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Tasmania set to better Gunns offer

GUNNS is expected to take a bigger bite out of a federal-state Tasmanian forests package as the two governments try to shift a roadblock to peace.

GUNNS is expected to take a bigger bite out of a federal-state Tasmanian forests package as the two governments try to shift a roadblock to peace.

The Premier, Lara Giddings, left open yesterday the prospect of dipping further into a $43 million fund - set up as part of a $276 million agreement with the federal government - to reach a settlement with the troubled forestry company.

Gunns's exit from native forest logging raised the prospect of reserving about 430,000 hectares of high conservation value trees in Tasmania. But a settlement of Gunns's commercial rights is needed to extinguish any future logging in these forests and enable the agreement with the Prime Minister, Julia Gillard, to unfold.

"It is absolutely important and fundamental that we do find some conclusion with Gunns in relation to their residual contractual rights, so that we can progress the IGA [intergovernmental forest agreement] further," Ms Giddings said yesterday.

Gunns, which is under financial strain and in a trading halt for these talks, rejected an initial offer from the state government from a smaller pool of $23 million. Ms Giddings said the overall agreement was not in danger, there was goodwill on both sides, and the government was preparing to make a second offer.

"There is the $43 million, in which there is an envelope for us to be able to work through a number of issues that relate to all of this, and that's what we intend to do," she said.

Before it can make a second offer, the state will need a federal government agreement on new terms. The Environment Minister, Tony Burke, said he was confident the agreement contained all that was needed but declined to say how he might be willing to vary its funding spread.

"What matters is that the objectives of the agreement are all met," Mr Burke said. "There's a process between the Tasmanian government and Gunns, and I don't want to start telegraphing the internals of that."

Gunns has refused to comment on the talks.


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