Tasmanian Times

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. No price is too high for the privilege of owning yourself. ~ Friedrich Nietzsche

Economy

State ponders $100m Gunns compo. Booth’s threat

State ponders $100m Gunns compo Premier, ministers searching for extra forestry money

BY ALISON ANDREWS CHIEF REPORTER
04 Aug, 2011 12:00 AM

THE state government may have to find more than $100 million of its own money to pay Gunns forestry compensation.

The government would not comment on a possible payout yesterday but Premier Lara Giddings and other ministers have been in talks to work out the size of the compensation and how it will be funded.

It is understood that possible state funding of a Gunns package is necessary because the federal government has refused to be directly linked to compensation to the former timber giant.

The payout would compensate Gunns for its timber allocations after it decided to pull out of the native forest industry before roundtable peace talks started last year.

It is understood that the state government is considering whether Gunns may get some of the $43 million earmarked for community consultation and compensation for sawmillers wishing to exit the native forest industry.

Premier Lara Giddings said yesterday that the matter of compensation for Gunns was complex and was still being considered.

Gunns managing director Greg L’Estrange has indicated he expects significant compensation as part of the forest statement of principles agreement.

A condition on the sale of the Triabunna woodchip mill to Jan Cameron and Graeme Wood is that Gunns can delay the reopening of the mill for up to 12 months if it does not get the compensation it wants.

It is understood that the original Gunns demand was for $250 million but that has since dropped to $106 million.

Gunns needs the money to help retire debt and to try to raise the finance to start building its proposed $2.3 billion Bell Bay pulp mill.

Yesterday its share price closed at an all-time low of 22¢.

Read the full story in The Examiner, HERE

• Kim Booth sees red over Gunns’ compo claim

Tasmanian Greens MP Kim Booth has renewed his threat to try to bring down the State Government if it pays compensation to timber company Gunns.

The Liberals’ Peter Gutwein says forestry sources have confirmed Gunns wants $106 million to exit native forests in Tasmania.

Mr Booth, who is the Greens’ forestry spokesman, says that if Mr Gutwein is correct the claim is laughable.

“They made a commercial decision to do so and we absolutely oppose any compensation being paid and, in fact, I’m long on the record saying that were the State Government to pay any money to Gunns in compensation then I would move a no-confidence motion in the government and that still stands.”

Some forestry contractors are alarmed about the compensation reports.

A north-west coast contractor for Gunns, Charlie Davis, says he finds Gunns’ push for compensation disturbing.

Read the rest on ABC Online HERE

• Insider Trader, yesterday on Tasmanian Times: Gunns Tanks: I smell a corpse
As the Australian market falls 2 per cent, Gunns heads the list of losers in the All Ordinaries Index. Down 10 per cent, buying drying up, and the short sellers already stocking up on Bollinger.
The Gunns Share Price, HERE

• TAP to Blackflag the ALP State Conference.

WHERE: Launceston Country Club Casino
WHEN: August 6th at 12pm.

This is an opportunity for TAP to join in a big protest by unions, health and other public service workers and community organizations against the neo-liberal, fiscally incompetent, systemically corrupt and backward looking state government.

Tasmania has been called the Greece of Australia. Like the populace of Greece let us show this government that we reject their profligacy, mis-management and Don’t miss the TAP meeting this Thursdaytheir continued subsidy and propping up of the failed pulp industry.

Bob McMahon

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33 Comments

33 Comments

  1. Russell

    August 8, 2011 at 2:00 am

    Re #29
    I think you’ll find Kim Booth’s seat is a hell of a lot safer than McKim and O’Connor’s.

  2. David Obendorf

    August 7, 2011 at 8:38 am

    On 22 October 2011 the then Tasmanian Premier David Bartlett told Tasmanians that the Tasmanian Government had ruled out paying any compensation to Gunns Ltd for ‘handing back its native forest timber licences and for the roads the company has built’.

    “I can rule that out completely”, Mr Bartlett said yesterday [21 October 2010], before a meeting with Prime Minister, Julia Gillard about the [recently signed] forestry peace deal.

    [Reference: Mercury newspaper 22 Oct 2011 by Nick Clark: ‘Premier rules out Comp to Gunns’.]

  3. David Obendorf

    August 5, 2011 at 1:08 pm

    We might soon need a Tom-tom to navigate the ‘Toms’ on TT. [The same thing happened on the Fox Reward article.]

    As Claude Coburn once wrote: ‘Never believe anything until it is officially denied.’

    😉

  4. Mike Adams

    August 4, 2011 at 2:45 pm

    26. Please elaborate on this, I know you did so at TAP last night, but TT should know details.

  5. Tom

    August 4, 2011 at 2:21 pm

    David Obendorf, #28 why would a Greens’ staffer point out the duplicity of Kim Booth about Gunns’ compensation? Unless, you think the Greens are after him? No need for that, he has lost his seat already.

    More interesting to hear Paul Lennon signing the praises of Nick Mckim on ABC radio this morning. That says everything that needs to be said about the Tasmanian Greens and their fence sitting, gutless, directionless leader.

    Hope that satisfies your irrelevant curiosity about what I do for a living.

  6. David Obendorf

    August 4, 2011 at 12:47 pm

    Karl Stevens… if I am not mistaken Tom at comment 16 is a Greens staffer and he should declare that.

    I too was perplexed at what the Greens were going to perceive as ‘compensation’ as against a ‘buy-back’?

    Me thinks, the Greens Party want to FINALLY expel Gunns Ltd off the Taz-mania Monoplogy game board. If that means Jullia has to pay them out, then that’s “end justifies the means” stuff! Such a taxpayer-payout to Gunns Ltd will go to retire some of that company’s huge debt and the money caravan will on.

    The Greens seem to know that silk-road is leading to ultimate oblivion ….but Gunns ain’t going to any nether world quietly or alone, I suspect.

  7. RJ Peak

    August 4, 2011 at 6:07 am

    Re PB’s comments at #13 & #14, I am waiting for the ABC to undertake a similar examination of Ta Ann’s operations on Borneo, and elsewhere. With Gunns out of favour, even with its former collaborator FT, I expect that Ta Ann, for one, will assume a higher profile role in Tasmanian forestry matters. I am still waiting for an answer as to whether or not there is a “fit and proper” requirement for those with whom the Tasmanian government and its agencies do business.

  8. Tim Thorne

    August 4, 2011 at 1:33 am

    And when Gunns falls in a heap, what happens?

    (1) The millions we’ve given them have been flushed away.

    (2) Another company puts a proposal for a pulp mill and we throw money at them.

    But if this future company is smart (and if it comes from one of the signatory countries, like eg the USA, Chile or Malaysia) it will wait until the Feds have signed the Trans-Pacific Partnership Agreement, because then environmental assessment of any development will be outlawed as a constraint on free trade.

    You think the PMAA was bad?

  9. Heather Donaldson

    August 4, 2011 at 1:27 am

    #23 – Hear! Hear! John Hawkins. Well said!

  10. Steve

    August 4, 2011 at 12:12 am

    I think Bob (#11) is right on the money. If Gunns owes you money, now’s the time to start asking for it. Loudly and legally.
    There’s a whole bunch of contractors out there doing it tough, not because of turmoil in the forest industry, just for a very old and mundane reason. Gunns haven’t paid them. There’s people owed six figure sums and the first person to start serious legal proceedings is going to start an avalanche.
    Crazy thing about it all is that the only reason these debts aren’t being chased more vigorously is that people are scared of being off-side with the “establishment”. They don’t appear to have realised that the grand Gunns pulp mill vision very likely doesn’t include them.
    Chewed up and spat out comes to mind!

  11. john hawkins

    August 3, 2011 at 10:33 pm

    What is it that Gunns have over Tasmanian Pollies?

    They have served SLAPP suits on Tasmanians.
    They have offered to buy Pollies allegience Cheek.
    They have paid $50,000 to the Libs when Abetz was made Minister of Forests.
    They have nearly bankrupted their contractors.
    They cannot pay their debts.
    They are exempt legal challenge, Sec 11.
    They are virtually bankrupt.
    They have raped our landscapes.
    They are now the most hated company in Tasmania.
    They have been paid millions in taxpayers funds.
    They need more millions of Taxpayers money.

    They should be told Lara to pay their own bills, enough is enough,they are up the Tamar without a paddle, let the market dictate the fate of this the most toxic of all toxic companies.

  12. Russell

    August 3, 2011 at 10:03 pm

    Trading Halt.

    Gunns Ltd wrote a “Dear Kobe” to the ASX to stop their shares’ free-fall so that Gillard and Giddings can save them over the weekend.

    If the freeloading, bludging, welfare-dependant, loss-making, parasitic PRIVATE company known as Gunns gets a cent of our tax-payer dollars, I don’t think we should be paying another cent tax to the State or Federal Governments.

  13. Karl Stevens

    August 3, 2011 at 9:40 pm

    Tom 26. You changed the url. It should be this:
    http://www.themercury.com.au/article/2011/07/19/246581_tasmania-news.html

    This is what Booth said:Outspoken Greens MP Kim Booth said any payment to Gunns was not compensation, rather a buyback to secure Gunns’ share of the annual legislated 300,000 cubic metres of sawlogs quota it returned to the state and protected under the Statement of Principles.

    “It’s quite a reasonable proposition that any family sawmill, Gunns or any other person who has an allocation could have it retired and bought back by the Crown,” Mr Booth said.

  14. William Boeder

    August 3, 2011 at 8:57 pm

    With all this ratbaggery going on between Lara Giddings, Tas Incorporated and of course Gunns Ltd, I wonder if there is a precedent of a Private Listed Company, (one that is either insolvent or slowly slipping even deeper down the plughole,) whereby a demand has been made for compensation upon voluntary relinquishment by such an entity, (Gunns Ltd) of no longer sought products of Tasmania’s Crown Land Forests?

    As far as I am aware, no compensation is payable in respect of a termination of a lease or licence perhaps even an undertaking so related, however that is under the NSW Crown Lands Act 1989 section 109.

    My reading suggests that this matter of a contrived compensation package, lies specifically within the laws legislated as applicable in this State of Tasmania.

    In the past it was not unknown for our representative State government ministers to go against the will of the people, to quietly gaggle together and begin an immediate plot to introduce some jiggery-pokery cocked-up new legislation and then slamming it through in the wee small hours of the darkened night?

    My memory has it that just this sort of humbug ministerial action has been executed in the past by such doyens of probity as the former DPIPWE minister, (the name of David Llewellyn somehow springs into my mind unless it relates to some other peculiar matters unsavoury,) particularly when it was to do with giving advantage to the sly players in the Native Forest denuding industry?

    No doubt there are wiser minds than the one belongum this writer, it is hoped that they may add to this matter of sinister scarlet intrigue against the will of the people?

    William Boeder.

  15. Simon Warriner

    August 3, 2011 at 8:22 pm

    Len re 17, but the rules about continuous disclosure would require the market be kept informed, wouldn’t they?

    regarding the extortion charges, it beggars belief that our DPP has not had a serious conversation with the police chief about who gets arrested and when.

    I say let the idiot pay them, and see what happens.

  16. salamander

    August 3, 2011 at 7:30 pm

    “Premier Lara Giddings said yesterday that the matter of compensation for Gunns was complex and was still being considered.” I bet it is, with Lennon hanging over her shoulder telling her to write the cheque!

  17. Len Fulton

    August 3, 2011 at 7:14 pm

    Can anyone out there tell me what the following means?

    “Financial analyst Matthew Torenius says one possible cause of the lower share price could be Gunns reaching an agreement with a joint venture partner on its $2.3 billion pulp mill project.

    “There is a high likelihood that they would have to raise money in the market and that would be highly dilutionary for existing shareholders.”

  18. Tom

    August 3, 2011 at 6:31 pm

    And the Greens still wonder why so many do not care about what they continue to harp on about.
    This is the same Kim Booth two weeks ago.

    http://www.themercury.com.au/article/2011/07/19/246581_tasmania-news.html:

    Outspoken Greens MP Kim Booth said any payment to Gunns was not compensation, rather a buyback to secure Gunns’ share of the annual legislated 300,000 cubic metres of sawlogs quota it returned to the state and protected under the Statement of Principles.

    “It’s quite a reasonable proposition that any family sawmill, Gunns or any other person who has an allocation could have it retired and bought back by the Crown,” Mr Booth said.

  19. Just Me

    August 3, 2011 at 6:28 pm

    Gunns are now (2.30pm 4-8) at 20c.

    I remember reading on TT that there is a point at which the company is actually insolvent, ie time for the liquidators. I seem to remember that the writer had suggested 18c. Can that writer confirm this ? I cannot remember how this was calculated – I guess when the company debt is proportionally larger than the companies actual worth.

  20. PB

    August 3, 2011 at 6:15 pm

    The text and videos of the damning and shocking ABC Foreign Correspondent and 7.30 reports referred to in my previous post can be found here:

    http://www.abc.net.au/foreign/content/2011/s3283804.htm

    http://www.abc.net.au/7.30/content/2011/s3284832.htm

  21. PB

    August 3, 2011 at 6:13 pm

    Gunns is using the same brutal tactics as the mafia in its fraudulent attempt to extort “compensation” from the public for its own business decision to exit native forests.

    According to a recent report in the Mercury, Gunns owes FT over $25M for breach of its sawlog wood supply agreement and this debt should be called in before it is written off when/if Gunns becomes insolvent.

    http://www.themercury.com.au/article/2011/07/22/247401_tasmania-news.html

    Bob Gordon is also quoted in the article as saying that “About three months ago it [Gunns] wrote to FT giving notice of its intention to terminate its 917 [Long-Term Pulpwood Supply Agreement] and 918 [Sawlogs and Other Products Agreement”. However “It appears that Gunns has now realised that if it wants compensation, then it will need to have contracts to surrender and has now asked FT to negotiate replacement agreements.”

    These allegations are so serious that the entire matter should be subject to a formal police investigation.

    It should also be noted that Gunns cannot sell its wood supply quota to any other party but may assign its agreements (subject to FT’s consent) which means transferring the same terms and conditions to another party which is impossible to conceive.

    One of Gunns supposed potential joint venture partners for its stinking pulp mill, APRIL, has been exposed by the ABC for having illegally destroying native forest for timber and palm oil plantations in Malaysia putting the future of endangered species such as the orangutan at great risk. This has led to the company having its FSC certification revoked.

    Last night’s 7.30 also mentioned Alan Oxley, head of ITS Global. TT readers will no doubt recall that this company was responsible for the independent (sic) Review of the Social and Economic Benefits of the Gunns Limited Pulp Mill Project in June 2007.

    http://www.sourcewatch.org/index.php?title=ITS_Global

  22. Karl Stevens

    August 3, 2011 at 5:40 pm

    So Lara will give Greg a few more million of our money so he can repay Bob down at Forestry Tasmania. She knows FT will never put a cent back into consolidated revenue. Greg can also fund some more TV ads about what could happen on a bush block, and the rest of the state gets used to a hospital waiting list of half a century. Lara then tells the state Labor conference she can’t understand why her popularity is heading to 17%. Kim Booth threatens to bring down the government for the 19th time this year and Peter Gutwein moves a no confidence motion in the general theory of relativity. No wonder so many Tasmanians have become stand-up comedians and cartoonists.

  23. Bob McMahon

    August 3, 2011 at 5:32 pm

    Desperate times for Gunns, their political backers and creditors.

    As Gunns teeters on the edge of going into administration why is it that all financial analysts with the notable exception of Tom Ellison and John Lawrence, and all Chambers of Commerce and all politicians with a couple of exceptions only, have and continue to regard Gunns as a viable company and the Longreach pulp mill as imminent?

    I have not in my life experienced such a feverish mass delusion so out of touch with reality.

    My advice to Gunns’ creditors is to register your claims with a good corporate law firm (not in Tasmania) asap. I have been advised of a couple of firms in Sydney and am happy to supply details on request. Email me on bob@orielstudio.com.au

    In addition the well known firm of Slater and Gordon now have an office in Hobart.

    If Gunns owes you money get moving fast or you will likely miss out.

  24. tas echo

    August 3, 2011 at 4:22 pm

    Even if the money can be found how is it to be paid to Gunns?

    The Public Account Act 1986 does have a bit of a say in these matters.

    A separate Appropriation Bill will probably be needed if the money is to come out of the Consolidated Fund, given the size of the extortion demand.

    It’s so much easier if the payment is from the Australian Government.

    FT could borrow from Tascorp which wouldn’t require an Appropriation Bill. But then it’s insolvent so that causes another slight problem.

    Complex indeed.

  25. john hayward

    August 3, 2011 at 4:05 pm

    In an enlightened democracy you would expect a prospective logger to pay for losses regarding:

    1. Diminution and degradation of water catchment.

    2. Damage to tourism and its opportunities.

    3. Value of the far greater carbon storage in mature native forests.

    4. Depreciation of land values through damage to natural amenity.

    In Tasmania, the victims pick up the bill.

    John Hayward

  26. john hayward

    August 3, 2011 at 3:31 pm

    If Lara’s government cannot clearly articulate their binding legal obligation to compensate Gunns for their unforced surrender of their wood supply entitlement, it seems reasonable to conclude that it has the nature of hush money.

    John Hayward

  27. mike seabrook

    August 3, 2011 at 3:21 pm

    at the labor conference

    it would not be wise for anyone to turn up in costume as the tasmanian fox.

    tas times has a reward out on the capture- i presume it is dead or alive.

  28. mike seabrook

    August 3, 2011 at 1:44 pm

    feds won’t pay up

    did mr wilkie the fearless denison rep draw another line in the sand.

    bet that it was not bob brown & christine milne

  29. Just Me

    August 3, 2011 at 1:41 pm

    The Federal govt must have known that it was inevitable that the compensation money intended for ripped off contractors would actually be redirected straight to Gunns. We all knew it. Is Julia naive or or just trying to distance herself from the usual goings on in far flung Tassie ? Either way, I hope Gunns choke on my hard earned tax dollars.

  30. pat synge

    August 3, 2011 at 1:28 pm

    I thought Gunns had signed a 20 year contract to buy native forest timber from FT and then decided that the only way they could hope to raise finance for their proposed mill was to get out of native forest logging and and so reneged on their contract.

    So why would we owe them money?
    Shouldn’t it be the other way round?

    I must have missed something along the way
    Please explain?

  31. Christopher Purcell

    August 3, 2011 at 1:18 pm

    “It is understood that the original Gunns demand was for $250 million but that has since dropped to $106 million.” If this is not extortion, than what is it? Can anyone explain how this company can DEMAND taxpayer money? Has this DEMAND for money been reported to Tasmanian Police for them to investigate, because I think it should.

    If ANY taxpayers’ money goes to Gunns under ANY guise, while ESSENTIAL government SERVICES are being closed or cut-back & staff sacked, then there will be riots!

  32. Lea

    August 3, 2011 at 12:54 pm

    Still smells like extortion to me.

  33. Russell

    August 3, 2011 at 12:04 pm

    WHAT!!!???

    There will be a revolt if the failed private company Gunns gets the tax-payer money which has been ripped out of the Tasmanian Public Health system.

    I repeat, Gunns reneged on its wood supply contracts, we owe them NOTHING.

    If anything the Tasmanian Government (and FT and other suppliers and contractors) should be pursuing Gunns for compensation for this breach of contract.

    Gunns Ltd is nothing but a freeloading, bludging, welfare-addicted parasite.

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