Here is an attempt to put a few figures to the cost to taxpayers of building the pulp mill. This does not include the fact that Gunns will have to service this new loan and profits head offshore to shareholders. Nor does it take into account that there will be a 15% oversupply of pulp coming on line from 47 new mills worldwide, and Gunns may have to go back to the various governments for further direct subsidies to keep afloat. The individual figures are all open to tweaking, but it does illustrate the size of the problem that we are (not) being asked to fund.
THE FUTURE
Water at $24 per megalitre while residents pay $640. A discount of $616 per megalitre with a requirement for 26 gigalitres. Valued at an annual fee of $616,000,000. Over the 20 year period of the licence $12,320,000,000
Supply of timber at below cost. Forestry have made a zero return to the public purse in three out of the last five years, despite also getting $17 million from their tourism operations. The pulp mill will require an extra 4 million tonnes of OLD GROWTH. Add to this the 1.7 million tonnes of OG they also export as woodchips, and currently taking a guesstimate of underpaying by at least $12 per tonne below market or carbon price, then: $12 x 5.7 million tonnes per year = $68,400,000 annually. Over the 20 year contract period $1,368,000,000
Cost of living rise/currency devaluation, etc = 3.5% / annum. Over the 20 year life span of the contract, at compound interest this amounts to a further subsidy of $1,522,018,700
Note: these figures may be understated if a.) the price charged to Gunns by forestry falls, or is fixed to world pulp prices, or b.) the indexes rise above 3.5%, or c.) the value of timber as an offset to carbon rises over the coming years.
Water pipeline from Lake Trevallyn to Bell Bay. Public statement and preliminary estimateŠ $50,000,000 Actuality more in the region of $100,000,000
Effluent Pipeline $37,000,000
Transferring Launceston sewage to Bell Bay $100,000,000
THE PAST
Subsidies to MIS companies, zero rated for tax purposes, (and Gunns is also an MIS company) which allows huge land-grabs inside Tasmania for the purpose of growing plantations for the sole purpose of supplying the future needs of Gunns, and facilitating the permanent conversion of native forest and agricultural land to plantation. Value to Gunns of subsidised woodchips. $XXX Billions
Value of land acquired under this scheme $XXXBillions
Profits from the administration of MIS schemes. $XXX Millions
The building of specific infrastructure for Gunns, including road and rail upgrades and other grants, estimated over the last 7 years to be worth. $1,000,000,000 (Source, Richard Flanagan and others.)
The RPDC fiasco. Cheap at. $20,000,000 ?
Government funded publicity, including a touring bus, etc $5,000,000 ?
Trips abroad for all and sundry to examine dissimilar millsŠ $1,500,000 ?
Meander Dam. Primary purpose to irrigate Gunns crops and supply water for the mill $137,000,000 ?
Grant to prepare Gunns IIS $5,000,000 ?
Forming of the Pulp Mill Task Force $6,000,000
SWECO Pic fast-track Assessment $500,000
70 man Government Media unit. (Spin doctors.) per annum $3,500,000 ??
Sundry dinners, lunches, telephone calls, foreign trips and repairs to houses $??
UNKNOWN COSTS
Loss of the fishing industry in the Bass Strait and the knock-on effect for the entire fishing industry of Tasmania. $1.7 Billion minimum.
Devaluation of property in the Tamar Valley. Couple of billion??
Compulsory purchase of farmland etc, to facilitate the pipeline $??
Loss of Agricultural land to plantation. Few billion there ??
Reduced water supply due to increased demand from plantations. At about $640 a megalitre -- 50 gigalitres annually? $800,800,000. Over 20 years of mill life $16,016,000,000
Road deaths due to extra traffic. 4 persons according to independent sources, half a person according to Gunns. No price given for human life ??
Public health costs due to increased toxic spraying. Unknown ??
Death rate increase due to air pollution and toxicity of water supplies. 20 people according to AMA. Higher if you take the difference in health rates in Tasmania compared with the other states and the rest of the world.
Loss of basis for carbon trading. $30 per tonne x 5.5 million tonnes annually??
Cost of additional silting up of the Tamar River basin. $100 million??
Loss of tourism, vineyard sales, clean green image etc. In excess of $200 million annually??
Possible construction of a 'critical infrastructure' power station to create 10.1 million tonnes annually of 'green' carbon dioxide from wood waste? $90 - $120 million ??
Failure to ratify anything resembling Kyoto and failure to meet any carbon emission reduction program and hence, increased global warming. Cost??
Possibly life, as we know it??
Offset against this can be all the money paid by Gunns into Party coffers and 282 jobs (mostly foreign). There is always a danger that someone, somewhere, may pull the plug and actually ask Gunns to finance this lot themselves, instead of extracting it from the public purse. Could do wonders for their share price!
Barnaby Drake
