December 19th 2015

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Articles from this issue:

COVER STORY The first Christmas: a birth that set fire to men's hearts

CANBERRA OBSERVED A Nationals welcome no sure thing for Macfarlane

CLIMATE CHANGE $100bn a year climate fund the rub in Paris deadlock

FAMILY AND SOCIETY Free speech petition: appeal all 'right not to be offended' clauses

WATER POLICY Review tells of destruction of farms in Goulburn Valley

CULTURE AND POLITICS Liberalism's disappearing act on human freedom

TAX REVIEW Rise in GST a no go when the need is for jobs

HISTORY Taiwan's first people have survived waves of settlers

FREEDOM OF RELIGION Law not broad enough to contain freedom's flow

SPEECH IN PARLIAMENT Credit where credit is long overdue: B.A. Santamaria

FAMILY AND SOCIETY Swedish daycare part II: problems of weak parenting

CINEMA No life is lived as an island: It's a Wonderful Life

BOOK REVIEW A contribution to Pope Francis' call for a conversation on conservation


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Review tells of destruction of farms in Goulburn Valley

by Patrick J. Byrne

News Weekly, December 19, 2015

Victorian and federal government projects taking 429 gigalitres of central Victoria’s Goulburn Valley high-security water out of farm production are endangering one of Australia’s most productive food bowls.

The price of water to farmers

may soar as high as $300 a megalitre,

beyond their means.


The Federal Department of Agriculture and Water Resources has conducted a mid-term review of the federal component of the project.

The irrigation reconfiguration plan has come in two parts.

Stage 1 has the Victorian government using $1 billion to buy 225 gigalitres of water (about half a Sydney Harbour) – 75 gigalitres for Melbourne Water (via a $750 million mothballed pipeline), 75 gigalitres for the Victorian Environment Water Holder and 75 gigalitres for farmers. In reality, the farmers’ 75 gigalitres seem to have been taken by the Commonwealth Environment Water Holder (CEWH).

Victoria’s Stage 1 management system was abolished after a 2011 Ombudsman investigation cited poor value for money and unacceptable probity, procurement and selective landholder payment practices. Goulburn Murray Water (GMW), a state-owned monopoly, took over the Victorian side of the project in 2012.

Stage 2 started in 2012 with the federal government providing another $1 billion to acquire a further 204 gigalitres of water by 2018. The water is to come from “savings” achieved by changing metering technology, lining some channels with plastic, and shutting down half the irrigation infrastructure.

It is this federal part of the project that is undergoing the mid-term review.

A summary of the federal review by the region’s federal Liberal MP, Sharman Stone, said the review found:

• the project aims are “unclear”;

• reporting is inadequate and confused;

• the amount of water savings “the project can deliver remains unclear”;

• forecasting data points to “a project falling further behind each month”;

• the governance and communication between all parties means “the risk is not communicated, understood, managed, elevated and actioned between parties in a timely manner”; and

• communications with landholders include “confusing, inconsistent and delayed interactions”. (page iii)

There has been no analysis of the socio-economic impacts of the plan and the business case for this infrastructure project officially remains secret.

The review notes that “the project may not be able to fulfil agreements currently in progress” – that is, the project needs urgent “resetting”, with clearly defined aims, additional expertise to assist GMW, and better communications with stakeholders, in particular with landholders. (page 36).

The report found that the project’s “original assumptions”, made in 2008 in the middle of the worst drought on record, “no longer apply” (page ii).

The plan wrongly assumed that most irrigators would be happy to see their water infrastructure removed or downsized, without compensation and via bullying and chaotic and unskilled negotiations with Goulburn Murray Water officials, often extending over periods from one to six years.

In the Millennium Drought, many farmers were struggling. Banks and other lenders pressured irrigators to sell their irrigation water to retire spiralling debt. Consequently, 1,143 of the 2,721 dairy farms in the region sold all or most of their water to the Commonwealth Environmental Water Holder.

The majority planned to continue farming by buying temporary water, which they expected would remain around $40 per megalitre (one Olympic swimming pool). The problem is that in the current drought, the price of water has soared to $200 per megalitre this year, and next year it could be over $300 per megalitre, far beyond what is economically viable for most farmers.

Water prices are soaring because across the Murray-Darling Basin so much water has been reallocated from farming to the environment that reservoirs no longer hold enough water to supply farmers after a two-year drought.

Food processors are being seriously affected. SPC, Murray Goulburn Co-op and Kagome are subsidising farmers who supply their factories because the temporary irrigation water is no longer affordable. Seven regional food manufacturers have told federal ministers that the water reconfiguration projects have removed water security, and destroyed incentives or capacity to rebuild herds or fruit and vegetable production following the drought, just when the demand for their product is booming.

While the federal mid-term review has identified serious fundamental failures, it also blamed the failure of farmers to cooperate as a key reason the project would not be finished on time or on budget. The state and federal projects are based on false assumptions and have been badly managed by the dysfunctional GMW. Despite billions of dollars in private and taxpayer-funded investment, the projects are destroying regional employment, the viability of 62 communities, 21 food factories and four abattoirs.

While the $1 billion federal plan is to transfer 204 gigalitres to the Commonwealth Environmental Water Holder, last year the CEWH held so much water for the environment that it could not use 350 gigalitres.

Both projects must be suspended and an urgent full review must be carried out in conjunction with all stakeholders in the Goulburn Valley.

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