Brenda Rosser

Look at the electricity generation industry. Hydro debt continues to spiral due to BassLink incompetence.[2] Bulk power users in the state are paying a mere.5 of a cent per kilowatt hour whilst ordinary Tasmanians pay about 20-30 times as much[3]. With prices for consumers set to continue to rise much further. Basslink needs to export constantly at full capacity in order to break even, and this is a very unlikely scenario given the predictable climate change and resulting loss of hydro water storage. As is usual warnings in the public submission process were totally ignored. Why?

TASMANIA’S economy is on the same trajectory as the global economy with one major difference. Tasmania bankruptcy is much more evolved. Compared to many parts of the Northern Hemisphere there really is very little left that can be monopolized, privatized, borrowed, logged, mined, fished and extracted. As bad as this appears the situation is worse still. Because, as the global financial markets collapse (due mostly to fraud and the resulting lack of investor confidence) the accounting figures both for the State and large Tasmanian corporations are no longer as amenable to the sort of dollar fiddling that has become the norm over the last few decades. The public are finally waking up to this sham accounting.

If you add together Tasmania’s unfunded superannuation along with the debt of all State trading enterprises you will find that the state’s financial liabilities are the largest of all the rated Australian states. Representing 110% of operating revenue! [1]

Look at the electricity generation industry. Hydro debt continues to spiral due to BassLink incompetence.[2] Bulk power users in the state are paying a mere.5 of a cent per kilowatt hour whilst ordinary Tasmanians pay about 20-30 times as much[3]. With prices for consumers set to continue to rise much further. Basslink needs to export constantly at full capacity in order to break even, and this is a very unlikely scenario given the predictable climate change and resulting loss of hydro water storage. As is usual warnings in the public submission process were totally ignored. Why?

In 2002 Forestry Tasmania (another Government business ‘enterprise’) had a $232 million debt to the Government. In 1991 the debt was higher, at $272 million, but it was reduced by way of FT selling a 50% share in its north-east pine plantations to a US-based resource company. It therefore has part-privatised part of a public resource to help pay its debts. Forestry Tasmania meanwhile continues to build the logging roads that open up areas like the Styx, Picton, Weld, Tarkine, North-East Highlands, Great Western Tiers and Tasman Peninsula (Fortescue Bay area) to clearfelling. Despite the fact that 70% of Tasmanians want these places protected from such destructive activities[4]. Over 90% of logs extracted from public native forests are turned into woodchips In 2000-2001, logging increased by 34% on the previous year – but profits to the state went down by 34%![5] Meanwhile employment in Forestry, Agriculture and Fisheries actually declined by 20% between 1996 – 2006. [6]

Of course Government business enterprise debt does not include the massive grants and subsidies that continue to be directed to private industry. Tasmania’s railways have been privatized and monopolized by one company who has failed to adequately maintain the railway infrastructure. In 2005 rail operator Pacific National threatened to close down its container service between Hobart and Burnie and Bell Bay. The move would have put 2000 trucks a week on the roads. A rescue package of $118 million was given to the company for the purpose of upgrading and maintaining the states 730 kilometres of railway track.[7]

Examine the huge subsidies already granted to Gunns Ltd and their proposed new pulp mill. Gunns Ltd’s study of the proposed benefits of the mill didn’t include ANY data relating to the dozen or so potential “negative data inputs”. The Monash people who documented this report said it was outside the scope of what the company had asked for[8]. Nevertheless it was on such a shoddy basis that our Federal and State governments are ready to not only approve the mill but also direct many, many millions of taxpayer dollars to such a scheme.

All the meanwhile, and alarmingly, the economic structure of the state continues to narrow[9]. It is not unusual for only one or a handful of companies to dominate whole industries. In fact, the state and federal governments have been actively promoting increasing private monopoly despite the large body of economic experience and historic literature evidencing the huge dangers implicit in such schemes. Over time taxpayer bail outs increase in frequency and scale because the government regards these corporations now as simply too big to fail.

With the state now populated by large transnational corporations they can pull their capital out at will if they are denied generous subsidies, tax lurks (MIS, for instance) and resource guarantees. The government’s control over the economy is very limited. There is now little room to move by way of increasing the state revenue base. This is further exacerbated by the enormous negative impact of the Australian ‘free’ trade agreement with the US. Among many other worrisome things Australia loses the ability to protect new, innovative services from full competition under ‘infant industry’ arrangements. Even if, in Australia’s view, it is clearly in our national interest for a new service to be excluded from the AUSFTA, we will be unable to do so[10]. So small up-and-coming enterprises now have to compete with large transnational corporations whose revenue far exceeds even the Gross Domestic Product of many developed nations.

Ironic isn’t it? Resource guarantees, grants and subsidies for large corporations, just through sheer political power. Not for undeveloped ones. It all just doesn’t add up!

Refs:

[1] Tasmania’s Standard and Poors Rating, November 2005

[2] 2007 – October 17th – The energy disaster

http://oldtt.pixelkey.biz/index.php?/weblog/article/the-energy-disaster/

[3] BassLink: The ongoing disaster. http://oldtt.pixelkey.biz/index.php/weblog/comments/basslink-the-ongoing-disaster/

[4] An opinion poll carried out by Professor Herr from the University of Tasmania in September 2001

[5] Forestry Tasmania’s Atrocious Environmental, Economic and Social Record

http://www.wilderness.org.au/campaigns/forests/tasmania/attrec/

22nd April 2002. The Wilderness Society.

[6] The examiner ran a front page (leading story) article on Monday 18th September 2006 called “ The New Tassie”.

[7] Rail rescue blow-out. NICK CLARK. 24th June 2006

http://www.themercury.news.com.au/common/story_page/0,5936,19569674%255E3462,00.html

[8] Peter Whish-Wilson. http://oldtt.pixelkey.biz/index.php/weblog/comments/mill-all-about-budget-creativity/

[9] spreporttas(stateof).pdf

Standard and Poors Australia and New Zealand

Publication date: 21-Nov-2005

[10] AUFTA. Chapter nine. Trade in services.