http://www.themercury.com.au/article/2011/07/19/246581_tasmania-n...

http://www.themercury.com.au/article/2011/07/19/246581_tasmania-news.html

Payout branded 'cash grab'
DANIELLE McKAY
July 19, 2011 12.01am

GUNNS Ltd's demand for a government payout for its voluntary exit from native forest contracts has been labelled an opportunistic cash grab.

Pulp and paper industry analyst Robert Eastment said Gunns had seized on the opportunity for compensation in exchange for its support of the long-awaited Statement of Principles process.

"If the Statement of Principles was not under negotiation then the terms of any compensation being sought by Gunns would have much less grounding," Mr Eastment said.

But, with its mounting debt and a determination to build its $2.3 billion Tamar Valley pulp mill, he understood why Gunns was focused on gaining a payout.

"From the perspective of the business world Gunns has the right to seek every avenue to receive compensation, and therefore its actions cannot be condemned," he said.

Mr Eastment's comments followed a war of words yesterday as the State Opposition accused the Greens of backflipping on their position against a state-funded compensation package for Gunns.

Outspoken Greens MP Kim Booth said any payment to Gunns was not compensation, rather a buyback to secure Gunns' share of the annual legislated 300,000 cubic metres of sawlogs quota it returned to the state and protected under the Statement of Principles.

"It's quite a reasonable proposition that any family sawmill, Gunns or any other person who has an allocation could have it retired and bought back by the Crown," Mr Booth said.

He said any buyback should be overseen by an independent probity auditor to ensure that the purchase of an asset was done at an established commercial market price, "which does not equate to compensation".

Liberal leader Will Hodgman said the Greens' position was a reflection of "how warped things have become in Tasmania under the Labor-Green Government".

Mr Hodgman said there was no reason to offer compensation to Gunns as its exit from native forest logging contracts was a voluntary commercial decision.

He said Premier Lara Giddings should explain the reason behind any payment, how much was payable and how the Government could afford to pay it.

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