An end to Gunns' pulp mill good for Tasmanian economy

The Wilderness Society (Tasmania) Inc
Media Release
19 November 2008

As Gunns’ share price plummets below $1, The Wilderness Society is calling on decision-makers to remember that independent research has shown Gunns’ pulp mill would be bad for the Tasmanian economy. The share-price plummet came after major pulp-mill proponent Paul Lennon declared the pulp mill dead, after earlier declaring it was on the wrong site.

“While Paul Lennon and Gunns claim that the pulp mill would be good for the Tasmanian economy, other analysis shows it will cause an overall cost to Tasmania,” said Mr Oosting, pulp mill campaigner with The Wilderness Society.

“Now that former Premier Paul Lennon has said the project is dead, it’s time new Premier David Bartlett took on the responsibility of putting an end to the project once and for all. With the threat of the pulp mill still looming, many businesses in Tasmania don’t have the confidence to invest in their expansions.

The state government never carried out a full cost/benefit economic assessment of the pulp mill, however independent economists have shown that the pulp mill would be bad for jobs and bad for Tasmania’s economy.

“Paul Lennon was the major driver of the fast-track assessment of the pulp mill and forcing the approval through parliament, but now he admits it is situated in the wrong location and is unlikely to go ahead,” said Mr Oosting. 

Independent economic research on the impact on Gunns’ pulp mill has included:

• Tasmanian Roundtable for Sustainable Industries (TRSI) found the pulp mill will cost some 1,220 jobs in tourism and the fishing industry while Gunns have indicated the pulp mill will only create 280 jobs.
• Dr Peter Brain from the National Institute of Economic and Industry Research (NIEIR) found the most likely impact of the mill on the Tasmanian economy over 20 years would be negative $0.3 billion, not the positive $3 billion claimed by Gunns. NIEIR also found ‘that if anything goes wrong with the mill the maximum cumulative Tasmanian consumption loss is estimated at -$3 billion.’
• Naomi Edwards (retired actuary and former partner with Deloitte Touche Tohmatsu) found that Gunns consultants Allens only addressed potential economic benefits but did not address potential economic costs; did not consider the broader economic implications of the pulp mill; and did not consider the opportunity cost implications of the pulp mill.
• The Federal Government Environmental Economics Unit found that “Gunns do not measure nor take account of such impacts that can not be immediately identified as potentially impacting on the total effect of the investment”.