Sharman Stone (Murray, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Hansard source

I rise to speak on the Appropriation (Water Entitlements and Home Insulation) Bill 2009-2010 and the Appropriation (Water Entitlements) Bill 2009-2010. Both are government supply bills. The coalition will not oppose 2009-10 appropriation bills, in keeping with the convention of passing government supply. However, I have great concern about the purposes for which these appropriations are sought. They are, I think, a real indictment on this government in terms of its mismanaging the nation’s finances and failing to understand the impacts of bureaucratic mismanagement and a failure to take good advice about the consequences of what they do.

There are two purposes of the Appropriation (Water Entitlements and Home Insulation) Bill 2009-2010: firstly, to provide additional funding to cover rebate payments made under the government’s Home Insulation program. Administered funding of $695.8 million is to be brought forward from the 2010-11 financial year. This was announced as part of the government’s 2009-10 Mid-Year Economic and Fiscal Outlook, MYEFO.

The second purpose of the Appropriation (Water Entitlements and Home Insulation) Bill 2009-2010 is to provide additional departmental costs to the Department of Environment, Water, Heritage and the Arts associated with the acceleration of the water buybacks within the Murray-Darling Basin system. Departmental funds of $4.9 million are to be brought forward—$4.4 million from 2013-14 and $0.5 million from 2014-15, from the Water for the Future: Restoring the Balance of the Murray-Darling Basin program—to provide the Department of Environment, Water, Heritage and the Arts with adequate resourcing to efficiently manage, they say, the government’s water purchase program in 2009-10. The Appropriation (Water Entitlements) Bill 2009-2010 will provide funding for the Department of Environment, Water, Heritage and the Arts to accelerate water buybacks.

We in my part of the world are extraordinarily concerned about the whole business of water buybacks. To date the Restoring the Balance in the Murray-Darling Basin program has purchased more than 600 gigalitres of water entitlements from what is now struggling to be the food bowl of Australia. The government believes that bringing forward the funding in this bill will enable a further acceleration of environmental purchases and provide for new water purchase initiatives in 2009-10. We who live and produce food and fibre in the basin, who raise our families and support our communities and who are looking to a future in what was the most fertile and best watered crescent in Australia, are in despair about the consequences of a further acceleration of this failed policy. I will return to this point.

The government also believes that, with the additional appropriation, vendors will receive timely settlement of their water trades under the Restoring the Balance in the Murray-Darling Basin program. I am pleased to see that at least this government acknowledges the fact that the water buyback scheme has been grossly mismanaged and bungled from day one. People’s lives have been destroyed by broken promises about the timing of offers made, the timing of funds delivered into their bank accounts and the withdrawal and mismanagement of what they believed was, in writing, a contract of sale with the government.

A lot of this bungling is a consequence of very poor coordination and cooperation with state governments, the Victorian state government in particular. I would like to read, for example, a letter from one of my constituents which points out just the sort of problem people are facing. It says:

Dear Sharman

I would like to bring to your attention the most recent problem we have encountered with water trading. We have sold 300 megalitres of water to the government, held up firstly by the 10 per cent cap. Now that this cap has been removed we received notice that the sale was rejected because of an unpaid Goulburn-Murray Water invoice. With the importance of this sale to us, I was not going to leave it at that, it turns out that there were many sales rejected for this reason. The reason for the non-payment? The invoices had not been sent to the customers.

That is by Goulburn-Murray Water, a Victorian state-owned water authority.

We hope that our sale is now back on track but, as you can see, trading water is a moving minefield. I urge you to support uniform water trading rules across the Murray-Darling Basin.

Of course that is what is needed, but that is not what is being addressed by this government in its mad panic to appease so-called green elements in their mythical buyback water solution. This is a case where people did sell their water to the government and were rejected on the basis that a state authority had not been paid. In fact, the bill had not been sent. How can that be fair and decent? And what are the consequences for a drought stressed family totally dependent on that income?

These bills reveal the true story of the Rudd government’s poor policy and mismanagement of the legislative timetable, mismanagement of government funding and destruction of irrigated agriculture’s future in the Murray-Darling Basin. Let me tell you that the Murray-Darling Basin has long been understood to be in urgent need of better governance arrangements. It certainly represents some 40 per cent of farmers across Australia who produce 30 per cent of Australia’s food supply and much of its fibre. When we were in government, the Liberal and National Party coalition under John Howard took a historic step with the $10 billion 10-point plan, the Australian national water plan. We understood that since Federation the six constituencies covering the basin had failed to cooperate and there was no universal water law. We also knew in particular that New South Wales had overallocated diversion licences in streams, that this had been going on for generations and that that overallocation needed to be addressed. We therefore put the $10 billion on the table. Some of it was for on-farm water use efficiency measures. We knew that there was no point in requiring a reduction in water use if farmers could not afford to put more work in place, for example subsurface irrigation or converting to drip and trickle processes in horticulture. So that on-farm water use efficiency funding was essential. Unfortunately the Labor government has ignored that dimension until very recently when a very piecemeal offer was made far too late, when most farmers have already gone to the wall.

We also understood the importance of buyback from the overallocated streams and therefore that particular buyback element of the package was targeted. It was not the piecemeal, ad hoc so-called buying from willing sellers approach taken by the minister, Senator Penny Wong. What happens when you go into a drought stressed environment, and in this case the Murray-Darling Basin has been in drought for more than a decade; when you have farmers who are also receiving below the cost of production prices for their products, for example dairying, and you say to them and their lenders also say to them, ‘You have in your possession a water entitlement worth hundreds of thousands of dollars: what are you going to do? If you do not sell and there is an offer on the table from the government, we will require you to shut up business, your intergenerational farm or your farm enterprise that you have purchased with great risk having perhaps invested an earlier lifetime in developing up your career.’ So this government is buying water off farmers who are drought stressed and wish to continue very often in agribusiness but who are forced to sell their water entitlement as a means of just surviving another year. I have another letter from a constituent. In this case this particular water user points out:

We have taken steps to protect ourselves by selling 20 megalitres of water to the government buyback, which paid our debts for the fodder from last year.

That is how desperate many of our farmers are. If this particular dairy farmer had not sold 20 megalitres to the government they could not pay for the fodder which kept their dairy cows alive in the year before. They go on to say:

We have just received a letter from Murray Goulburn Water to say the further 25 megalitres which we were selling to help our cash flow will have to wait until the four per cent cap is lifted.

She ends up saying:

Does the government know how desperate people are? Is there any hope of help?

This is the situation being acted out over and over again across irrigated agriculture in the basin, where desperate farmers are being forced to sell their means of production in order to survive another year of drought. I have to say that any government that has the cynicism to talk about those people as willing sellers really has to re-examine its moral compass. I have to say that this business of buyback of water is so serious because environment cannot be seen to be positively impacted at all. When you are buying back an overallocated entitlement, say in one of the New South Wales streams, you are not actually buying high security H2O which can be applied to the wetlands or the river stream itself. You are simply assisting with an administrative problem created by previous New South Wales state governments. What should have taken place was a combination with on-farm water use efficiency support. There should have been more efforts to bring into line something like the state-owned water authorities in Victoria, in particular Goulburn-Murray Water, which has been inefficient and not attending to best practice for decades.

The pricing structure of Goulburn-Murray Water, for example, depends on so-called water sales, which is the additional water that is available when the dams are full. They are sales above your 100 per cent water entitlement allocation. If you do not understand the water industry, as the Labor Party does not, I can understand your being mystified by such language. But everyone in the irrigation industry in Victoria understands this terminology and the fact that Goulburn-Murray Water, a state owned authority, is in deep financial strife because of the drought. How is it overcoming that strife? It is ‘reconfiguring’ the irrigation system itself. It is shutting down hundreds and hundreds of kilometres of earthen channels which have served the irrigation industry for the last 120 years. Only what Goulburn-Murray Water is calling the main parts of the system—the trunks of the irrigation channel system—are supposed to be survivors in the future. It is plastic-lining a lot of those channels now in order to stop seepage and leaking. It is plastic lining all of the system as far as it can go, even though there was evidence around to show which sections leaked and which did not.

Modernisation of the irrigation system is long overdue, but not in the way it is being progressed. It is supposedly being paid for by northern Victorian irrigators giving up over 75 gigalitres of water a year to Melbourne via a pipeline which will go out of the Eildon Dam across the Great Dividing Range, with huge energy inputs to push and pump the water across that range. The water will then be delivered to Melbourne and Geelong. In those two cities, of course, there are alternatives to reduce water consumption: recycling, storm water harvesting, desalinisation plants, different pricing structures and better conservation measures. But, no, the state government has said that, because it is investing in contracting the irrigation system to some half of its previous area and the people it can serve, irrigators must part with their very water security.

The Goulburn River—which is tapped or, if you like, has its catchment dammed by Eildon Dam—is designated the most stressed in the Murray-Darling Basin. This is a CSIRO annual assessment of its condition. The murray cod has recently been assessed as one of the most endangered and vulnerable fish species in Australia. The murray cod’s habitat is the Goulburn River. Despite that, we have this federal government ignoring an EPBC controlled action over the north-south pipeline. The pipeline itself is virtually completed and we are told triumphantly by Mr Brumby, the Premier of Victoria, that he will stand beside this pipeline for the first gushing delivery of water by the end of this year. We believe it cannot quite happen, but he will certainly be doing it long before the Victorian state election is held later next year.

We have the EPBC controlled action with its first annual report on what was adhered to or was taken into account in terms of the conditions for the building of that pipeline. We find that there have been a number of breaches of the conditions described as necessary by the Minister for the Environment, Heritage and the Arts, Mr Garrett. What has happened about those controlled action conditions being ignored? Absolutely nothing. Nothing has occurred in terms of a ‘Please explain’ to the Victorian government, which is responsible for building this pipeline through its agency Melbourne Water. At the same time the so-called food bowl modernisation project—plastic-lining so many of the channels, which means less groundwater accessions and less groundwater to wetlands—must now be subjected to an EPBC controlled action consideration. The point about that is that the food bowl modernisation project stage 1 is already virtually completed. Another farce.

What does this government really know about environmental protection and sustainability? You would have to believe very little when you see that all it can do is bring forward through a supply bill further expenditure on water buyback and make a further effort to try and get their administration right in speeding up this water buyback process. The whole thing is obscene. The problem is that it will cause great environmental damage to the Australian continent as well. Australian farmers produce environmental services in the form of protecting biodiversity, water quality protection, soil fertility protection, and feral animal and weed control. All those environmental services are delivered by farmers as a by-product of their food and fibre production. I said before that the Murray-Darling Basin contains some 40 per cent of Australia’s farmers, who produce over 30 per cent of Australia’s food and fibre supply. Those farmers do an extraordinary job in guaranteeing, preserving or producing environmental services for the rest of Australian society. When they are beggared by poor policy—something like this water buyback policy which exploits their current vulnerability arising from drought stress and poverty—those farmers cannot continue to supply the environmental services that I mentioned a minute ago. I was pleased, I have to say, when Sydneysiders and people in Canberra actually had a taste of a dust storm the other day, because what rural communities fear most is that dust storms will become a common occurrence as the top soil of Australia, particularly in the Murray-Darling Basin, literally blows away due to the ongoing drought and farmers having to sell their water. Previously the vegetation growth held down the soil.

We have a serious environmental degradation issue in Australia, particularly across the basin, which is being exacerbated and stimulated by Australian federal Labor government mismanagement and misunderstanding. A lot of my constituents say it is deliberate and that they ‘just hate farmers’. I do not know if they do hate farmers. I think it is ignorance. I think it is cynicism. I think it is pandering to the so-called green vote without an understanding that the real environmentalists of Australia are your food and fibre producers. Every farmer knows that if you do not protect the environmental values of your property you degrade your own productivity and the chance for your children and grandchildren to continue in that line of work. So it is a nonsense to suggest that farmers are not the guardians of the environmental resources of this nation.

This bill is an acknowledgement of the failures of this government to fully understand. In terms of the home insulation program, that farce is well known. It is an echo of the water entitlement melt-down. Here we have $1 billion spent in a few months at the beginning of the program.

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