Companies

Mar 5, 2013

How your taxes bailed out insolvent timber giant Gunns

Gunns might have been trading insolvent when it took $23 million from the federal government for its non-existent pulp mill, writes Tasmanian economist and analyst John Lawrence at Tasmanian Times.

The federal election scheduled for September means it’s a double header over the next 12 months for Tasmanian voters, with a state election due in March 2014. That means lots of Canberra visitors, lots of promises and at least a few presents, and this might be one: according to The Weekend Australian, Julia Gillard is yet to rule out assistance to get the Tamar Valley pulp mill off the ground.

Coincidentally, Gunns’ voluntary administrator also recently circulated his detailed report to creditors (Gunns planned to build the original pulp mill).

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7 comments

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7 thoughts on “How your taxes bailed out insolvent timber giant Gunns

  1. Bo Gainsbourg

    Here’s a radical idea…why doesn’t the tassie government just privatise Gunns and the timber industry? Problem solved. No more public money gravy for them.

  2. Gavin Moodie

    The Howard Government lost a lot of credibility by making irresponsible promises in its last year. I hope the Gillard Government doesn’t sully its record by following Howard’s example.

  3. Tom Baxter

    Indeed Gavin Moodie. It is well to remember that Gunns was been backed to the hilt by successive Federal and State Governments, including with millions in taxpayers’ funds. Those who authorised those payments should now account for them. And of course, Gunns’ liquidation also demands tough questions of those who oversaw its fall from power (sadly a case study in corporate governance failure). Particularly given the legal concerns raised by the administrator, now liquidator (eg possible insolvent trading), tbc…. tombaxter.org

  4. Smithee

    Cronyism and institutionalised corruption is so entrenched in Tasmania that some of the paricpants don’t even realise they’re part of the stench. There is not a single politician or top public service figure that I trust to either tell the truth or not be so leaned upon that they are scared to tell the truth. The pond down here is too small.

    Change must come from without.

  5. Stephen

    Nothing will ever pay back the sheer industrial destruction of the landscape for near-worthless euk plantations.

  6. MJPC

    Stephen, as with so many corporate failures the losses are only counted in the dollars lost, not the environmental degradation that goes hand in hand with poor management decisions.
    The only think to be thankful in this whole debacle was no pulp mill was created to destroy the environment its operations would have seen. Of course if the LNP get in who knows what examples of environmental bastardry will entail.
    Do we ever learn though…the CSG wells are the future pulp mills and who is counting the future costs of destruction of groundwater?

  7. Edward James

    Gunns might have been trading insolvent when it took $23 million from the federal government for its non-existent pulp mill, Are you serious Mr John Lawrence ? Why is it this has not blown up in our Federal Parliament? Are our elected representatives so tiny minded issues like this make no never mind to them? Edward James

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