THEN: Tasmania’s 10 worst decisions

Tasmanian Times

On Sunday, October 27, 1996, The Sunday Tasmanian published Mercury and Suntas Chief Political Writer Michael Lester’s analysis of Tasmania’s 10 worst decisions of the previous 16 years. He followed it later with the 10 best decisions. It was a fascinating analysis: here is a summary from the clipping files …

The special feature began:

It’s a depressing story … Tasmanians get less pay, die sooner and are robbed more often than other Australians. The state’s population growth is lower than anywhere else in Australia and there are more out of work. Why? Lost opportunities and monumental short-sighted blunders. State Affairs Writer MICHAEL LESTER reports TASMANIA might be a vastly different place today had it not been for its record of missed opportunities, poor decisions and short-sightedness.

Tasmania’s 10 worst decisions in the past 16 years have potentially cost the state thousands of jobs and countless millions of dollars in investment.

Floating Dock, 1980
Former premier Doug Lowe went to Moscow to negotiate a deal with the Soviet Government to bring the dock to Hobart to repair ships. The project was cleared by the Department of Foreign Affairs and ASIO but was scuttled by Liberal prime minister Malcolm Fraser after a reds-under-the-bed, Soviet spy-scare campaign waged by then federal Denison MHR Michael Hodgman.

Fishing Fleet
The dock proposal had a sequel in 1988 when Russia’s Southern Ocean fishing fleet was searching for an Australian port to service 50 ships which would also have seen 25 international charter flights a year into Hobart airport. Had Tasmania made the most of the first opportunity, it probably would have gained the second. Instead, it gained neither.

$500 million
The Gray Government’s rejection of a $500 million offer from Malcolm Fraser in January, 1983, as an incentive to defer the Gordon-below-Franklin power scheme and to proceed with the construction of a 200-megawatt coal-fired thermal power station must count as the third big missed opportunity of the past two decades … it would have put Tasmania 15 years ahead in establishing a cheaper non-hydro power source. Tasmania eventually negotiated a lesser dam compensation package with the Hawke Government worth $240 million — paid in annual instalments — which with inflation grew to about $350 million over the next 10 years. The problem with the Gray-Hawke deal was that what the Federal Government gave with one hand it took with the other by cutting grants to Tasmania so that in the end the state was no better off.

Compensation
Arguably the fourth big mistake of the era was how the state used that dam compensation money. The Gray Government used $275 million of it to subsidise the King and Anthony power schemes. However, high interest rates on money borrowed to pay for the two schemes — which cost a total of $900 million — and the HEC’s inability to sell the relatively expensive power at a price high enough to recoup the costs are now being blamed for its relatively poor financial position. The rest of the dam compensation money was spent on other job-creation schemes such as the $6 million upgrading of the Hobart airport which, after all, was a federal responsibility, $3 million on the Wynyard airport and $15 million on the Zeehan-Lower Pieman road. The Gray Government simply dismissed other possible uses for the compensation money, such as former Labor leader Ken Wriedt’s plan to use some if it to offer low-interest loans to attract new industries and to fund a range of projects around the state.

Wesley Vale
The fifth missed opportunity was the state’s inability to resolve the debate over the proposed $1 billion Wesley Vale pulp mill. …At one stage or another, everyone accused North Broken Hill of being arrogant, of refusing to consider alternative processes and for setting unrealistic deadlines for decisions to be made. … However, no matter who was to blame the end result was that Tasmania lost the investment and the jobs that would have gone with it, sent out signals to the world that you can’t do business here and deferred for at least a decade the opportunity to move from woodchip exports to further downstream processing.

Strait Ferry
The Field Government’s costly decision to buy the Spirit of Tasmania to replace the ageing Abel Tasman. Tasmania paid $172 million to buy the Spirit and modify it for use on the Bass Strait run and much of the money had to be borrowed at a time when the state had a debt problem. Labor was under heavy political pressure from the Liberals and northern interests to make a decision quickly and ignored advice, even from within its own ranks, to defer a replacement for four or five years. A deferral would have allowed the former Bass Strait Seacat service to prove itself financially and for Incat to build a bigger, cheaper and more stable boat. Instead of one ferry, Tasmania could have afforded two — and imagine the boost to tourism and business that would have generated, coupled with the new Federal Government vehicle subsidy. Now Tasmanians learn that the Spirit is worth only $114 million because of a glut of European-style ferries on the market and the huge growth in demand for fast ferries.

Forest Venture
There are very few places in the world where a government would pay for a project not to go ahead but the Field Government did it in the form of a $3.5 million compensation payment to stop the Huon Forest Product venture. Labor and the Greens were opposed to the woodchip and sawlog flitch mill joint-venture project before the 1989 election on a range of environmental grounds, including the number of trucks it would have directed through Hobart, and inadequate assessment of the southern forest resource.

Link Road
History may one day prove that the $30 million-plus already spent on a dirt, below-standard road on the West Coast used by few people to be a good investment. … Again it was built more with an eye to votes than need.

Sell-out
One of Tasmania’s biggest economic problems is the lack of capital, partly because of the fact that most company head offices are located in Melbourne or Sydney, or overseas. During the 1980s almost every moderate sized-company Tasmanian company sold out to interstate or overseas interests, and with the ownership went the profits. They include retail chains such as the former FitzGeralds and Harry’s, media organisations ENT and Davies Brothers, and major parts of the state’s two breweries.

Natural Gas
… the unnecessarily long delay in proving whether or not Tasmania has enough natural gas reserves to be used as an alternative power source and whether development would be economically feasible.

AND

The 10 Best Decisions

World Heritage Nomination
The proclamation by the Lowe Labor government in April, 1981, of the extended South-West National Park and Wild Rivers National Park, and the official nomination for World Heritage listing of the park in August that year, had long-term positive ramifications for Tasmania. The Lowe government’s original World Heritage nomination might have been unpopular in Tasmania at the time but it stands as one of the most far-sighted and best decisions of the past 16 years. … Subsequently the size of the World Heritage Area was expanded by a nomination from the Field government under the Labor-Green Accord. Apart from the intrinsic value of protecting part of the Earth’s diminishing natural environment, which made it a worthy decision in itself, the World Heritage Area also became the foundation stone for Tasmania’s international tourism and primary industry marketing image.

Stopping the Dam
Had the Gordon-below-Franklin been built, it too would have caused a blowout in the debt costs. Despite the later King and Anthony power developments, the decision not to dam the Gordon River and flood the Franklin signalled the end of the era of hydro-industrialisation and led to the first attempts to diversify the economy.

TDA
The TDA has had its failures but when it was first set up Tasmania badly needed to diversify its industrial base. Since its inception, Tasmania’s export trade has increased from $774 million to $1.63 billion in the 1995-96 financial year.

Incat
Bob Clifford’s move into construction of aluminium catamaran passenger ferries might rank as number one in the top 10 decisions in terms of employment and economic benefits to Tasmania.

Aquaculture
Marine farming is one of the major success stories of the past 16 years. Direct government action in the early 1980s fast-tracked, and then nurtured, the development of the Atlantic salmon industry.

Mt Lyell
The financial support provided in 1985 to prop up the failing Mt Lyell mine when it was owned by Renison Goldfields Consolidated proved to be a good decision. Mt Lyell had been the lifeblood of the West Coast and its closure would have sounded the final death knell for Queenstown.

The Sheraton
It might not be pretty and many think that the Grand Chancellor (formerly the Sheraton) is the wrong design in the wrong place. However, the decision to attract a major international player to Tasmania still ranks as one of the best.

Daylight Saving
Daylight saving does not really fall neatly into the period but successive governments came under much pressure to change or abolish it from 1980 through to the present, so it deserves a place as an enduring social policy.

Debt Strategy
As with almost everything else that Tasmania desperately needed and which now rank as “best” decisions, the Field government’s move to reduce state debt in 1990 was about as popular as rats under the house.

Trading Hours
Tasmania finally moved with the rest of Australia and the world when the Legislative Council voted in November, 1994 to pass the Groom government’s legislation allowing Saturday afternoon trading.

Michael Lester is General Manager, CPR Communications & Public Relations Ltd, Hobart, a former Bacon Labor political adviser, and Chief State Political Reporter for The Mercury and The Sunday Tasmanian

Tasmanian Times publishes this clippings retrospective as a background precursor to further analysis … when readers’ comments will be welcomed.