. In 2004 the Tasmanian Greens released their Forest Transition Strategy, which did exactly what this quote denies: it laid out an alternative proposal to the pulp mill. “A pulp mill,” the FTS document states, “is not in the best interests of Tasmania’s strategic direction. It would continue Tasmania’s ‘quarry mentality’ as a price-taking undifferentiated commodity producer. This is the opposite of making high-quality low-volume goods for the world’s top niche markets--and it returns less jobs for more wood and more investment than the other options.”

Read the overview of the Greens’ FTS here

But there’s the thing, Readers: why is Gunns Ltd’s proposed pulp mill more viable, more beneficial, than the alternative set out in the Forest Transition Strategy? By alienating themselves and their supporters from viable alternatives—or indeed any alternative at all—the credibility of the pulp mill’s proponents is exposed to question. Through a disproportionate level of taxpayer-funded support and by dint of their own resources and capital, Gunns Ltd have built a myth for themselves that suggests the pulp mill should represent the only way forward for the Tasmanian economy.

I have to assert that this is not so. I don’t expect the blinkers to come off, but I don’t accept the propaganda either. I suppose it has always been thus in Tasmania, where our environmental heritage is concerned. The big end of town has all the answers, which of course is convenient when they are given free rein to ask all the questions.



Cameron Hindrum,

Launceston