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Minister discusses Federal Government's $40 million paper mill project for Tumut.

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PETER CAVE: The days of the Federal Government pulling out of the market of refusing to pick winners are over.  The Howard Government is proudly pointing to its $40 million contribution to the establishment of a new paper pulp mill in New South Wales. According to Forestry Minister, Wilson Tuckey, there wouldn't have been a paper mill in the Snowy Mountains town of Tumut without government help.  And as he told Stephen McDonell, it won't be the last of his government's strategic investment projects.


STEPHEN MCDONELL: Wilson Tuckey, is it certain that this pulp mill will now go ahead?


WILSON TUCKEY:  Yes, to the very best of my knowledge there's been intense negotiations for the last month, working out the final details under the investing-for-growth agenda, and the announcement now made by the Minister is after full confirmation from the developers.


STEPHEN MCDONELL: So no environmental impact statements, no other hurdles to get over?


WILSON TUCKEY: All of those issues have been tested previously.  This project's been on the drawing board for quite some time.  The only limiting factor of recent times was getting a financial package together that could warrant the investment by the Visy Group.  And it’s the Federal Government's intervention with its investing for growth support that's done the job.


STEPHEN MCDONELL: Now, is this a direct $40 million handout, if you like;  it's not a loan;  there are no strings attached?


WILSON TUCKEY: There's no strings of that nature attached although it is still fully taxed, in other words, the company as these benefits flow through.  And they flow through in many ways - some of it will be in roadworks and things of that nature.  It's not necessarily directly applicable to the construction of the actual pulp mill.


STEPHEN MCDONELL: But why this shift in ideology?  What happened to the days when picking winners was considered a big no-no, the market was to be left to its own devices, and now the Government's plunging back in again?


WILSON TUCKEY: Well, I think it's all a recognition of what's been happening around the world in terms of these incentives, and the thing just simply wasn't going to go ahead if there wasn't some assistance from government.


STEPHEN MCDONELL: Do you think then we're seeing a shift back to the days, all over the world for that matter, when governments would make strategic investments?


WILSON TUCKEY: Well, governments have always done that and, of course, so have we.


STEPHEN MCDONELL: But in the '80s we were told this ideology was all wrong.


WILSON TUCKEY: Well, that was a view held at the time and not everybody practised it - that was the problem.


STEPHEN MCDONELL: And now it's all over, though, this ideology these days?


WILSON TUCKEY: [inaudible] $40 million outlay, or even a few hundred million over five or six years could hardly be called an absolutely radical turnaround in policy.  But, I mean, there is some simple arithmetic that can be done on these issues.  If you can create a thousand new jobs you are well aware of the benefits in terms of reduced welfare payments and higher taxes collected.


STEPHEN MCDONELL: You're sounding like a out-and-out socialist, Mr Tuckey.


WILSON TUCKEY: Well, I will always argue where I think there's a national benefit.  And I think the Prime Minister's decision to bring the investing-for-growth policy forward is going to have some good outcomes for Australia without what would be considered significantly large amounts of money out of a Federal budget of, what, $130 billion.


PETER CAVE: The Federal Forestry Minister, Wilson Tuckey.