Sharman Stone (Murray, Liberal Party) Share this | Hansard source

I rise tonight to speak on Appropriation Bill (No. 3) 2014-2015. Irrigation feeds the nation—at least that is what my bumper sticker says. I celebrate the new irrigation development in Tasmania. It is the way for them to go. It is a way for us to harness our water resources across Australia and to be the maximum food production nation that we can be.

Unfortunately, piece by piece, the miracle of engineering that was once the great Goulburn-Murray Water irrigation system is being dismantled. The state-owned agency, Goulburn-Murray Water, is in a serious financial situation. The Victorian Auditor-General's Water Entities report 2011-12 said the financial results of Goulburn-Murray Water are 'unsustainable and overshadow the results' of the remaining water entities in that sector. In 2010-11 the entire Goulburn-Murray Water board resigned and a number of senior managers departed. You would have hoped for better things! But, sadly, for irrigators, the food producers in my electorate, the latest report of the Auditor-General shows a further deterioration of Goulburn-Murray Water's financial position. The 2013-14 Water Entities results of the Victorian Auditor-General reported:

Goulburn-Murray Water was unable to service the finance costs associated with its existing debt from the cash flows generated by its day-to-day activities. It had to draw on new borrowings to pay operating costs.

The Auditor-General was of the opinion that this financial position was unsustainable. So what is the problem? Why is this the case? For one thing, Goulburn-Murray Water has 757 effective full-time staff to deliver 2,108,000 megalitres of water to about 14,000 irrigators. Let us compare those numbers with the operator in New South Wales—Murray Irrigation Ltd.

Murray Irrigation is not a state-owned and public-service run entity. It is a highly efficient irrigator-owned cooperative. This agency delivers half the volume that Goulburn-Murray Water does, but with only 136 effective full-time staff. If you double the number of staff to deliver the same volume as Goulburn-Murray Water to 272 full-time staff, Murray Irrigation would still have only about 36 per cent of the staff of Goulburn-Murray Water. Obviously, they would not double their staff to deliver twice the water. I am just using this example to show how grossly inefficient Goulburn-Murray Water is with a workforce of a size that cannot be justified, and with levels of efficiency and activity that are just a disgrace when compared with any other water-delivery agency in Australia or the rest of the developed world. All of those staff—very few actually operating in the field—do not produce a satisfied customer. The goal for achieving customer satisfaction was set at 82 per cent in 2011. Goulburn-Murray Water reported that their overall customer satisfaction reached 56 per cent in that year. In 2013, when Murray Irrigation in New South Wales surveyed the overall satisfaction of their customers it was at 96 per cent.

Irrigator constituents come to my office in despair. They come into my Shepparton electorate office sometimes so distressed that they are thinking of ending their lives. They complain about their unfair treatment, the unconscionable behaviour of the water authority, the litigation, which they have become embroiled in, that has taken up all of their cash and any possible future the next generation has in farming. They talk about the water costs and fees that have broken them. They talk about the poor maintenance of the system, the never-never promises that have been made to them about when their turn for the modernisation project work will come to their farm. They talk about the fact that they cannot actually apply for on-farm water use efficiency grants, because they have not as yet been 'done over' by the modernisation system. They have to wait in a queue—one year, two years. It is not unusual for five years to be the waiting period for these farms before they get the attention of Goulburn-Murray Water in the food bowl modernisation project.

These irrigators are the ones who typically are on the spurs, not the main channel system. They are in the process often of being forced to convert from irrigation to just stock or domestic-only water supplies. That means they can no longer be the highly productive food producers they once were. These are the victims of the government-endorsed Goulburn-Murray Water policy to reduce the irrigation system footprint by about a third to a half. Why, you say, would anyone in their right mind deliberately set about to destroy a magnificent irrigation system, which has often been described as the most efficient gravity-fed system in the world? The problem is that, even though there is growing demand for the dairy, fruit, cereals and meats that our food bowl produces, there was a recent tragedy—the worst drought on record.

During that worst drought on record, the people of Melbourne began to seriously fear that they would not have enough water to hose their cars and their concrete drives. The Bracks-Brumby Labor government said: 'We will take 75 gigalitres of irrigators' water a year out of the Goulburn system. We will pipe it over the Great Divide. But—oops! We can't just do that without some savings being found in the irrigation system so we can justify taking their water.' So they said: 'What can we do to save all this water? Should we plastic-line the channels or replace all the Dethridge wheels with meters?' Smarter people said that would not do it. So then they said, 'The way to save all that water is to shut down half of the irrigation systems. That's a good plan; we'll do it.'

They scraped together a billion dollars from the Victorian system to pay for the first tranche and they named the new project the Northern Victoria Irrigation Renewal Program, NVIRP. But NVIRP was abolished in July 2012 after a damning report by the Victorian Ombudsman which found that it was grossly mismanaged, with insider trading, inadequate or absent business planning, poor value for money and various other gross incompetencies. The CEO of course resigned. But the project was then rolled back into Goulburn-Murray Water to manage—and you will recall how I have just described the management capacities of Goulburn-Murray Water. So Goulburn-Murray Water have continued on with this so-called reconfiguration program, but with another $1 billion from the federal government to finish off the job.

In 2009-10 there were 1,135 non-water users in the Goulburn-Murray Water system still being charged fees for what they now call delivery shares. Today there are 1,927 non-water users in the system. That is a 58 per cent increase in four years. That is how many irrigators are being knocked out of the business of irrigating but are still trapped on dry, less productive farms or are just depending on stock and domestic water and still paying exorbitant fees and charges, which in many cases is breaking them.

But as if that were not sufficient to be heartbreaking, despairing and grossly distressing for all of my irrigators who are finding themselves trapped by this policy, we also have the water trading problem. Because about half of my dairy farmers were forced out of the business of dairying during the worst drought on record, when the irrigation system failed, Penny Wong, then Minister for the Environment, used this opportunity to offer to buy their water for the Commonwealth Environmental Water Holder for the Murray-Darling Basin Plan. Of course, if the bank has its foot on your throat and says, 'Sell up your farm or sell your water'—which you can now do separately—many farmers did just that. They sold their heifers to China and they sold their water to the Commonwealth Environmental Water Holder, thinking that perhaps they could keep on going with just temporary water purchases into the future or they would walk away altogether.

Three years ago, the temporary water price per megalitre was $20, last year it was $70 and this year it is $140. It is now beyond the price for dairy farmers to pay and still make a living on their dairy properties. What is the problem? The problem is that most of the water now—the vast majority of megalitres or, rather, gigalitres of water—in the whole of the Murray-Darling Basin is owned by the Commonwealth Environmental Water Holder. While the act allows the Commonwealth Environmental Water Holder to consider temporary trading, the entity has only done this once. That is because the trigger in the act says that trading might only occur if there is an environmental benefit or if there is no way that the environment can be served that year by an environmental release. That makes sense, except I would argue that there is also a triple bottom line enshrined in the Water Act which the minister of the day made sure was there—very rightly. That triple bottom line, surely, can have us then look at the Commonwealth Environmental Water Holder's water and say, 'Can't there be a triple bottom line benefit from releasing some of that environmental water which serves the environment and the ecosystem?' It could be a wetland filling. It could be watering a forest. It could be simulating fish or bird breeding. But that same environmental water can also serve an irrigation or consumption capacity further downstream. That is the nature of water—it flows down the system. It is not all consumed by fish and frogs; it moves along.

Unfortunately, the act also says that the only use that may be made of the funds generated by selling temporary water is to buy more water from the irrigators. That of course sends shudders up and down the spines of every food and fibre producer in the Murray-Darling Basin, because we already have a cap on further water buybacks in the system—which is 1,500 gigalitres. Much of that water has already been found for buyback. I have to say that Victoria is already oversubscribed for its volume of water buyback into the Commonwealth Environmental Water Holder's coffers.

This is now in active debate across the basin. It is something that we have to think about seriously. The Commonwealth Environmental Water Holder regulations must be reviewed so that the water can be sold temporarily to bring down the extraordinary prices now being demanded—or able to be commanded—in the temporary water market. The problem is that there are now many profiteering non-irrigator entities who are simply speculating in the temporary water market and making a very nice profit—thank you very much—including Melbourne Water itself, who still has 74 gigalitres a year to play with in the temporary market.

But it gets worse again. You would think that that is enough despair, worry and sick-making for anyone to try to survive as an irrigator in the Murray-Darling Basin, but it gets worse. We also have a constraints strategy. This was a political solution thrown together by Julia Gillard's government in its dying days when they coupled with Greens to say, 'How can we get the South Australian Premier, Mr Weatherill, onside to sign up to the Murray-Darling Basin agreement?' Weatherill had said, 'I'm going to take you to the High Court. I'm going to challenge your right to have a Murray-Darling Basin plan unless you give South Australia more water.' So thrown into the House in around November or December 2012 was the Water Amendment (Water for the Environment Special Account) Act 2013. This was an extraordinary act. It said that, for another 450 gigalitres—somehow got out of the irrigators' pockets—the mouth of the Murray would be flowing for 95 per cent of the time, without the aid of dredging, and there would be higher levels in the Lower Lakes and less salinity. But then they acknowledged that there was a catch. The rivers—the Murrumbidgee, the Goulburn, the Gwydir and especially the Murray—simply could not take that extra volume of water pushed down to keep the mouth of the Murray flowing. It could not be done. It would overflow and flood everybody out, which is environmentally a very bad thing to do besides being economically devastating for the towns and cities like Wagga Wagga, Shepparton, Mildura, Albury-Wodonga, Corowa, Cobram—and the list goes on.

So the Gillard government said, 'Oh dear. Yes, this is a problem. We'll put $1.77 billion aside over about five years and we'll use that money to remove the constraints in the system. We'll build the levies higher. We'll buy easements and we'll put covenants on places. We will build up the railway bridges and the ordinary bridges, so that when all the flooding occurs—about every 2½ years—there'll be less damage done to the human settlements.' Then they tried to con us with their constraints management strategy. In their report, the Murray-Darling Basin Authority said, 'Of course, people don't tend to build near the rivers and streams. It is mostly forests. So not that many people will be hurt.' Do you know that, in my part of the world, in the Mid- and Upper Murray, we have all built and developed along the rivers and streams because that is where the water was and still is, that is where the best soils are and that is the best way to make a living.

We now have the constraints strategy, which would be laughable if it were not so terrifying. We have to put a halt on it because, as the authority itself says, 'We just don't know what will happen. We don't know the full costs. We don't know how to ameliorate the damage which we acknowledge will happen. But it might be okay because waterlogged soils are good.' No, they are not. We get salinity problems, you know. We have a very serious problem of potentially high saline water tables throughout the Upper and Mid-Murray. If you waterlog that country, you will bring death to your magnificent native species—the beautiful river gums, box trees and various other endangered things. We have to stop this nonsense as soon as possible. (Time expired)

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