Image for Abbott:  ’ ... make it happen’. Schaap: Go ahead, Gunns. JP Morgan: Risk too far

TRANSCRIPT OF THE HON. TONY ABBOTT MHR
JOINT DOORSTOP INTERVIEW WITH SENATOR RICHARD COLBECK, SHADOW PARLIAMENTARY SECRETARY FOR FISHERIES & FORESTRY, AND SENATOR DAVID BUSHBY, SENATOR FOR TASMANIA,
HOBART

Subjects: Julia Gillard’s carbon tax; Craig Thomson; forestry.

TONY ABBOTT:

It’s good to be here at Anchor Wetsuits. I want to thank Rudi and Kim Van Dort and the other members of the Van Dort family for making me and my colleagues so welcome. It’s good to be with Richard Colbeck, the Shadow Parliamentary Secretary, and David Bushby, one of our whips in the Senate, both senators for Tasmania.

This business is one of the last if not the last remaining Australian wetsuit manufacturers. It’s important that we continue to make things in this country and we are only going to make things in this country if we are competitive and the last thing manufacturing needs is additional cost burdens. Now, the carbon tax will impact on this business, it won’t impact especially heavily on this business but it will impact because every business uses power, every business needs transport and power and transport will be the two things most affected by the Government’s carbon tax. So I say to the Prime Minister: if you are fair dinkum about preserving a manufacturing industry in this country dump the toxic tax. It’s bad for jobs, it’s bad for manufacturing and it’s bad for every Australian’s cost of living.

The other point I want to make is about matters which have been in discussion in the parliament over the last fortnight. The Prime Minister says she’s very concerned about George Brandis, well she ought to be even more concerned about her own position. George Brandis has no authority whatsoever over the New South Wales police, but as Minister for Workplace Relations she had full ministerial authority over Fair Work Australia. Her chief of staff called the Registrar of Fair Work Australia to inquire about an investigation that was going on into one of her members of parliament. Now, this is in the words of the Leader of the Government in the Senate this week “quite improper”. Senator Evans was asked about what involvement he might have had with a Fair Work Australia investigation and he said very vitriolically in the Senate that it would be “quite improper” for any minister to make any inquiries about Fair Work Australia investigations and yet the Prime Minister has done precisely that.

So the Prime Minister is guilty of contravening the standards that were set by her own leader in the Senate. The Prime Minister is guilty of doing something that she herself condemned in the case of Senator Brandis, but Senator Brandis I point out has no responsibility, no authority whatsoever over the New South Wales police but the Prime Minister had full ministerial responsibility for Fair Work Australia. So this is yet another sign of the Government’s desperation and the Prime Minister’s shrillness in the parliament yesterday is a sign that she knew that this was coming up and she decided that offence was the best form of defence. But let the Australian public be under no illusions just how desperate this Government is.

QUESTION:

So given these new revelations what needs to happen?

TONY ABBOTT:

Well, the Prime Minister needs to come clean. I note that the Prime Minister had no trouble remembering the date of the phone call from her chief of staff to the Registrar. If she can remember the date she can remember the detail and she should tell us exactly what transpired.

QUESTION:

The Prime Minister’s repeatedly said that there’s an investigation going on and nothing more should be said until that happens. Is it time to drop this issue?

TONY ABBOTT:

There is an investigation going on into the misuse of the credit card, into what appears to be flagrant misuse of union members’ money. But there is no investigation going on into what the Prime Minister knew and what steps the Prime Minister might have taken to inquire into this investigation, what steps the Prime Minister might have taken to procure financial support from the New South Wales Labor Party for her embattled member of parliament. Now, these matters aren’t being investigated. It’s perfectly right that the Opposition should ask questions and frankly if this Prime Minister has any shred of integrity she should not stonewall she should answer them. Every previous prime minister would have faced up to this in the parliament. No previous prime minister would have stonewalled and obstructed in the parliament the way this Prime Minister did. Frankly what this Prime Minister did in the parliament this week was trashing the parliament in the name of political self-preservation.

QUESTION:

Mr Abbott, the Prime Minister is signing a memorandum of understanding for $120 million as part of the forestry agreement. What are your thoughts on that money?

TONY ABBOTT:

I want to see forestry workers’ jobs protected and preserved. I don’t want to see the federal Government paying money to get people out of work, I want to see the federal Government trying to keep people in work and the problem with all this money is that it’s basically about closing down the forest industry, it’s basically about getting people out of forestry work. Well, I think forestry is an important industry, very important for Tasmania. I want to see it continue.

QUESTION:

Given that, I guess it means selling out Tasmania’s native forest industry, do you think it is worth accepting this $120 million given the industry that it is going to shut down?

TONY ABBOTT:

Well, this is a federal Government which is living on borrowed money and I don’t think we should be spending borrowed money to close down a productive industry. I just think that it is crazy at a time like this to be closing down the productive industries that we’ve got. Now, this Government I’m afraid has form. They’ve effectively closed down the live cattle industry of northern Australia, they have seriously damaged the steel industry, now it seems they are looking to close down the forestry industry in Tasmania. Are there any productive industries that are safe from this Government?

QUESTION:

The pulp mill is one of the biggest manufacturing developments on the horizon in Australia. Do you think the Government is doing enough to support that?

TONY ABBOTT:

The pulp mill is one of the only big manufacturing projects currently in contemplation here in Australia. I want to see Australia continue to be a manufacturing nation. I think we can’t call ourselves a first world economy if we don’t manufacture in this country, so, yes, I want the mill to go ahead. Now, I want the mill to go ahead because it’s a commercial venture which is meeting high environmental standards, but I do want it to go ahead and I think everyone who has the best interests of Tasmania at heart should be supporting this pulp mill.

QUESTION:

Gunns yesterday told the stock exchange that it’s hoping to receive a settlement offer from the state government on compensation for its native timber contracts yesterday and it hoped to update the stock exchange today. The Prime Minister has not wanted to weigh into this issue at all. But do you think taxpayer funds should really be going to a company that some financial analysts are predicting is ripe for a takeover?

TONY ABBOTT:

Look, if government is taking away people’s rights, commercial rights, property rights, I think government is obliged to offer appropriate compensation. The point I make is that I want companies to flourish, I want jobs to flourish, I want industries to flourish and this is a Government which seems more interested in paying taxpayers’ money to shut industries down than to keep them going.

QUESTION:

You said that everyone should support the pulp mill but how should that support be manifested?

TONY ABBOTT:

Well, by not putting unreasonable obstacles in its path. As I said a moment ago, this is one of the very few significant manufacturing projects currently on the cards for this country and I think we should be doing our best to make it happen rather than finding excuses to stop it. Now, because Richard as the Shadow Parliamentary Secretary has a lot of interest in this I might ask Richard just to add to my comments.

RICHARD COLBECK:

In respect to the mill itself, there are some significant issues here in Tasmania, obviously the uncertainty around the start date and the contracts. I think that that issue should be removed as an obstacle to the mill and I’m looking forward to having some conversations with the state Liberals about that process, but Premier Giddings should have the courage to make some strong decisions in relation to removing what is an obstacle to the mill that has all the approvals, it should be free to go ahead and the Tasmanian government should be doing everything to take those concerns off the table.

QUESTION:

Are you worried though about Gunns’ financial position?

RICHARD COLBECK:

Well, look that’s a market situation and the markets will deal with that as an issue. I am aware that Gunns are in negotiations with partners for the project. I’d encourage that process to continue and, as Tony said, this is one of the only major new manufacturing projects in the country and we want to see it go ahead.

QUESTION:

Do you think this issue is likely to dominate debate at the state Liberal conference this weekend?

RICHARD COLBECK:

Well, forestry is certainly a major concern and issue in the local community at the moment. You’ve seen 2,000 people on the lawns of Parliament House last Saturday, another 1,000 turned up at Smithton last Sunday so it’s a major issue in the community and I’m sure that our membership will be interested in discussing it.

TONY ABBOTT:

Thanks so much. Any other issues?

QUESTION:

Just relating to what you were saying earlier about being worried that a carbon tax would potentially help shut down the manufacturing industry. But you also said that you didn’t think this business would necessarily be, this specific business, would necessarily be that affected. So, what brings you specifically to Anchor Wetsuits to get this message across?

TONY ABBOTT:

Because this is the last or one of the last surviving wetsuit manufacturers in this country. We once had a flourishing wetsuit manufacturing sector just as we still have a surfboard manufacturing sector. That’s under enormous pressure from cheap imports from China and Thailand. The wetsuit industry has effectively succumbed to cheap imports from Thailand and China. This is the last or one of the last domestic wetsuit manufacturers. We’ve got to keep them going and the best way to keep them going is to not hit them with additional burdens. Now, the power bill here is about $500 a month. That’s going to increase by at least $100 a month under the carbon tax. The transport bill here is a few thousand dollars a year. That’s going to go up from 2014. These are all additional costs which struggling Australian business can ill afford.  So I say to the Prime Minister if she wants to keep a manufacturing industry in Australia don’t make a difficult situation worse with unnecessary new taxes. We all know it’s often hard for manufacturing in this country. The dollar is high, the market is up, thank God Australian wages are high – and we don’t want Australian wages to be other than high. One of the few advantages we’ve got in manufacturing is affordable power. That’s one of the very few comparative advantages Australian manufacturing has, affordable power and affordable power is going to be a thing of the past under the carbon tax.

QUESTION:

If they are not affected too much then in this particular business, or if you don’t think they will be, then is there are real worry that it would get shut down?

TONY ABBOTT:

Well, I’m not going to [inaudible] any business. I’m here to be helpful to this business, I’m not here to be difficult for any business and why I say no to a carbon tax is because I say yes to manufacturing Australia, I say yes to affordable power in Australia. I say yes to Australians having a reasonable cost of living, not the kind of increases that we’ve seen over the last few years. Now, compared to a steel plant or a cement plant or an aluminium plant the situation of this particular business is not going to be as drastically affected by the carbon tax, but it is still an additional impost which it doesn’t need.

QUESTION:

Just in terms of manufacturing jobs, Gunns pulp mill, it could be one of the most significant investments in the nation. Do you think this will go ahead? Are you hopeful still?

TONY ABBOTT:

I want it to happen. I say yes to manufacturing. I have a preference for these things going ahead. I want to make it easier for these developments to go ahead because these developments mean more jobs, they mean higher wages, they mean a better standard of living for Australia. So if it’s commercially viable, if it can maintain the best international environmental standards, it should go ahead. It really should go ahead and no responsible government should put addition obstacles in its way. My fear is that with Labor-Green governments both in Hobart and in Canberra they are going to find all sorts of unnecessary obstacles and make it very difficult indeed.

Thank you.

• Nick Clark, Mercury:

ENVIRONMENT Protection Authority director Alex Schaap will allow Gunns Limited to do work at the pulp mill site until it is decided what constitutes substantial commencement.

Mr Schaap’s ruling came as Gunns announced yesterday it had let tenders for earthworks at the Bell Bay site near Launceston worth about $20 million.

The company said work would begin this month.

“I do not believe that the permit could be considered as lapsed until a determination is made regarding substantial commencement,” Mr Schaap said.

He said it may be a matter for a court to determine.

The Pulp Mill Assessment Act 2007 says: “The pulp mill permit lapses if the project is not substantially commenced before the end of the period of four years commencing on the date on which the pulp mill permit comes into force (August 30 2007).” Mr Schaap said he had not yet had cause to take advice regarding the question of substantial commencement.

“But that may occur if I am required to approve any plan or action under the permit after August 30,” he said.

Gunns awarded the earthworks contract to a Tasmanian joint-venture between John Holland and Hazell Bros.

Gunns managing director, Greg L’Estrange, said the works were expected to take seven months to complete.

“The bulk earthworks are clearly substantial progress towards bringing the mill to reality,” he said.

Gunns has spent more than $200 million on the mill.

Gunns announced the tenders despite applying pressure to get a “settlement proposal” from the State Government. A spokesman for Premier Lara Giddings said no settlement would be offered yesterday.

Prime Minister Julia Gillard said the future of the mill was now squarely in the hands of Gunns.

“This went through the proper process with the relevant minister ... so there are stringent environmental conditions in place,” she said in Hobart yesterday.

“So now this is a commercial question for Gunns.”

Mercury HERE

• Nick Clark, Mercury:

GUNNS’ move to let a $20 million contract for earthworks before Bell Bay pulp mill project finance had been achieved was a “risk too far”, a leading analyst said yesterday.

JP Morgan issued a damning analysis in the wake of Gunns’ $355 million annual loss announced on Thursday.

The report is certain to put more pressure on Gunns’ share price, which remains suspended at an all-time low of 20.5 cents.

“We cannot recommend investors hold a position in Gunns,” the report said.

The analyst had concerns about the sustainability of the business.

“We consider the risks around repayment of bank debt, the future demand for its exports, the execution of the pulp mill project and the uncertainties around the Intergovernmental Agreement on the Tasmanian forestry industry to be too much to justify a play on the company’s asset backing,” J P Morgan said.

Gunns has $628 million of debt, of which $593 million is classified as current payable in the next 12 months.

JP Morgan said Gunns had moved to start bulk earthworks to beat the deadline on permits at the end of August.

“As a result Gunns has announced it will start bulk earthworks and has let a contract accordingly,” it said. “Without securing project finance we believe this is a risk too far.”