Tony Windsor (New England, Independent) Share this | Hansard source

Well, the member for Flinders makes some sense on climate change. He got dragged into the political blame game in the first nine minutes of his speech, which was unfortunate. What an opportunity for the member for Wentworth to enter this debate and make a statement today. All we have heard is what people are sick of hearing about: the blame game between the Commonwealth and the states. The member for Wentworth is right in the middle of one of those situations at the moment. He is fully aware of the groundwater issue—the tax treatment issue. But we will come to that in a minute.

Let us look at what the Commonwealth has done over the last 11 years, since this government was put in power. There was an agreement—and it was put in place by the former Labor government, so they are both complicit in it—on national competition policy to look at reform. Reform of water was one of the main objectives of that policy initiative. Eleven years have gone past. One of the underpinning fundamentals of that reform process was that property rights would be recognised by those who had water entitlements. Nothing happened. The member for Wentworth is well aware that that was a major objective of that policy, and to come in here today and say that the Prime Minister and others have made great steps forward in water policy is quite ridiculous when one of the things that has underpinned the policy has not been touched at all.

The issue of property rights has not been touched. One of the initial agreements of the national competition policy was that moneys would not flow from the Commonwealth to the states unless certain benchmarks were met in terms of the reform policy. However, $4.6 billion has been expended by the Commonwealth to the states when they have had the capacity within that policy document not to give that money. Why wouldn’t the states run off like vandals with the money when the Commonwealth keeps giving it to them? We have had many intergovernmental agreements, blueprints, water quality and salinity arrangements, national water initiatives, Living Murray initiatives and money being thrown as if it is confetti, and very little achieved.

We have this policy arrangement at the moment where irrigators—the people we are talking about here—have given up water. The groundwater users of New South Wales have shown the lead on this issue. They have given up water to achieve the sustainability of their groundwater resource. The member for Wentworth is well aware that they have nearly given up on the government, both state and federal, in relation to this issue. An arrangement was put in place where both governments would make a contribution to compensate these people for the loss of their income-earning capacity, the loss of a capital asset. That has gone on for nearly two years now. No decision has been made as to whether the Australian Taxation Office will tax that as income, in which case the Commonwealth will get its contribution back because it is contributing one-third to the package, or whether it will be taxed as capital.

Recently the Prime Minister said—and I know the parliamentary secretary agrees—it should be taxed as compensation. The Prime Minister wrote to me the other day and said that I might be interested to know that, at the last meeting with Premier Morris Iemma, the Premier said that it should be treated as compensation. We have everybody agreeing that it should be treated as compensation but they are getting taxed as if it were income.

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