A little wind-powered, solar-heated, greenhouse-neutral recyclable light switched on in my head while reading Thomas Hunter’s pulp mill piece yesterday. Suddenly I understood why we have a totally inconsistent and very dodgy federal policy to allow odious tax-driven marketing of lousy plantation timber investment schemes to continue.
While scrapping the up-front tax rort for non-timber rural managed investment schemes, the government has tried to justify continuing the ruse for timber plantations with some garbled mutterings about greenhouse policy, import replacements and patient capital. It of course made and makes no sense.
But yesterday, it clicked. It looks like Gunns’ pulp mill will only be viable if it plants vast new timber plantations. The timber plantations will only happen if they can be marketed to mug investors under the guise of a tax break.
The federal forestry minister is Senator Eric Abetz. Senator Abetz worked harder than anyone to keep the tax lurk. Senator Abetz is from Tasmania. What’s the most powerful corporation in Tasmania? Oh, you already know that one.
Silly me – at the time, I thought it rather odd that Gunns donated $62,500 to the Liberal Party but only $2,980 to Labor last year, but I guess the plantation kings always knew which policy really mattered most to them.
Personally, I have no problem with a pulp mill or continuing to harvest previously-harvested native forests or planting timber plantations. What’s annoying is that, as a taxpayer, I’m subsidising questionable marketing campaigns for lousy or not-very-good investment products.
The timber plantation schemes, even with the 100 per cent up-front tax deductions, haven’t and don’t really stack up as good investments. Many of them are positively woeful.
Without the tax enticement, they would be fully exposed as duds, but there are plenty of mugs out there happy to burn a dollar to avoid paying 50 cents tax.
And the rest of us are subsidising their illusion.
Nice work, Eric. I’m just glad I finally understand why it happened.