Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

Before I was interrupted by members' statements and then question time, I was posing the question: why? Why has the government failed to deliver on its election promise to establish a transparent register which would provide the Australian community with the information they deserve and require? And I was prosecuting the case that it was more likely to be motivated by the desire to keep concern in the community alive and well rather than by incompetence.

I point out that Fairfax reported today that only a month on from the release of the register Chinese investment in Australian agricultural land has doubled. The Australian Taxation Office conceded that in fact the register, as it has been designed by this government, mainly relies on self-regulation. We know that the land register is already a failure, so based on the fact that the water register is only a replication of the land register we can expect that the water register will also be a failure.

This does not just go to aspirations—it goes to incompetence and it goes to the need for this government to learn that it must proceed on evidence-based policy; it must do its research and check the facts before leaping to populist policies. The list is very long on this front. There is no greater example than the one I mentioned earlier, the backpacker tax. It was proposed without any thought, consideration or consultation and certainly no modelling on the economy-wide effects, including the second round effects. There was no analysis before the decision was made to relocate the Australian Pesticides and Veterinary Medicines Authority from Canberra, the national capital, to Minister Joyce's electorate. It was very damaging to the agriculture sector. Belatedly there has been a cost-benefit analysis but the minister will not release it. Then there is the abolition of the Inspector-General of Biosecurity. The Deputy Prime Minister was going on about biosecurity in question time today. Soon after his election he attempted to abolish the position of the Inspector-General of Biosecurity. Then of course there is drought policy. The government's response to the most recent drought was a complete failure. It was so bad that Minister Joyce stood here in question time and embellished the effectiveness of the drought policy only, of course, to change his Hansard and then when he was caught out he sacked his departmental head. This is the way this government does policy, so we should not be surprised to see this particular policy before the House failing before it even begins.

In this debate there has been a lot about the inflow of financial capital, and I appreciate the opportunity the government has given me to take a bit of licence, a bit of an indulgence, to talk of another inflow from foreign sources which is also very important to our country, and that is the inflow of human capital. In September the Armenian community in Australia celebrated a very significant anniversary—it is 25 years since the Eurasian nation state secured its independence from the Soviet Union. Over that period Armenia's development has been rapid and impressive. Already it is punching above its weight. Modern Armenia is enjoying great success despite its difficult history. The Armenian genocide and seven decades of Soviet rule would be enough to break the spirit of any culture or community, but Armenians are resilient and tough. They are also smart, sophisticated and enterprising. They hold a deep commitment to the wellbeing of their fellow man. Today I pay tribute to them and celebrate their anniversary with them. I honour all Australians of Armenian descent. The contributions of Australian Armenians to our country have been significant. I think of our own Joe Hockey—not of my political party but a significant achiever and contributor. I think of Greg Soghomonian, chair of the Armenian National Committee of Australia, who has been recognised for his leadership in diaspora communities. To mark the 25th anniversary Mr Soghomonian was awarded the Medal of Gratitude by the President of the republic at an awards ceremony in Yerevan, Armenia's capital. I have been a keen student of Armenia and its past. I have come to the conclusion our community of nation spends too much time playing word games, arguing about whether what the Armenian people suffered in 1915 was or was not genocide. Rather, we should collectively spend more time recognising that between 1915 and 1923 hundreds of thousands of Armenians had their lives cut short for no other reason than their ethnicity. The best and most effective way to heal those wounds—the wounds still carried today by Armenians and others—is to recognise and acknowledge both the events of the past and the motivations behind them. Only then will the global community collectively be able to offer the Armenians sufficient empathy and only then will the international community be able to genuinely claim an unqualified determination to identify and eradicate genocide in every corner of the globe.

The world is a better place for the emergence of a young Armenian nation with such a rich history and culture. Today I celebrate their anniversary with them and congratulate them—including all those living here in Australia who are making such a great contribution. I thank the House for its indulgence.

Andrew Broad (Mallee, National Party) Share this | Link to this | Hansard source

I rise to talk about the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016. This was an amendment put forward by the Greens and it is one of the few occasions in here where I have actually commended Adam Bandt for putting forward an amendment because I think this one does have value. Transparency creates good policy. We have lots of discussion around who owns our agricultural land, which is a discussion that we should have as Australians, as we have discussions around who owns our water entitlements. I think transparency does lead to good policy and ultimately this is a very good amendment and I am happy to speak on behalf of it. Water is wealth—it is earning potential. I grew up on an irrigation farm and I now represent a community that has the Murray River alongside it. Lots of water is extracted out of the Murray River and is turned into wonderful wealth, so you can see just how important water is. I am often in aircraft, and you can see what the countryside looks like where there is irrigation and what the country looks like where there is no water.

I want to reflect a little bit on the journey that has brought us to this point in water policy. When water was first extracted from the Murray-Darling Basin system close to 100 years ago there was a great vision of turning an area that was running very light stocking rates into a prosperous area. Of course, when they assigned that land they assigned a water allocation to the land. That served us pretty well for a very long time, but there was a view that if we decoupled—if we removed that water asset from that land—it would create some greater reform in the irrigation communities. Of course that was quite controversial. There are some who say that that should never have happened.

I want to reflect a little on the intention of that reform. The intention was to allow greater diversification of crops. It was to allow water to flow to the highest value productive use. We have seen across my patch some significant diversification of products that would never have been available had we not decoupled water from land. We grow 25 per cent of Australia's carrots in the electorate of Mallee. We now grow nearly $1 billion worth of almonds in my patch. These things probably would never have taken place had we not decoupled water from land.

The intention of the reform was never to take water out of production; it was to simply allow the water to move between production systems. I fear that there have been some negative consequences of that reform. I have talked about the positive consequences but negative consequences took place as the Labor Party began to implement the buybacks of the Murray-Darling Basin Plan. I was instrumental in those discussions when I was President of the Victorian Farmers Federation. Both sides of the parliament have been quite pleased to work on a cap—a maximum of 1,500 gigalitres—that will be purchased out of consumptive use.

The market has matured. It has taken a little while for people to get their head around managing water—managing a water portfolio as an asset external to the land that they also own as an asset. This has led at times to lessons. People who were purchasing water thought they had it and then lost it through carryover when the Hume Dam spilled. It has led to a little bit of uncertainty. I think that is now starting to find a bit more equilibrium as people work through what is New South Wales entitlement, what is Victorian entitlement, what is high security and what is low security. It is not simple; it is quite complex. I have grown up around water management and irrigation management all my life and I have represented farmers, but even I do not profess to know all there is to know about water management.

That led to the development of water brokers. In my opinion water brokers have a very key role to play as people develop their water portfolio, as they assist those who go through the marketplace. I might add that reform does need to take place with water brokers. I believe trust funds need to be set up like in real estate. When you are transferring water—even a temporary sale from one user to another—there are quite substantial amounts of money. There is no legislative framework that requires a water broker to hold those funds in trust. That potentially puts at risk the money in that transaction process if a water broker folds. That is a reform I think still needs to continue to move forward.

There has been the challenge between the sale of permanent entitlements and temporary sales. Of course there is the risk of speculators entering the market and playing a role in undermining the intention of the original water reform. The intention of decoupling water was so that you could take water from one consumptive use to another. The intention was never that you would develop a network of middle people who own water without having a productive use for that water and who would say: 'This is a package of water that is simply going to be speculated. I'm going to sell it in temporary sales to the highest bidder each year.'

It is my great ambition that we move towards a process where we eliminate speculators from the marketplace. Essentially water is not just a financial package; water is a physical product and, under the stewardship of the Australian people, you can take an entitlement and you can grow something with it. The principle makes sense that, if water is not used to grow grass for dairy cows this year because it is drier, it will move upstream to go to horticulture. People generally endorse the principle that you can make more money growing cotton than growing lambs this year so you move the water from one to the other. But I think we should be very uneasy with the concept of a person sitting in an office in Collins Street having a portfolio of water when they do not actually own a farm or have a use for it and are just speculating on the market. That was also not the intention of the reforms of decoupling. This legislation goes to the heart of that. It is saying that an investor who is offshore should be declared within the marketplace. If they are going to be a substantial water holder, they should have some transparency around that. That was never the great intention of decoupling of water. It was originally linked to land, but in this day and age this is the way the marketplace has moved.

I also think there needs to be some more reform around those who do hold water and do not have a consumptive use for it. One reform is that if you are going to carry water—to carryover water is to keep water in a dam and not use it in that given year—and you are not a consumptive user of it then you should take a 15 per cent surcharge on that, because you are essentially removing the opportunity for someone else to store water in that catchment and use that water for consumptive use. That 15 per cent surcharge—essentially a loss of 15 per cent—if you choose to carry that over incentivises you to make sure that the water you hold goes into the productive market. Water is not to be held for you to play the market with; water is to be made available for us as a country to grow our products so we can then export and create jobs for Australians.

Another thing needs to happen. An extraction point needs to be listed. That is a way of eliminating speculators from the market. If you hold a water entitlement, you have to nominate where the extraction point is going to be. That limits your ability to be a speculator, and it favours those who are going to use water in producing products.

I think there do need to be some changes in our carryover laws. This is more a state legislation, because each state has different regulations around carryover. At the moment, for example, Dartmouth is about 75 per cent full and Hume is full and spilling, and it does burden me that we are seeing people who quite frugally use their water and hold some water back in carryover losing that carryover because the trigger for the carryover is the Hume spilling, as opposed to Dartmouth spilling. I think there would be merit—in particular, for those who have carryover as a result of frugal water management on their own farm—in having that carryover linked to Dartmouth as opposed to Hume.

It is a little bit different if you are someone who has just purchased carryover water as a risk management strategy. I think, if you are someone who, on your own farm, has said, 'Well, I've got 100 megalitres of water. I'm going to be very frugal with my water management. I'm going to use 60 megalitres of water. I have been able to do that by putting better technology on and by managing my practices. Therefore, I have kept 40 megalitres back in the catchment,'—to then be penalised in a year like this, where Hume has spilled and they have actually lost it. It sends the wrong signal. What we want to send as the signal is that, if you manage your water very well and you can still produce the crops that you can produce, then you should be able to be rewarded for that.

I also believe that there is justifiable concern about environmental groups who want to go and buy consumptive water and hold that for an environmental flow. We, as a government, in conjunction with the opposition, have found a middle ground of a 1,500 gigalitres cap of water that can flow for the environment. That is important. Some of the people who are the most passionate about river health are the irrigators who live on the river. They live and breathe it. They want to have a long-term, safe and healthy environment for their children to be brought up in those communities.

In doing that, we have agreed on a 1,500 gigalitre cap. It concerns me that there are environmental groups who are out there buying water that is traditionally used for growing food. They are choosing to hold that back and have their own environmental flows. I think that then becomes very hard for the Murray-Darling Basin Authority to manage, because they have got other groups, such as the Nature Conservancy and other groups, who want to try their own space in water management. I think that does not lead to good management. Ultimately, good management leads to better fish stocks, better river health, better trees and better wetlands. The water of anyone who is a private water holder and who intends to use their water for the environment should be included in the 1,500 gigalitre cap. It certainly should not be water above that.

I commend the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016. Transparency creates good policy. I believe that common sense is what people are looking for. People believe in healthy rivers, they believe in healthy environments and they want to use the water for its main intended use, which was to look after the health of the river and to look after the economic opportunities for their families that are growing food and for the country as a whole. They think transparency would be a very good thing, and I think this legislation goes a long way to delivering that.

It is very easy to work out the value of water. If you can have clear legislation that shows how many megalitres are held by foreign owners, you can very quickly, on the back of an envelope or with a calculator, work out what that translates to dollars, which has been one of the criticisms about foreign ownership of agricultural land, because land is not so clearly defined. Always being mindful of the intention of the decoupling of water years ago, which was about moving water to its highest value use, which was about ensuring that we keep water for production so that Australians can feed themselves, so that Australians can export the food and so Australians can have jobs. I think, with some good, sound and reasoned discussion, we can deliver confidence in water management in this country.

Meryl Swanson (Paterson, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016. I speak in support of this bill even though it is manifestly inadequate. This bill amends the government's Register of Foreign Ownership of Agricultural Land Act 2015, which was also manifestly inadequate. Before the election, Labor proposed a foreign ownership register that would allow every Australian to see who had purchased what agricultural land, when, and for how much. The coalition said that they would match this promise. They did not. As the member for Mallee has just pointed out, transparency creates good policy—indeed it does. Labor's plan would have ensured transparency of foreign ownership of Australian land, and in doing so it would have helped build community confidence in foreign investment in agriculture.

Labor's plan would have created a searchable database in which any Australian who wanted to could have checked who was buying what, when and for how much with the simple click of a mouse. The government's register does not do that. The government register provides only an overview and a data trend about overall levels of foreign ownership. It is clearly not the level of detail that we proposed. It does not provide the important details that Australians want to know—the details that such a register should provide.

The national Agricultural Land Register has been described by my colleague the member for Hunter as the 'Clayton's register': the register you have when you are not having a register. I do, wholeheartedly, agree. Given a primary purpose of the register is about allaying some of the concerns in the community about ownership of agricultural land and, thereby, building public confidence in foreign investment and in agricultural land, it clearly fails. It does the opposite. It is manifestly inadequate.

What does the register tell us? Well, it tells us that 13.6 per cent of our farmland is owned by foreign investors. But even that seems to be untrue. The Sydney Morning Herald today reports that the amount of agricultural land owned by Chinese interests has soared to above three million hectares, more than double the 1.46 million declared by the Australian Taxation Office last month. While some recent significant sales were not done by the cut-off date of 30 June, a compilation of reported land sales, endorsed by agribusiness experts, suggests that even at that date Chinese investors held about two million hectares of land—not the 1.46 million the register says. And it has been broadly criticised by many of these agribusiness experts, who are saying that clearly the numbers coming out of the ATO are just not correct. Surely this calls into question the accuracy of the register as it currently stands?

And it gets worse. The register relies heavily on self-regulation, so the Australian people have to rely on overseas companies to register their interests. And if they do not? They can be slapped with a penalty of—wait for it—$9,000. If they fail to do so, $9,000 is the penalty. I am sure if you were paying $45 million for a property, the threat of a $9,000 penalty is hardly going to make you shake in your boots.

That Sydney Morning Herald story today highlights another shortcoming of this register. It does not tell us what it means by 'farmland'. In this register 'farmland' can be an area that is highly productive and critical to our food security, or 'farmland' can be a dry part in the middle of the country with a few head of cattle running on it. There is no discernment between the two: an acre is an acre, no matter where it is, no matter what it produces. We really need more detail about this, and this register does not give us that detail or allay any fears.

The problem for many people in Australia is not foreign investment, and in particular Chinese investment, which is on the rise. The problem for many people in Australia is they do not have a full understanding, a full visibility, a full transparency of what is going on. That is what causes them to be so fearful and suspicious. They do not know the who, what, when and for how much—something a register of foreign ownership should provide.

We do need foreign investment. No-one is arguing that point. We know that it is incredibly important to us. If we are going to fulfil our aspirations in Australian agriculture to capitalise on the opportunities in Asia, we need foreign investment in agriculture and agribusiness. Foreign investment has many agreed benefits for Australia. It provides additional and important capital for economic growth. It creates employment opportunities for Australians. It improves consumer choice, promotes healthy competition and increases Australia's capacity to compete in global markets. It also increases competitiveness and productivity by introducing new technology. It provides new infrastructure, enabling access to global supply chains and markets. It enhances our skills base, and enables us to sustain higher growth. If we are going to expect the community to support foreign investment in agriculture and land, and in agribusiness, then we need to guarantee that they can have confidence in the system of registration of ownership. We need to provide them with that information and certainty.

The government has hidden behind privacy in this debate. The government has said it cannot release that information based on the privacy and confidentiality of those foreign investors. But at the same time it has said that this information is publicly available by other means, such as through state land titles offices. People could find out this information if they have the time, the wherewithal and the resources to go looking for it and if they know what they are actually looking for and where to look. Surely it is not a privacy argument. Surely the purpose of a register is to collect that information, which is already publicly available, and put it in the one place? Put it in the one register and make it easily accessible for all Australians to have a look if they are interested. But rather than do that, this government fuels community fear of foreign ownership and capitalises on that fear.

The reasons often given for concerns about foreign ownership of agricultural land are food security and national security. The basis for this fear around food security is perfectly reasonable. We live in a big, dry country and farming it can be difficult. We live in a world with an increasing need for protein, and for food in general. I understand that Australians are rightly concerned about food security and food affordability into the future. People want to be certain that we, as a government, are protecting all Australians now and into the future. We need to be able to feed ourselves and we need to be confident that we have this capacity. Currently, we export two-thirds of everything we grow in this country, so we certainly have the capacity to feed ourselves and many more worldwide. But we cannot ignore the genuine fears of Australians that we might lose that capacity and so we must be vigilant and informed about who owns our food-producing land.

The Chinese, the Americans, the English bring money to lift our productivity, to diversify our agricultural interests and bring us ready-made markets in growing countries. And all of that is a good thing for Australia. We have the Foreign Investment Review Board that is tasked with making sure all these investments are in the national interest. Investments are reviewed on a case by case basis, maximising investment flow while protecting Australia's interests and providing assurance to the community.

In my electorate of Paterson, part of the New South Wales Hunter Valley, we have substantial coalmines that sit side by side with our substantial agricultural interests. The foreign investment in those coalmines is 10 times the foreign investment in agriculture in Australia. Those international coal companies have not undermined the sovereignty of our government in any way; they have not threatened our national interest. What they have done is created lots of jobs and lots of wealth in the Hunter region and beyond. The foreign investment of coalmining has brought employment and wealth we would not have had otherwise. It is important that we have a diversified economy and a diversified agricultural sector, but it is also important we understand the source of that diversity.

There are some things we do know about foreign ownership of agricultural land. We do know that the proportion of overseas ownership is increasing. According to the Australian Bureau of Statistics, the proportion of overseas ownership of agricultural land in 2013 was 12.4 per cent. This register reports it as 13.6 per cent, and today the story from The Sydney Morning Herald suggests it is even higher. It is clearly a movable feast. We know that the biggest investors are the United Kingdom, the United States and the Netherlands, as well as China. But it is still the case that we do not know the detail about who these investors are, what land they own, when they bought the land and how much they paid for it. And it seems the government would repeat that failing with the proposed water register.

This bill amends the Register of Foreign Ownership of Agricultural Land to establish a Register of Foreign Ownership of Water Entitlements. It provides for the collection of information, and publication of statistics, about foreign holdings of registrable water entitlements and long-term contractual water rights. It provides for increased transparency on the levels of foreign ownership of water entitlements across Australia. But it fails to guarantee increased transparency over the detail of who owns what in terms of water entitlements and how much they paid for it. That is the critical detail that Australians really need and want to know.

Our agricultural land and our water resources are arguably our nation's most valuable natural assets. It is vital we have a good understanding of foreign investment levels in land and water, and it is vital that those investments are subject to appropriate consideration and scrutiny. This register must be clear about the extent and value of foreign investment in water access entitlements and trends in foreign investment in water access entitlements, but it also must deliver on the detail. If the water register, as an extension of the land register, does not include sufficient detail about who owns what and how much they paid, then it will be nothing but a Clayton's register, like the agricultural land register. Water resources are a necessary input for most sectors of the economy. Agriculture consumes the greatest proportion of water resources and is expected to account for the highest proportion of water access entitlements on the register. There is also significant water use by the mining, manufacturing and energy sectors and of course households.

The nature of water rights is complex, as the member for Mallee pointed out, and it differs across Australia. Water rights can have different characteristics and can be tied to land or not. The largest natural water systems in the country are the Murray-Darling Basin, the Great Artesian Basin and the Lake Eyre Basin. The Murray-Darling Basin is home to more than two million people and includes 53,000 farm businesses. It is vital we have an understanding of who has rights to our most valuable water sources. It is proposed that the water register captures: details of the foreign investor; whether the foreign investor is a government; the nationality of the investor; the type and level of foreign investment and interest; the official water access entitlement number; the type of water covered by the entitlement; and the volume of the entitlement. Unlike the agricultural land register, the water register will capture all industry sectors, not just agricultural uses. This is also important.

I mentioned previously that the Hunter Valley has the coexistence of agriculture and coalmines, and so the allocation of water resources becomes particularly important. Coalminers in the Hunter Valley and elsewhere throughout the state of New South Wales are facing stricter limits on their groundwater extractions, under new rules imposed by the New South Wales government. These rules are recognition of the value of water to industry but, importantly, a recognition of the concern the community has over how competing interests are reconciled in relation to water. It is a most precious resource.

It is important that Australians have an understanding of who owns, or has access to, our water resources. Given the legitimate concern over foreign ownership of land and, by necessity, water, the government must ensure its water register is more transparent than its land register. The Clayton's land register has not given confidence to the Australian people about foreign ownership of agricultural land, and a Clayton's water register will not give confidence to the Australian people about foreign ownership of our other vitally important natural resource, our water. I implore this government to do a better job with the water resources register than it has done with the land register.

Damian Drum (Murray, National Party) Share this | Link to this | Hansard source

I am delighted to be able to contribute to the debate on the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016. The whole concept of a water register has enormous importance in my electorate of Murray as it would give so many landholders and irrigators the confidence and the knowledge that they need. There are many purported myths out there floating around. They either have merit or they do not have merit, but what we need is the knowledge. At the moment, that knowledge does not exist. Continually in the debate around water—which is the most contentiously debated issue in my electorate—a whole range of propositions are put forward and we do not know whether they are partially true, totally false or somewhere in between. We understand it is difficult and we understand it was much simpler when water was tied to land, which it was prior to around 2002, when we decoupled water from land. That opened up the opportunity for many irrigators, many primary producers, to on-sell their water and either move into dry farming, dry production, or sell their water, repay debt—which the Millennium Drought was very good at racking up—and then use what at that stage was low-cost temporary water to run their agricultural production.

So that is a backdrop to what we now have. We now have areas, such as the Goulburn-Murray irrigation district, which are operating with much less water than there was initially for that particular region.

The rains that have fallen in this particular year are, in effect, going to mask a range of the issues that are very pertinent to the irrigators of the Murray. But the rains have not fixed the issue that has become a real problem, which is that, in the traditionally strong areas of agriculture around the Goulburn Valley—namely, dairy and horticulture—the input costs associated with water are becoming prohibitive and really are having a significant blocking effect on further development and investment.

So it is critical to bring out into the open some of the myths and theories that are put out there and the fear associated with the question of who actually does own the water within the region. The transparency associated with this bill is going to be critical. People would suggest that the Chicago fire brigade owns a whole heap of water that is in the Victorian Goulburn-Murray system. We always hear stories that Eddie McGuire owns a heap of water. But, whether that is true or not true, we do not know the quantity, we do not know the extent and we do not know the value of that water.

There are quite a lot of farmers who retire from the land, sell their land, and move into town but hang onto the right to their water and use that water to trade each year as their retirement package or their pension. Under the rules at the moment, they have every right to do that. But the extent of that is the issue that is really driving so much of the angst within the industry. Again, this bill has the capacity to take away much of that angst by bringing all of those ownership issues and the quantity of the ownership out into the open. I think that is also what we need to know.

There is a very strong view that we should go back to having only those involved in primary production owning water. That is also not as easy and as clear as it might sound, because we do have a whole raft of smaller landholders who use a certain amount of water for primary production but also have ownership of much larger quantities of water than they could ever use on their properties, and those quantities of water are primarily used for trading purposes in each year.

So there is a range of complexities associated with bringing down hard and fast rules on what people should and should not be able to do with water. There is a whole range of opinions as to trading water outside of the region. We are waiting for the Murray-Darling Basin Plan to be completed and for the consequences of the plan to be felt once and for all and to see how a completed plan is actually going to work for productive agriculture. And there is an opinion that, until that is completed, we should have a temporary ban on water leaving each region. That is a good idea—unless you are looking to retire out of agriculture, retire your debt and move into retirement with the biggest cheque and profit you can get for your assets, which is every person's right. Then, to limit those sales to within your district is going to diminish your returns on a lifetime of work. So, again, these views have merit, but they also have negative effects for a group of people.

There is also a view that people can buy or sell in any given year but people should not be able to buy and sell in any given year, thus moving into the brokerage space where people become speculators with their water. In a given year, many farmers might decide that they are running a bit short and so need to purchase a bit of temporary water, and many of them then do so. Many of them with strong holdings of permanent, secure water realise that, due to some good rains, they are in a position to sell some water. But should we put a ban on those people who are buying and selling water in the same year? That is effectively moving them into that brokerage or trading space, and all that does is to tend to move the price of water up as it becomes a heavily traded commodity. Also, many people buy water at the start of the year so that they have a secure amount of water for their production and then, at the end of the year, if there is opportunity, they may also get rid of some of that water rather than keeping it in carryover. So, again, it is not easy or simple.

But there is also another view that, if you are going to be a water-holder, then you should pay all of the associated charges and costs that go with being a primary producer. At this stage, obviously, if you are a trader, then you do not pay the delivery shares because the delivery shares are locked into your particular farm and the number of outlets through which you bring that water into your farm. But there are other costs. So there is a view that, if people own massive amounts of water simply to make a profit from, then, to put things back on an even playing field, they should pay all the other associated charges that those who are involved in primary production pay. There is some real merit in that.

It is also worth mentioning the impacts of water; we cannot allow water to just go to the highest productive use. At the moment, almonds are the highest productive use. We already know that up around the Robinvale region there is, literally, 40 to 50 kilometres of almond plantations, which you will see as you drive along the area. They are a very profitable commodity at the moment, but the level of employment associated with an acre or a hectare is absolutely minimal. If you want to do a comparison of horticulture or dairy against almonds, you will find that for a similar amount of water, you are likely to have 38 people employed in horticulture. For a similar unit of water you are likely to have about 18 to 19 people employed in dairy, and for a similar unit of water in almonds you are likely to have one person employed.

If we are going to let water just go to the highest use, at the moment you would have all of Victoria covered in almond trees and hardly anybody employed in the production. And all that it is going to take, if we play this out, is for California, in a couple of years, to work out how to produce almonds at a cheaper price. Then, all of a sudden, our industry is taken from underneath us and, in the meantime, we would have absolutely fractured our horticulture and dairy industries because were naive enough to think that letting water go to the highest productive use was a good measure. So, we need to be very mindful of the rest of our communities, the rest of our society, and how important it is that we have an overarching view of the best use of water in our areas.

There is no doubt that the Murray-Darling Basin Plan was necessary to stop the then Labor government from buying water indiscriminately out of the market and returning that water indiscriminately back to the environment. We understand that the Murray-Darling Basin Plan was necessary to put together a plan that was going to give the environment the water that it needed. But, again, we know that there are many in the Labor Party who wanted much more than the 2,750 gigalitres. There were many within the Greens who wanted over 7,000 gigalitres—nearly all of the water in the Murray-Darling Basin to be devoted to the environment. We understand that the balance has, in many people's view, including my own, tipped way too far in favour of the environment. We need to look at ways we can look after our primary producers. We need to look at ways that this 450 gigalitres of 'upwater', which is pencilled in the agreement, can head towards South Australia. We need to look at ways to make everybody understand the social and economic impact that it is going to have on the Goulburn-Murray region. If that water was ever to leave the region, it would have such a negative impact that it does not even bear thinking about.

But, more importantly than all of that, we need to make sure that this bill finds its way through the parliament so that when we are having these debates in the future, we know who it is that owns the water, and we know the comparison between their landholdings and their water holdings. Then, we can see very clearly that they are using the vast majority of their water for productive use, or they are using the vast majority of their water for trading. We know that the more people we have purely in the market for trading, the more it forces the price of water up, which will have another detrimental effect on your standard primary producer.

So, our biggest challenge in the regions at the moment is to become more competitive on a world market. We produce this amazing quality produce. It does not matter what it is; we produce some of the best produce in the world. But we need to be able to do it at a globally competitive price, and one of the biggest input costs in the Goulburn Valley and Murray electorate is the cost of water. If we have people in there who are jacking the price of water up, simply from their trying to trade their way to wealth, then we need to look at bringing that situation out into the open. This bill, with the owner registry, is going to do that. So I welcome this bill. I wish it a speedy passage through both houses. (Time expired)

Rebekha Sharkie (Mayo, Nick Xenophon Team) Share this | Link to this | Hansard source

I rise to support the passage of this bill. In the recent election campaign in July this year, the Nick Xenophon Team ran on a ticket of increased government transparency and support for Australian made. The Australian people expect more transparency, and this bill, I believe, makes some inroads on that policy theme.

The debate on the sale of our national water interests naturally involves the debate on foreign investment in Australian agriculture as a whole. I am not opposed to foreign investment in our country but I am opposed to 'selling the farm' to the highest bidder when it means that much of our prime agricultural land will end up in the hands of international interests. And I do not apologise when I say that the best investment in Australia is that which comes from Australians. The government must balance the need for investment with the national need for sovereignty and security.

The Nick Xenophon Team policy on foreign investment is clear; we believe the Foreign Investment Review Board should lower their threshold so that any sale over $5 million is scrutinised. And I look to the New Zealand framework, which ensures any sale of land over five hectares is scrutinised to consider the benefit to the nation. It is an approach that we should aim for. New Zealand considers a number of set criteria for the national interest, taking into account whether a proposed sale will result in the creation of new job opportunities in New Zealand, and whether the sale will increase New Zealand exports or will add to market competition. I believe that they have it right and we should follow in a similar framework. Our government regularly looks to New Zealand for public policy approaches, and I would encourage it to look at New Zealand's foreign investment policy for review.

While the foreign ownership of land register is a great initiative, the statistics the government released earlier this year were, in my opinion, less than satisfactory. The Australian public now knows that 13.6 per cent of our farmland is owned by international interests, but where is the detail? What is the dollar value of that land? Where is the detail on the total number of farms owned? Where is the easy public access? Where are the region-specific statistics? We have taken the first steps towards greater public access, but it is limited. We could provide, and we should provide, much greater transparency.

The introduction of a water register allows the government to kill two birds, effectively, with one stone: learn from the mistakes with the rollout of the land register, fix the anomalies and make sure that the water register is sufficiently transparent from the beginning. The Australian people expect and deserve this kind of transparency. They deserve to know the details of foreign ownership in Australian land and water.

I am proud to say that my amazing electorate of Mayo is home to a significant volume of highly arable agricultural farmland. We have dairy farmers, cherry growers, apple growers, winemakers and everything in between. There are so many jobs to be found in food production, and it is my hope that South Australia will transition from being the 'automotive manufacturing state' to the 'agricultural and food production state'. But, if these farms are not in Australian hands, how can we guarantee that they will create Australian jobs?

Every week I speak with constituents in my electorate who are concerned at how much land is being sold to foreign investors. There is a genuine concern among regular Australians that we will lose our food security. My colleague Senator Nick Xenophon has spoken about Australia being able to feed the world. I agree with him. But we cannot feed the world if we cannot first feed ourselves, and without being in control of our own food security, and our water, we are at risk of not being able to feed our own country. In recent years, we have been so focused on a mining boom that I fear we will be missing out on the benefits of the great dining boom.

Once the land is sold overseas, there is no government ability to control how our land is used and where food produced on the land is sent. Henry Kissinger once said, 'Who controls the food supply controls the people.' In my opinion, whoever controls the country's water controls the country. In this country, our water is everything. We are lucky in Australia to have some highly valuable agricultural land, but we have many regions that do not have water, and water is the source that determines that value and opportunity. It is our lifeblood.

We need a strategic approach to foreign investment, rather than the inconsistent approach we have now. We should not be increasing the profits of overseas businesses just to water our crops. With more information we can have a more informed decision-making process. A register such as this is a good start, but we need to do more, and how we can do more, and how we can do this much better, is through greater transparency for the Australian community. Our community deserves to know.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

It gives me great pleasure to speak on this particular bill, because it is a very important bill—as all bills are here, but this goes to the heart of our ability as a nation to grow our products and produce food on the land. To do that, we need water. Therefore, the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016 goes to the heart of those things.

Labor for a long time has supported an agricultural land register and also a register of water rights. When I was in this place last time, from 2010 to 2013, there was a group that was very vocal on this issue. We formed a caucus committee to speak to the minister at the time and to do some research, and it was agreed then that Labor would come up with a bill for an agricultural land registry and also a water rights registry. Of course, the election was then called, and Labor was not able to implement its bill.

At the last election, both parties went to the electorate promising that there would be a water rights registry and, of course, the foreign ownership of agricultural land registry as well. Disappointingly, though, the current register that exists is very secretive. The public does not have access to that register. As we heard the member for Mayo say earlier, if someone wishes to look up the particular ownership and to find who is buying, who is selling and at what time they are buying and selling, unfortunately there is no way of doing that. Therefore, as we heard the shadow minister say earlier, it is the Clayton's register, the register you have when you do not have a register. So, in developing this particular amendment for a water rights register, it would be very important that we open up the doors and the blinds that are covering the information that is required to give the Australian public the confidence that is required to know that the registers of water rights and agricultural land rights are informative and can tell people the time that rights are being bought and sold, who is buying and who is selling these products.

We need to build public confidence on this issue so that people have no fear of our system. It is an important system, because if you have a look at what was taking place during the years when we had the drought—so it is not that long ago, and no doubt there will be more droughts in this nation in years to come—you find that at that time there were people buying water rights all around the country—international companies and people that had absolutely no relationship to agriculture. It was all on speculative decisions made to make money.

It could be an extremely dangerous situation, when you think that people who are speculating in these water rights are purchasing them on behalf of clients and maybe manipulating the market. But what is even scarier—and you may say it is something that is very extreme—is that, if we allow them to take control and manipulate that price, what is stopping them from going back to the people who are growing our food and saying, in a drought year or a year when there is an extreme shortage of water, 'If you want the water, we've got the water for you, but we want to buy your product at a certain price'? When people are in need, when people are desperate, these sorts of deals do take place. If, under this bill, you had a registry for water rights that was open and transparent, you would be able to see who is buying and who is purchasing, and if there are any dangers to our nation and any detriment to our agriculture, our industries et cetera.

This bill, as I said, fails to give the Australian public confidence on who owns what, when they owned it, when they transferred it and for what purposes. Water rights and water registration are really important. In the state of South Australia, anyone is free to go to the land titles office and see when a particular property was bought and sold, by whom, and who has the mortgage on it. If we had the same system here, you would be able to see if there are any detrimental effects towards a particular industry—maybe agriculture—or any other areas where it would be detrimental to our nation.

Labor will be supporting this bill. But, as I said, it is a bill that does not go far enough. The bill is supposed to allow for the collection of information and the publication of statistics about foreign holdings of registerable water entitlements and long-term contractual water rights. Australia is a world leader in the regulation and trade of water entitlements. It is recognised around the world. Since about 2004, governments here have progressively had water entitlements from land titles to encourage a greater market for water to develop. Australian water markets are well established, relatively large and greater than $30 billion in size—that is a lot of money—and on average over 1.5 billion cubic metres of liquid is traded annually. They are supported by a robust regulatory framework. We want it to be more robust. We want infrastructure and market mechanisms that facilitate efficient water trade.

In The Sydney Morning Herald today was an article about how the land register is not keeping up with what is actually happening. The article stated that the amount of land that was foreign owned was far higher than what had been reported. I understand it may take some time for reporting of the purchase of a particular acquisition of land et cetera to reach the registry, but certainly that story this morning reflected that we are not on the mark when it comes to this. For example, the article states:

The amount of agricultural land owned by Chinese interests has soared above 3 million hectares—

way above the amount that had been reported. Further:

The ATO said it did not comment on individual land holdings and acknowledged its register relied heavily on self-registration, with penalties up to $9000 …

When you are spending $50 million, $100 million or $20 million, $9,000 is absolutely a joke. There is no incentive for you to register, because the onus is on the person that is buying the land. Another article about international investors, published in The Sydney Morning Herald a couple of years ago, states:

International investors are circling Australia's water market, looking to snap up hundreds of millions of dollars worth of our most precious national resource, with almost no government limit on how much they can buy.

As I said earlier, we are in a unique position in Australia, where we have vast lands that grow everything, from grapes to wheat—you name it. Water entitlements are extremely important for our agricultural industries. If we allow control of that water in the hands of those who do not have the same interests as we do and who are basically speculating to make money on a particular entitlement, then we are going down the wrong track. I think our future here in Australia, with the collapse of manufacturing around the nation, is in value-adding to our agribusinesses. It is ensuring that we open up markets overseas, and we do export quite a bit.

It is not to say that I am against foreign investors or people investing in Australia. It has always been a very important part of our economy. But I think we have a right as a nation to be able to access who owns what, who is buying what, who is selling what and on what scale people are purchasing, whether it be water rights or whether it be agricultural land—ensuring that we are in control of our destiny. I am not saying that lightly. What I am saying is that we need to ensure that what takes place in this nation does so because we have determined it, not because a foreign company is looking at making some money very quickly for their investors or shoring up what their needs are before our needs. I am all for investment. Bring it in if it is to the benefit of this nation, if it is to the benefit of creating jobs—that is fine. How do we do that? By monitoring a register. But this register basically has a curtain over it and we cannot see who is buying and who is selling. The way this is set up, if there are trends et cetera it will be very difficult to identify those things.

Basically, this bill only fuels the xenophobia that perhaps is out there, by making it sound like we are hiding something. We should open it up. Open it up and allow everyone—allow members of parliament and journalists—to see who is behind the buying and selling of our precious land and water rights here in Australia. It was not that long ago, when we had a drought here, that we saw people investing in our water rights in an area where at the same time people who were slugging it out on the land were suffering because of the drought. We had people and companies investing and trying to make money by speculating on water rights. So I would encourage the government to ensure that we take away that veil and open up the curtains to allow people to see exactly what is taking place, and not creating more xenophobia by keeping that veil on there and not letting us know who is buying and selling, at what price, and when and where.

Tony Pasin (Barker, Liberal Party) Share this | Link to this | Hansard source

I rise in support of the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016. Well I might, because it was Mark Twain who said, 'Whiskey is for drinking, but water is for fighting over.' I have heard that code many a time. As the member for Barker and, effectively, the member for the River Murray, in South Australia, I understand the passion that comes along with water entitlements.

I grew up in south-east of South Australia. It is a little known fact that there is more irrigated horticulture in the south-east of South Australia than in all of the South Australian river communities, from the river Murray. So across the electorate, you could say, including in an area of the Mallee in Barker, which one would think would be reasonably parched, we see irrigated horticulture and agriculture. It was Neil Craig, then coach of the Crows, who said, 'If you cannot measure it, you cannot manage it,' and that is exactly what this bill seeks to do. If we are to manage foreign investment in this country in the interests of our nation—in the national interest—we need to know exactly the extent, nature and scope of that investment.

Over the course of what is now close to four years of government, what you have seen is measures by our government towards the establishment of, initially, a land register, or a register of foreign ownership of Australian land, and, now, taking the quite sensible extension of that concept through this bill, to a register of foreign ownership of water entitlements in the country. Those opposite are suggesting that we have not gone far enough, and that may well be right. There is always more work to do. I see this bill as part of a continuum as we work towards a really deep and conscious understanding in this country of land and water entitlements, particularly when we relate it to agricultural endeavour.

To those opposite, I say that you had a long time between 2007 and 2013 to embark upon these proposals, but we saw nothing. To those opposite who might criticise us in terms of this bill not going far enough, I say that it is most certainly a step in the right direction. I need to acknowledge that those opposite are supporting the government on this bill.

You have heard me say this before, and I said recently in the party room, my formative years were spent on our farming property moving, in summertime, heavy irrigation pipes across onion crops. I would suggest that they were some of the best and the worst times of my life. The work was hard and back-breaking, but I saw what irrigated agriculture can do. My family had the opportunities borne of their water entitlement and water infrastructure that they would not have had otherwise.

All who have contributed to this debate have quite appropriately identified how important water entitlements are. This is a nation that is known as the driest continent on earth. We need to make the most of our water entitlements. Getting back to the spirit of this bill, we need to know exactly who has an interest in this asset—that is, water entitlements across the nation. It needs to be managed in the national interest and this bill is most certainly a step in that direction.

I remind you that Mark Twain said, 'Whiskey is for drinking but water is for fighting over.' We need to know exactly who and what entities have interests in Australian irrigation entitlements so that this nation and this parliament can manage those assets, because if you cannot measure it you cannot manage it. I commend the bill to the House.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I represent most of North Queensland. If North Queensland were a separate country we would be the wettest continent on earth. Australia is not short of water, but the water is in the north-east quadrant of Australia. Easily the most important person in Australian history is Edward Theodore. Most people in this room would not even know who he was. If you think I am exaggerating, Paul Keating was asked who his heroes were and without hesitation he said JT Lang and Ted Theodore. Malcolm Fraser was asked who his heroes were and without any hesitation he said the American Franklin Roosevelt and the Australian Edward Theodore. And a humble, humble person like me—I have on my walls, naturally, the great Jack McEwen and Edward Theodore. When Jamie Packer came into my office he looked up and said, 'My grandfather's closest friend'.

So, why did he go into federal politics? He was the youngest ever Australian state treasurer, the youngest ever Australian premier, the youngest ever federal Treasurer, the youngest ever acting Prime Minister. Why did he go into federal politics? It was because he could see that he did not have the money or the resources to develop the water resources of his homeland, which was North Queensland—my homeland. We have these magnificent water resources. When we all die and go up to heaven and the good Lord says, 'Well, I gave you all this water, what were you doing with it?' we will say, 'Oh, we didn't want to use it, because we didn't know what could happen—it could cause ecological disasters'. Well, I think there is a story in there somewhere about a bloke who had six talents and a bloke who had three talents and a bloke who had one talent, who said, 'I hid the one talent under a rock, because I thought someone might thieve it.'

So, this is what we are doing with it. There are 300 million megalitres in Australia. Just remember that figure: 300 million megalitres. Of those, 220 million megalitres are in north-east Queensland. For reasons best known to themselves, the government decided that Fitzroy in Western Australia is not going to be developed. The Ord, for reasons best known to the government, has been given—it was not bought—to the Chinese, along with the Port of Darwin, which was sold; we got something out of that, but nothing out of the Ord. The only river in that other quadrant is the Daly, and yes, it should be developed. The Alligator Rivers run into a national park, so forget about the rest of Western Australia. That brings us back to North Queensland. The only place you can develop water resources in Australia is North Queensland. A fifth of Australia is in the Murray-Darling. The honourable member from South Australia represents one of the most productive areas of the Murray-Darling in South Australia. And we are told that some 60 per cent of Australia's agricultural production comes off the Murray-Darling, almost all of it from agriculture.

If they can produce, from 6 million megalitres of water, $50 million worth of agricultural production, what can they produce from 222 million megalitres? If we take only 10 per cent of that—22 million—it is three times the Murray-Darling production. It is a staggering figure of well over $100 million, even if we took only 10 per cent of North Queensland's water. We are now taking 0.6 per cent. Out of 222 million, about 1.2 million is being used. The rest of it rips and tears its way out to the sea. There are two great quotes when talking about water in Australia. We must remember that the greatest figure in water in modern Australia was Ernie Bridge, a very good friend of mine. Like me, he decided that the party system was never going to deliver to the north of Western Australia and got out of it. But before he got out, like me, he was a long-serving state minister. Ernie Bridge said: 'All we are asking is that the great rivers of Australia, on their pathway to the sea, pay a small tribute to those people living along their banks', a beautiful statement from one of the great Australians—a First Australian, by the way, and the first First Australian to become a minister, and he was a very prominent and successful minister, for the best part of a decade. The 'Bridging Scheme', as I call it, is a sort of Bradfield Scheme in Western Australia which has been cut off because the water has been given to the Chinese, so we Australians cannot ever use it now. Another quote from Ernie is very relevant to what the last speaker, the member for Barker, was saying. Ernie Bridge never gave a speech where I did not hear him quote the Bankers Trust report to their shareholders. He said that Bankers Trust, in their report to their shareholders, said, as always: 'Our greatest asset is our water entitlements. The wonderful thing about water entitlements is that they grow in value every year and you do not have to use them.' What a dreadful statement; what an appalling statement!

But the previous speaker was quite right in what he was saying. This is all about turning the water resources of Australia into a roulette wheel, like our stock market—a roulette wheel that does not actually produce any good for anyone on the planet and most certainly does not produce any wealth for Australians, except for those playing the roulette wheel, of course, or the stock market. In Queensland, after 26 years, since the demise of the Bjelke-Petersen government in 1990—the much maligned government that was building a major dam every single year for some 15 years in Queensland—there has not been a single dam built in Queensland, not even a weir. There are town water supplies, but that is all.

Water in Queensland is under the Water Resources Commission. What touched off the debacle on the Murray-Darling was the allocation by Queensland of a massive resource which became Cubbie Station. Some 200,000 megalitres of Murray-Darling water was allocated to just one person. It was the water resources officer who handled the proposal that went to the government. That water resources person then left the department and became part of the Murray-Darling set-up and was speaking for Cubbie Station from then on. This is not a very happy event. I am not using the word 'impropriety'; good luck to them, if they can get away with it. But a water resources officer proposes to the government an absolutely outrageous proposal that one single person gets 24,000 hectares of irrigated land. It was sold to the Chinese for $125 million and the station property was bought for $3 million. It cost about $20 million to do the development on it and it was sold for $125 million.

What I am saying, the same as the last speaker to this debate, is that water entitlements are solid gold. You do not give them out to foreign corporations. You do not give them out to big absentee landlords. You give them out to the people. In Queensland, the water resources department and minister had a choice: they could give the waters of the Flinders River to two giant absentee corporations or they could give them to the people of the area. Humble little Hughenden put up a proposal for some 60 farms—60 families making a living in a town which had almost 4,000 people in it before I became the local member. Because of the removal of the railways by the government and the removal of the wool industry by the deregulation in this place of the industry, the population has dropped to about 1,000 people. It is a little town that is dying. They asked for an allocation of water so that they could have 60 farms, create 100 jobs and have a quartering works with another 100 jobs. What a wonderful thing to happen. Did the government give them the water? No. The minute the application went into the government, the department or the minister—or somebody—immediately allocated the water to two big corporations down the bottom of the river that already have entitlements and are not using them.

As the previous speaker so rightly said, these people want the entitlements. They do not want to do the work to produce anything of value from the entitlements to overcome the annual protein drought problem that we have every year in northern Australia because it does not rain for nine months of the year. They do not want to overcome the problem that we are at only half our carrying capacity in northern Queensland—we should have nine million head of cattle; we only have five million head. We only turn off one in six instead of what we should be turning off, like the rest of Australia: one in three. They do not care about any of those things. They could not care less about the prickly acacia tree, which has taken over nearly one-tenth of the surface area of North Queensland. Are they looking after their rich cronies? Of course they are. The water is allocated to two corporations. The shareholders are amongst the richest people in this country.

The minister's name will be remembered in ignominy for the rest of his days. The minute he got the application from Hughenden, he immediately gave the land out to exactly the sorts of people that the previous speaker was referring to—people who want to own water entitlements. These people have got a $150 million golden handshake. This bill is saying that we should have a register. I do not say we should have a register. I say this place should stand on its own two feet.

Let me go back to the wool industry for a moment. A very great Australian in all the history books, an Australian called Doug Anthony, led a wonderful party call the Country Party, which has now become a disgrace. Thank goodness it has changed its name, because I would be ashamed to be associated with it. Doug Anthony introduced the wool scheme and it drove the price of wool up 300 per cent. Every single year for the next 20 years, we had a nice little growth in wool production. We had a hiccup, but Paul Keating saw his opportunity—the great deregulator saw his opportunity to swoop and to prove to Australia that he was 'Mr Tough Guy', removing all this featherbedding of the farmers. And he did. Within three years of deregulation, the price of wool had dropped to one-third of what it was. We know that phenomenon. I was told by a bloke that the electorate of the honourable member at the table, Mallee, which takes in Swan Hill, had 600 dairy farmers and now it has six. It is thanks to your party that it has however many it has. I can assure you it will be one-tenth of what it had before your deregulation of that industry.

Let me return to wool. When Doug Anthony introduced that scheme, the price of wool shot up 300 per cent. It was our biggest export item, bigger than coal, and therefore all Australians were rich and prosperous, as they were in 1990. We were amongst the 10 wealthiest nations on earth. I got a bit curious because I thought there must have been some other nations that got a benefit out of this too. If the world price of wool was pushed up by us, other nations should have got a benefit. The next biggest producer was Uruguay—and surprise, surprise! Uruguay, with this tiny little population, had a huge production of wool, so they should have been the richest people on earth. But they are not; they are amongst the 15 poorest nations on earth. How could this be? The price of wool went up 300 per cent and they were the second biggest wool-producing nation on earth—how could this be? I got curious and I found out that 72 per cent of Uruguay was not owned by Uruguayans. It was owned by Americans, and that was the productive part. So they did not own their country. They did not get any benefit from the land because they did not own it.

If we do not own the water, we will get no benefit. Let me go back to the Ord for a moment, because what you are now looking at is a situation where they will transfer price for product overseas. Under the free trade agreement, they can bring their workers in to work the Ord. So what benefit is there for Australia? We do not just need— (Time expired)

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak to the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016. Even though we know that Labor is supporting the bill, I rise to speak about it today because it gives me a chance to talk about water. Water is a big issue in Victoria—and I see nodding from those opposite. Whether you are in an electorate like Bendigo or you drive north to the Murray, all our farmers and all our towns can do is talk to you about water and the cost of water. Whilst the government has made a big show and done a lot of grandstanding about how great this bill is, let us just be clear about what this bill does and what it does not do. It does not tackle the big issues that communities in regional Australia, and particularly in Victoria, are calling for—that is, a review of water and water pricing.

This bill is the enabling legislation to allow for the collection of information and the publication of statistics about foreign holdings of registrable water entitlements and long-term contractual water rights. All it does is tell us about who owns water. All it does is tell us about the foreign holdings of registrable water. It is tinkering at the edges. That is the best way to describe this legislation. It demonstrates how this government are not serious about tackling the real challenges in the regions. Instead, they tinker at the edges, they gloss over things and they go back to their stakeholders and say, 'Great news: we have done something significant.' But the stakeholders are not convinced, and they are right.

I recently had the opportunity to meet with a number of dairy farmers in northern parts of Victoria and learn firsthand how close they came this season. As you know, it has been raining in Victoria. We welcome the rain, but what I learnt when I was talking to these dairy farmers just north of Shepparton was how close they came—how they were literally saved by the rain. The price of water in our part of the world did skyrocket last year. They were paying up to $300 per megalitre of water. It has since dropped down to $62. They said the saving grace was the fact that it started raining. With what has happened with milk prices, with what has happened with Murray-Goulburn, they said that, if it had not started raining, many of them would have put their farms up for sale. I met with 11 dairy farmers and they all said the same thing: if it had not started raining, if the price of water had not dropped, then, because of what was happening to milk prices, they would have put their farms up for sale. Where would we be today if that had happened?

Water is an issue which we need to have a robust debate about. We need to start debating and looking at the water market. We need to do more than just establish a register of foreign ownership of water entitlements and publish the data on it. We need to actually look at the competition aspects of the water market. I have serious concerns that many people are speculating in the water market and that they trade on drought. I think it is a manipulation of what is going on not just in the dairy industry but across the board.

We have great, integrated businesses like Kagome. They produce tomatoes—they are basically responsible for a lot of tomatoes up north—and they say that, again, water is one of the big cost factors. They are not opposed to foreign ownership. They are a vertically integrated company. They have an investment partnership in Japan—hence the name 'Kagome'—but the operations are still organised and run here in Australia. They are a great example of how foreign investment can help grow our agricultural businesses. That is something where this side of the House is very different from the other side. Unlike the government, Labor understands the importance of foreign capital for increasing the productivity and profitability of our agricultural sector, and Kagome is a very good example of that. However, they say the challenges that they face in their industry are the costs that blow out.

If wages went up by 400 per cent in one year, imagine what regulation or legislation or focus this government would have on wages. They rant a lot about productivity. They rant a lot about unions, about wages and about a wages explosion. What they do not rant about is the other cost factors that blow out, like the cost of water, electricity or gas, and the impact that these cost pressures are having on our agricultural sector. It is disappointing that the government are not taking the price of water more seriously. Perhaps it is because of the internal tensions that they have within their party. On one side they have the investment bankers in the Liberal Party who are very pro the water market, and on the other side they have the Nationals, who are closer to the farmers and closer to the land. Perhaps they cannot get that marriage between the two halves of the coalition right, which is why we are not seeing serious reform and a serious discussion about pricing, about water and about the water market.

There are places where the market is not always the solution, and I believe that water is one of those areas. There are a lot of farmers who really struggle in drought years. One of the farmers in my area who spoke to me last year came to me with an example in cropping. Basically, to get the crop to a yield where he could make a profit, he said he had to do a cost-benefit analysis: if he spent $200,000 on that final water to get the crop ready for sale, what price would he get and would he actually make back the money that he spent on that water? He worked out that it was not worth it. It was not worth putting that final water on the crop, so he ploughed the crop, sold it at a stockfeed rate—a low rate—and copped a loss on that crop. If the price of water had not been so high, if it had been this year—this year they will get better returns, because the price of water has dropped, as I have said. This year they are hoping for a better year.

Our farmers, and particularly our dairy farmers, are productive. They are very productive and, when you talk to them, you know that they have done all they can to make their farms and their businesses as productive as they can, yet they are still struggling. They are falling behind each year. The dairy farmers that I met with do not live as millionaires. The ones that I met with, who I had a cup of tea with and spoke with at the front of their house, live in simple homes—but they are their homes and they are proud of them. One particular dairy farmer who I spoke to, in the 16 years that he had owned, co-owned or co-shared dairy farms, had only twice not been able to break even—twice. That is pretty good, considering the exceptional circumstances that our dairy farmers have faced over the last 16 years, whether it be drought, flood, water prices, or Murray-Goulburn and what they have done to the milk prices. Yet when they were hit by Murray Goulburn they did not qualify for the concessional loans—another policy that the government has championed—and even though Rural Finance said, 'Yes, we will consider you as a client,' their bank did not guarantee them. So this is just another example of how the government misses on creating policy which will deliver real outcomes for people in the regions. Labor supports this bill, but, as I have said, the bill is really tinkering around the edges and it does not deliver the kinds of reform and support that we need to grow our agricultural sector.

Another thing that dairy farmers said to me was, 'If one more person tells me that we will be the "food bowl of Asia" I am going to punch them.' You cannot keep making these bold claims that our region will be the food bowl of Asia if you do not have proper investment in these areas. That is why we in Labor understand the importance of foreign capital to increase our productivity and profitability in the agricultural sector. It is also important to note that we will continue to push for further transparency in both the land and water registers, because there is a lot of scepticism within our community and not just in relation to water. There are lots of different understandings in the community about who actually owns are water—whether they be true or not. One person suggested to me that the Prime Minister owns all of the water and that next time he is in parliament could he give it back to Shepparton and the Shepparton farmers. I do not know if that is true. Perhaps this register may help provide some answers to that.

There is a need for further transparency in both land and water registers. We saw that particularly with foreign ownership of farms. Despite a lot of the scaremongering saying 'China are buying up all our farms' when the statistics came out we found out that Chinese nationals have bought a very small percentage of farms and farmland. It is important that we have transparency in both land and water so that people know the facts. Properly designed registers will help build public confidence in foreign capital, and being more transparent is a crucial step in achieving this objective. However, we need to make sure that in all cases of public policy we are addressing the needs of the community.

When I talked to the farmers—whether they be the dairy farmers up north or the croppers and wheat farmers around Bendigo and the Marong area—they said: 'Is this all the government has to do? This is just crazy.' They want to see a government that is real about investment in agriculture. They want to see a government that is going to take on some of the tough issues that we have in agriculture, not just do this window-dressing. Creating these registers for transparency is important but it should not be the main game. I call on the government to really take seriously the concerns that the agricultural sector are raising around the cost of water. We need to look at how that water market is working. We need to make sure that we review it and that it is fair. We cannot have another situation occur that has occurred up north, because it may not rain next time. The next time this kind of disaster hits up north, it may not rain to save the farmers.

We see price spikes where in 12 months it goes from 300 down to 62 and back up to 300. I reiterate: imagine if wages spiked like that. We would see bill after bill in this place, with speaker after speaker demanding that wages be cut and that there be some kind of government intervention. But we have not seen those opposite suggest that for water; we have not seen any suggestion from those opposite that it is even an issue. I strongly encourage the government, if they are serious about our agriculture sector and seeing jobs and growth in that sector, to do more than bring in window-dressing policy like this. This policy is good and we support it, but it is clearly not going to be enough for people in the industry. They want to see real action on water.

Keith Pitt (Hinkler, National Party, Assistant Minister for Trade, Tourism and Investment) Share this | Link to this | Hansard source

In summing up, I thank those members who have contributed to the debate. With the Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016, the government is implementing its commitment to increase transparency around foreign investment in water, through the creation of the register of foreign ownership of water entitlements.

Last year saw this government make the most significant overhaul of the Foreign Acquisitions and Takeovers Act 1975 since its introduction over 40 years ago. The changes, which took effect in December 2015, sought to ensure that Australia remained an attractive environment for investment while also strengthening the integrity of Australia's foreign investment framework. As part of these reforms the government introduced a Register of Foreign Ownership of Agricultural Land. This register has improved the level of transparency around agricultural land. The first report released on 7 September showed that 13.6 per cent of all Australian agricultural land was foreign owned.

This bill is looking to complement the Agricultural Land Register by introducing a register of foreign ownership of water entitlements. For the first time, the government and community will have a comprehensive and reliable source of information about the level of foreign investment in water.

Foreign investment makes an important contribution in supporting economic growth, jobs and prosperity, and can assist in expanding Australia's production capacity. But community concern that foreign ownership of certain water entitlements and rights is impacting prices has the potential to undermine confidence that foreign investment is in the national interest. This bill seeks to address these concerns by increasing transparency and ensuring that the government and community have a clear picture about the level of foreign ownership in this resource.

The bill amends the Register of Foreign Ownership of Agricultural Land Act 2015 to require foreign persons who hold registrable water entitlements and contractual water rights to notify the Commissioner of Taxation of those holdings from 1 July 2017. Leveraging off the existing Agricultural Land Register framework will minimise the regulatory burden for foreign persons who need to register both agricultural land and prescribed types of water. The Commissioner of Taxation will be required to provide a report on the findings of the register, which will be tabled in parliament each year. The reports will include aggregate details on the overall level of foreign ownership in water entitlements and provide a picture of the source country of investors.

I commend the bill to the House. Question agreed to.

Bill read a second time.