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

I refer to a headline in the newspaper today—the Riverine Herald: 'Drowning in despair':

Water-starved farmer weeks from disaster.

It is a story from the Echuca area in the Victorian side of the river—Nanneela dairy farmer, John Brian, with his employee, Scott Thompson. The sadness of this story is that Scott Thompson is likely to lose his job on this dairy farm in the next few weeks. Behind the photo is bare soil and some very hungry-looking dairy cows.

But the tragedy is that this is not about drought. You might automatically imagine that I am talking about an extension of the Millennium Drought, the worst drought on record; that we have seen no rain, perhaps, and that this is just a failure of the irrigation system's dams. Perhaps they are empty. In fact, this is not a failure of climate at all; this is a shocking, reckless failure of policy and process. It is a failure of both state and federal government policy and process, beginning with the Labor government, which at the time was under the Greens' balance of power, when they brought into being the Murray-Darling Basin Plan—tragically, without any understanding of the need to have a balanced triple-bottom line.

It was always the objective of the Water Act that there be a balance between the environment, the community and the economy and that the environment certainly would have water returned to it where there was demonstrated overallocation of irrigation entitlements. We know that those did exist on some rivers in New South Wales in particular. It was not the farmers' fault; it was because, over generations, farmers had not activated their licences until an irrigation licence became a thing of value, and then it was discovered that, while those sleeper and dozer licences had lain idle on people's land titles, other allocations had been made. When all activated those entitlements, yes, there was some overallocation on some streams.

Tragically, though, in the middle of the worst drought on record, the then minister for the environment, Penny Wong, decided that it would be a very good thing, and a much cheaper way to get water for the Commonwealth Environmental Water Holder, to put an over $50 million tender into the Murray-Darling Basin and call for farmers to sell their water to the Commonwealth Environmental Water Holder. She was prepared to pay, and she did pay, over $2,000 per megalitre. She knew it would cost maybe $3,000 to $5,000 if she were to find that same water through environmental works and measures, so clearly it was a great deal for the Commonwealth.

It was a tragic deal for little communities and larger communities right through the Murray-Darling Basin. I now have schools like Invergordon, in my electorate, which had 60 students several years ago in a thriving community with some of the best soils and best climates in the Murray-Darling Basin. That school is down to six students. The Tatura Primary School once had three or four buses bringing farm children into that primary school every day. There are now a few kids from a few families on one bus. What has happened to all those farm families? What has happened to all of those jobs that went along with thriving food manufacturing in the great northern Victorian Goulburn Murray Irrigation District? The tragedy is that, of the 2,721 irrigation farms, 1,143 sold all or most of their water to the minister, Penny Wong, in the middle of the worst drought on record because the banks said: 'If you don't sell your water, we'll sell your farm. You owe us too much.'

At the time the water market was only $40 per megalitre. It was rational to imagine you could continue a farm using the temporary water market. Again, tragically, like any market situation, if you double and triple the number of buyers but halve the number of sellers or the volume of the product that is in the market, you have a massive increase in price. That is what we have seen, particularly since the market was uncapped, as well, in terms of who could buy that water. The Murray-Darling Basin temporary water market is the most fabulous little money earner now.

I have to say that one of the buyers making the best profit out of this is the Victorian government itself, which owns 75 gigalitres of what was once irrigators' water. They traded that water when there was a pipeline built from the Goulburn Murray system to Melbourne in the middle of that worst drought on record. The pipeline has been plugged through the massive community effort to put that right and to try to force Melbourne instead to use its desalination plant or to recycle its water or harvest its stormwater. That pipeline is now shut, but Melbourne Water still has 75 gigalitres a year. It cannot get it through the pipeline; the pipeline is closed, but it speculates with that water, pushing prices up and having a wonderful little earner for the Victorian government on the side.

The South Australian state government did the same with eight gigalitres it bought the other day—it thought secretly, but the whistle was blown on it. It flushes that water down the toilets of Adelaide while a person like dairy farmer John Brian has to sack his employees and watch his cattle starve.

This is absurd. I have now got a second phase of water removals from the GMID, the Goulburn Murray Irrigation District, which has been identified by its official mid-term review as unconscionable and as no value for money. Its secret business plan in fact never was required to take into account the impact of removal of another 204 gigalitres of water from the area. The farmer impact was ignored. The actual sustainability or viability of the irrigation system itself once all that water was removed was not part of the business case or the business plan. I cannot be sure of that, of course; I only know what the mid-term review has told me, because, while I have made a freedom-of-information request for a copy of this business plan, and I have asked both the Victorian state government and the Commonwealth, both have rejected my request for the business plan for the $1 billion of federal funding to fund the removal of this 204 gigalitres from my irrigators.

They are already down to just 900 gigalitres in the Goulburn-Murray irrigation system. It once had over 1,600 gigalitres. Goulburn-Murray Water itself, a state-owned, government authority with over 800 employees—a shocking, over-managed, top-heavy and incompetent mob—says that the system of irrigators' water entitlements of under 900 gigalitres is no longer viable for it to manage. With another 204 to go, you can see what I mean by the total collapse of the irrigation system, which has been the size of Tasmania—the biggest irrigation system in Australia. That is why I quite deliberately began my remarks by referring to a reckless failure of policy and process as a description of this state and federal government funded program.

It was Tony Burke who signed off the deal with the state government saying, 'We will give you $1 billion, and you give us 204 gigalitres of your water for the Commonwealth Environmental Water Holder.' Yes, we know CEWH cannot use what it has already in store. We know that it carries over more than the volume of Sydney Harbour each year while farmers are trapped in the worst drought on record. We had the tragedy of Deniliquin Rice Mill sacking 50 people two weeks ago. They could not grow the rice.

I cannot understand why the Victorian government will not accept that the mid-term review found that its business case was based on false assumptions. Those assumptions were that farmers actually wanted to go broke, leave their properties and have their channels pushed in. It is a funny thing that that was a false assumption! Blind Freddy could have told them, if they had asked an irrigator, that that was not what they wanted to see happen. That mid-term review also said that the program itself was incompetently handled; the claims of savings were not genuine savings; and the governance and communication between the parties meant that the risk was not communicated, understood, managed, elevated or actioned between parties in a timely manner. The whole thing is a complete disgrace.

It follows on from the first stage of the removal of water from irrigators, which was called the Northern Victoria Irrigation Renewal Project, or NVIRP. That first stage received funding of $1 billion from the state government. It took 225 gigalitres out of the system. The ombudsman's review of stage 1 had it abolished for corruption, insider trading and incompetent action. Tragically for us who live in this region, most of the people who were seconded to work on NVIRP were simply then rolled back into GMW and continued with their hands on the steering wheel.

I believe this Goulburn-Murray Water managed, state-owned action, funded by the federal government must have a royal commission look at the incompetence, the scamming, that is going on: the plastic lining of channels, which are perfectly clay lined, as we speak; the building of infrastructure on channels that were dried off in the 1960s, but which earn points towards claiming that there has been a water saving, so the federal funds keep pouring into Victorian government coffers. This is a disgrace. I call for a royal commission. I believe that the Australian taxpayer deserves to know what shocking waste of their funds and moneys is occurring. But the tragedy, of course, is for the irrigators, the communities and the economies of northern Victoria and southern New South Wales.

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