Crikey

The delicate political game Malcolm Turnbull has been forced to play with the Tamar Valley pulp mill reached a rhetorical peak yesterday when the environment minister announced his new guidelines on effluent release were the “toughest in the world”.

The phrase was the verbal equivalent of a tightrope walker’s pole, balancing the concerns of the mill’s supporters and opponents and, hopefully, protecting the minister from plunging to his political death.

It was also supposed to signal that Gunns wasn’t getting its own way. But on receiving the news, the company didn’t even break stride, blithely correcting an ABC reporter who asked if it would be months before construction began. “No, weeks,” Gunns Chief Executive John Gay replied.

Weeks? Gay has repeatedly told politicians and the public that the project was unviable should any further restrictions be put on its operation. After getting his way, John Gay should at least have done the right thing by Turnbull and stayed in character as the put-upon businessman. Here’s a quick recap of Gay’s announcements this year:

10 January, The Mercury: “Someone’s got to make a decision here; if it goes on for any longer than six months the whole thing is in jeopardy.”

16 March, Stateline: John Gay on withdrawing from the independent RPDC assessment process: “The project that we started some two and a half/three years ago has now got to the stage where we cannot continually run a process that hasn’t got any time lines. The costs - we’re so far in to the project and ordering equipment and ordering our money and the time lines just didn’t suit us financially …

27 August, The Mercury: “I think (Mr) Turnbull is meeting his timelines; he might be a few days out (but) we definitely need to start (construction of the pulp mill) in the first week of September … If the state or the federal government is not finished their processes by then, it does give us a lot of concerns.”

2 October, The Mercury: “If we can’t meet the conditions he wants, or he wants changes, it means Turnbull doesn’t want the mill … I can’t work with any tougher permits. This mill, as it is, meets the science. I can guarantee that.”

Gay’s grinning acceptance of the new conditions yesterday only highlighted the hollowness of the minister’s words. There’s thanks for you. It’s an issue Crikey commented on yesterday and ABC Melbourne’s Jon Faine raised directly with Gay this morning:

Faine: You must have some idea [of the extra costs imposed by the new conditions] because you immediately said you’d accept the conditions. If they were making it non-viable, then you would have told us straight away, wouldn’t you?
Gay: Oh ok. Let me tell you that I have not got a real number on the extra amount but estimate it up to about $10 million.
Faine: Only?
Gay: Yes.
Faine: This is a project that was originally costed at a billion and is already costing $2 billion. Is it still economically viable?
Gay: Yes, most certainly. It is economically viable.
Faine: When the cost is nearly doubled, there’s an additional at least $10 million in costs and compliance. At what point is it not viable?
Gay: This mill is now pushing to be on its limits. At this stage it is still viable and it will get built.

But this is only one of the financial battles Gunns had to win to make the mill viable. Agreements still need to be struck with the Tasmanian government on the price of timber, water and electricity, and that has international implications. Australia is a signatory to the WTO. If Tasmanian Premier Paul Lennon is too generous, he won’t be answering to a compromised federal environment minister —  Gunns’ South American and Russian competitors may start making some unpleasant noises.