ANZ dumps mill, Lennon quits

May 31, 2008

Tasmanian Labor Premier Paul Lennon resigned suddenly on May 26, after an opinion poll revealed his popularity had dived to just 17%, and 39% of voters would have preferred Liberal leader Will Hodgman as premier.

The Lennon government has been losing support for a long time as a result of a series of corruption scandals that caused the resignation of two deputy premiers, as well as its entrenched support for the unpopular Gunns' pulp mill in the Tamar Valley.

The relationship between the state government and woodchipping company Gunns Ltd was widely seen as being too close, with Gunns accused of having an unacceptable amount of influence over the government.

This was typified in a deal made public three weeks ago that guarantees Gunns $15 million of taxpayer-funded compensation if the supply of wood to their pulp mill is restricted as a result of further forest protection by any future government.

The new premier, David Bartlett, is relatively new to politics, having only been in parliament for four years, and in the role of deputy premier for six weeks. He voted in favour of the pulp mill when approval for it came before parliament last year, but he is not as enthusiastic about the mill as Lennon was.

In an interview on ABC's Lateline, on May 26 — the same day he was sworn in as premier, Bartlett said about the mill, "Some would say we've done more than enough as a government. I believe it's now firmly up to the company and their financiers to see whether this project goes ahead." He has ruled out spending $65 million of public money on a pipeline for the mill, which the former premier was considering.

Gunns could find it difficult to build this pipeline on the private land of residents in the Tamar Valley, who are bitterly opposed to the mill, without government powers to compulsorily acquire the land. Bartlett also told Lateline that his government might re-examine its position on old-growth logging in Tasmania.

Bob McMahon, spokesperson for Tasmanians Against the Pulp mill, told Green Left Weekly: "Lennon's government was like the Titanic that hit the iceberg known as the pulp mill. Lennon went down with his ship and it would be very foolish for Bartlett to launch the Titanic 2. Unless Bartlett does a U-turn, and completely redirects Tasmania's economy away from its reliance on the logging industry then he will follow Lennon."

In the week leading up to Lennon's resignation, it was reported that the ANZ Bank had decided not to fund the project. A significant campaign has been waged against ANZ over the past year to pressure them not to fund the pulp mill. They have been Gunns' chief financial backers for the past 15 years.

On May 29, ANZ released a statement confirming that funding for the mill will not go ahead but the bank will continue to fund Gunns' other projects.

This is a significant setback for the mill, and it now looks unlikely that construction will begin in July as planned. Gunns is currently seeking funding from international banks but the Wilderness Society, in a May 29 statement warned, "Any bank that steps in to finance the proposed paper mill would risk major negative publicity and becoming the target of concerted civil society organisations' campaigns".

McMahon told GLW, "The pulp mill is as good as gone but the battle isn't over. The pulp mill is just a symptom of a larger problem that needs to be rooted out. That problem is the public subsidies for the logging industry and the sinister way the logging industry controls this state."

Federal environment minister Peter Garrett has approved another stage of the mill, allowing construction to begin on workers' accommodation on the outskirts of George Town. The facility is expected to house up to 800 workers for two years.

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