February 17th 2007

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Articles from this issue:

EDITORIAL: The Qantas buyout - how to avoid tax

SCHOOLS: Education or political indoctrination?

CANBERRA OBSERVED: Eight months for Howard to claw his way back

WATER: PM puts water on the agenda, but ...

BUSHFIRES: Fuel-reduction burn-offs needed - ACT Coroner

STRAWS IN THE WIND: Double double, toil and trouble / Choosing a new battlefield / Immigration mess / A fire sale for DFAT?

INTELLIGENCE CORNER: The next socialist Shangri-La / Downplaying the Islamist threat / Beware the Bear

INTERNATIONAL AFFAIRS: Pakistan feels jilted by US-India nuclear deal

SPECIAL FEATURE: The legacy of B.A. Santamaria

MARRIAGE AND FAMILY: Rights and wrongs in relationship recognition

PREGNANCY COUNSELLING: Health Minister Abbott's initiative attacked

OPINION: My unhappy memories of Julia

SCIENCE: WA bid to host $2 billion radio telescope

Milton Friedman let off far too lightly (letter)

Free-market capitalism and Christianity (letter)

The enemy in our midst (letter)

Nativity film defended (letter)

CINEMA: Heroism amidst inhumanity - Blood Diamond

CINEMA: Enchanting story for all ages - Miss Potter

AS THE WORLD TURNS: Those with superior intelligence need to learn to be wise

BOOKS: TREASON IN TUDOR ENGLAND: Politics and Paranoia, by Lacey Baldwin Smith

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PM puts water on the agenda, but ...

by Patrick J. Byrne

News Weekly, February 17, 2007
The real solution to growing water needs and drier times is the building of more dams, but there is no mention of creating additional water storage capacity in the Prime Minister's $10 billion water plan. Patrick J. Byrne reports.

The Prime Minister's $10 billion water plan has put water squarely back on the agenda, after two decades of neglect by the states, which are responsible for water.

The ten-point plan for water is welcome, but conceptually it's a mixed bag. Unless some of the conceptual flaws are ironed out, billions could be squandered and Australia's agricultural, urban and industrial water problems will remain unsolved.

On the positive side, serious funds are being made available for investment in water infrastructure. The PM's proposal to support continued investment in irrigation technology, with the sharing of water savings on a 50/50 basis between irrigators and the government, is welcome. Farmers have invested heavily in water-saving irrigation methods over recent decades.

There is a crying need to provide more accurate and comprehensive data on water availability and reliability in the Murray-Darling Basin. However, it will be an entirely new role for the Bureau of Meteorology.


Protection of the Great Artesian Basin's water is commendable, and exploring the possibilities of water development in northern Australia, where 60-70 per cent of Australia's rainfall occurs, is long overdue.

Solving the problem of the Barmah Choke — a shallow, forested wetland between Echuca and Swan Hill, which limits water flows down the Murray — is a welcome priority.

However, the plan has conceptual flaws. It has a strong focus on curbing water losses from evaporation and leaking irrigation channels. But there was no mention of the biggest single losses in the Murray-Darling Basin. Up to one million megalitres (a million Olympic-sized swimming pools) are lost in evaporation annually from lakes Alexandrina and Albert in South Australia. Urgently needed is a weir to be built upstream at Wellington to hold water in the deeper Murray River channel, so as to reduce evaporation.

The real solution to growing water needs and drier times is the building of more dams. There is no mention of new water storages in the Howard plan. Had it not been for the building of the Hume and Dartmouth dams and the Snowy Mountains storages, the Murray River would have been dry for much of the last six years.

The failure to recommend new dams means that the plan has not yet addressed the shortages being faced by 17 million Australians living in the major cities.

A theme in the PM's speech announcing the plan was that water had been over-allocated to the farming sector. This smacks of the hype peddled in the 2003 Living Murray plan pushed by environmental groups like the Wentworth Group. This plan resulted in the federal and state governments committing to 500 gigalitres of environmental flows down the Murray.

However, the House of Representative Agriculture Committee, when it scrutinised the Living Murray plan, was shocked at the poor science being used to justify these environmental flows. The committee's interim report recommended that part of the $500 million for the initiative be allocated to conducting a comprehensive scientific study of the environmental needs of the Murray.

A very serious flaw is that the plan leaves trading of permanent water rights as a cornerstone of the National Water Initiative. Permanent water trade allows the trading of farmers' permanent water rights out of their delivery channel, out of their irrigation region, to any buyer for any use — rural, city, industrial or environmental.

This policy is fundamentally flawed. It treats water as a private good to be traded like cars, houses, food or consumer goods.

Water is not a private good, and how it is allocated between sectors affects third parties. For example, if half the farmers down an irrigation channel sell off their water rights, the channel becomes uneconomic, the water supply is cut off and the rest of the farmers are forced out of business.

Ironically, while the Prime Minister has been a strong advocate of National Water Initiative's water-trading policy, in his speech to the National Press Club launching his water plan, he declared water as a public good.

He referred to Alfred Deakin, who, as Victoria's Attorney-General, oversaw the first great wave of irrigation development. "Having studied water problems in the United States, [Deakin] made sure that all Victoria's surface water was public property."

Politicians have not realised it, but supporting water-trading (and therefore treating water as a private good), while declaring water as "public property", is a contradiction in terms.

This contradiction goes to the heart of the problem of the National Water Initiative. It has failed to understand the nature of water. It is attempting to have water allocated by the market when water allocation between sectors has to be done by governments.

— Patrick J. Byrne.

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