Matthew Denholm quotes Saul Eslake
The dark days into which Tasmania sank in the 1990s were not primarily a response to Wesley Vale falling over, but were instead a consequence of the fiscal ineptitude of the Gray government, which required subsequent governments to impose contracting economic policies in order to clean up the mess that Robin Gray left. Rather than illustrating the failure to get major investment projects, it illustrates the consequences of unduly relying on them.
For his part, Lennon has justified his attempts to fast-track the project by warning that if it falls over, Tasmania will go “back to the mid-1990s”, dark days when `6500 jobs were lost in a 15-month period.`
Similar assertions are made by Robin Gray, a former Liberal premier who pushed the doomed Wesley Vale pulp mill proposal in 1989.
Now a Gunns board member, Gray recently told Launceston’s The Examiner “This is our last chance. If this mill is stopped, investment will dry up, investors will simply decide it is too hard to do business in Tasmania.”
But with state unemployment at a record low and growth forecasts not predicated on the mill, several senior economists reject Lennon’s warning of a return to dark days if the mill does not proceed.
“It is not sound economic logic,” says Saul Eslake, an economist with the ANZ Bank.
“The dark days into which Tasmania sank in the 1990s were not primarily a response to Wesley Vale falling over, but were instead a consequence of the fiscal ineptitude of the Gray government, which required subsequent governments to impose contracting economic policies in order to clean up the mess that Robin Gray left.
“Rather than illustrating the failure to get major investment projects, it illustrates the consequences of unduly relying on them.
“The long-standing Tasmanian model … of attracting energy-intensive commodity processing basically came to grief in the 1990s when commodity prices reached rock bottom.
“Tasmania missed out on a lot of the other developments in the global economy that were happening at the time.
“So I wouldn’t agree with the assertion that if Tasmania fails to get the Gunns pulp mill, it inevitably is going to go back to where it was a decade ago.
“(Late Labor premier Jim) Bacon and Lennon have done a pretty good gob of dramatically improving Tasmania’s public finances. In some ways it would be a harsh judgement on their track record to argue that their failure to secure a project that they haven’t had over the past 10 years would somehow now mean that Tasmania would go back to where it was 10 years ago.”
Eslake, born and bred on Tasmania’s north-west coast, helped draft Launceston’s Vision 2020 plan — a blueprint for the community’s “vision, priorities, goas and values.”
He argues that rather than staking its future on “one or two mega-projects”, Tasmania’s prosperity depends on its ability to produce and market premium goods and services with a “high intellectual content”.
As an example he points to the “four Ws” — wool, wine, wasabi and wagyu beef — as well as cheese, onions and salmon. “And that’s only in the agricultural sector.”
Eslake is critical of Lennon’s decision to conduct a narrow “benefits study.”
“If you’re going to make a decision you need to know about the costs as well as the benefits,” he says.
The Government declined repeated requests to explain the extent to which any such costs would be examined.
Saul Eslake was quoted in The Weekend Australian Magazine special feature, Trouble at Mill. How the chef, the farmer and the fisherman are fighting to save their valley.
Earlier: The dangerous distraction