WATER: Government's misspent billions will destroy our farms
by Patrick J. Byrne
News Weekly, May 1, 2010
The rorted home insulation and school-building schemes arguably kept people in jobs when the nation faced a possible economic downturn. In contrast, the Federal Government's $3.1 billion Murray-Darling Basin water buy-back scheme is shutting down farmers and whole irrigation regions.
In addition, the $5.8 billion water infrastructure upgrade plan is not going to produce major water savings in the Basin, and risks wasting taxpayers funds, according to the Australian Government Productivity Commission.
Its recent report, Market Mechanisms for Recovering Water in the Murray-Darling Basin, said that most of the "low-hanging fruit" has already been picked and many future investments will simply be "gold-plating" water infrastructure (p.xxiv).
Indeed, the commission was highly critical of the Federal Government's policies, saying that "water policy in the Murray-Darling Basin has been poorly designed, and therefore difficult to implement".
The commission was strongly critical of two particular policies:
1) the rapid buy-back of farmers' permanent water allocations before a plan for the Basin is finalised next year; and
2) The allocation of funds to infrastructure upgrades before it was established if the irrigation regions receiving funds had a long-term future, since some may collapse given the massive amount of water being bought back by governments for the sake of the environment (p.255).
Other critics of the Government's current Basin water policy have argued that had its total allocation of $8.9 billion, plus the huge amount spent on drought relief to irrigators, instead gone towards building new reservoirs, farmers would have likely survived the drought without requiring much assistance, and there would have been more water available for the environment, towns, industry and Adelaide. As a result, there would be no need to buy back irrigation water.
At the heart of the unfolding disaster is one major failure of the Federal Government and the Murray-Darling Basin Authority the complete lack of consultation with rural and regional communities on a Basin plan still a year away from completion.
Instead, federal and state governments have rapidly sought to acquire more environmental water by buying water licences and seeking water savings from infrastructure investment, without a community-scrutinised and agreed plan.
So complex and varied are the environmental, irrigation and other economic issues in the Basin, that any plan lacking local input will be based on inadequate science and have disastrous consequences for regional economies.
Just as the Federal Government failed to have the home insulation and schools-building program audited, now it has failed to have the science of the Murray-Darling Basin water plan audited.
The financial waste involved potentially rivals that of the schools-building and home insulation fiascos.
How much water is needed for the environment? It is far from clear.
The Productivity Commission says that estimates for new environmental flows are based on two key scientific assessments of the Basin.
Such estimates are yet to be publicly evaluated in the context of the Murray-Darling Basin being a desert river system in which rivers run flush with large flows for a short time, causing a huge increase in wildlife, followed by rivers drying out for long periods, leading to a huge decrease in wildlife.
This was illustrated to Australians in the brilliant ABC television documentary, Lake Eyre Australia's Outback Wonder, which depicted the huge expanse of water that flowed from western Queensland to Lake Eyre last year.
Furthermore, the Basin experiences wet periods lasting 1530 years, during which rivers and wetlands flourish, followed by equally sustained dry periods during which rivers and wetland environments steadily degrade. The Basin has been in a dry cycle since the late 1970s.
There has been no evaluation of the scientific baseline environmental needs of the Basin, against this natural cycle of variable climatic conditions and against the effect of huge reservoirs keeping rivers flowing long after they would otherwise have dried out.
Public consultations concerning the Basin plan are urgently needed in each catchment. Despite the Basin plan still being a year from completion, the purchase of water is proceeding apace.
How much water are the federal and state governments planning to purchase?
The Living Murray (2002) proposals included allocating 500 gigalitres (1 GL is about 1,000 Olympic swimming pools) for the environment. Then it was suggested that 1,500 GL would be needed.
Now, the Productivity Commission has calculated that governments, according to their current plans, could likely allocate a total of 2,540 GL, with only about 595 GL coming from investments in water-savings infrastructure (pp.262-3).
The commission is further critical of the failure of the Murray-Darling Basin Authority and by implication of the Federal Government for failing to assess the social and economic costs of taking so much irrigation water out of production.
It says that the value placed on improved environmental outcomes must be balanced by the cost to farming of lost irrigation. The commission strongly argues that if the recent Commonwealth Water Act 2007 precludes such a balanced approach, "it should be amended".
The Federal Government has rejected the commission's recommendations.
Patrick J. Byrne is national vice-president of the National Civic Council.
Australian Government Productivity Commission, Market Mechanisms for Recovering Water in the Murray-Darling Basin (Canberra), report published March 31, 2010.