Compo decision within days

Blair Richards
The Mercury, 11 September 2011

GUNNS Limited is expected to decide within days if it will accept a second and potentially much larger offer from the State Government to exit native forests.

Late last week the company rejected an initial offer of a maximum of $23 million.

A Gunns spokesman yesterday said the company would respond to the latest offer this week.

The Government has said the new offer would remain confidential until it got a response from Gunns.

The Federal Government has provided funding for a deal under the $276 million Intergovernmental Agreement.

On Friday, Premier Lara Giddings said the new offer included a proposed resolution of disputed debts of up to $25 million between Forestry Tasmania and Gunns.

Ms Giddings has confirmed there is now $43 million available if necessary to pay Gunns in return for the company giving up its native-forest contracts.

Ms Giddings said the Government would provide details on both the original and follow up offers made to Gunns, once the company agreed to a deal.

Yesterday the State Opposition seized on comments by former state Labor minister Julian Amos that the State Government should walk away from the Intergovernmental Agreement.

In a column published in yesterday's Mercury, Dr Amos said Gunns had made the decision to exit native forest logging long before any Government compensation was put on the table.

Yet the company had put its hand out for money and, rejecting an initial offer, had asked for more in what he described "an extraordinary exhibition of arrogance".

"To destroy an entire industry, to ruin the livelihoods of so many people, to place so many rural communities in jeopardy and then seek compensation for doing so, quite takes my breath away," Dr Amos wrote.

Opposition forestry spokesman Peter Gutwein said he agreed with Dr Amos' suggestion that the State Government drop the Intergovernmental Agreement and revert to the Regional Forests Agreement.

"Given Gunns voluntarily gave up its native forest contracts, compensation should not be paid to them at all -- end of story," he said.