Lyn Allison (Victoria, Australian Democrats) Share this | Hansard source

The Democrats do not support this motion from the government to approve the divestment of the Commonwealth’s 13 per cent share in the Snowy Hydro company. We are not opposed to privatisation per se. We make our judgments on every proposal for privatisation on its merits. We also challenge the government’s arguments for this divestment. The government usually trots out the same old argument that the corporation cannot invest. I think that is ironic, given that the Snowy Mountains scheme is there because of massive public investment many decades ago. And I doubt very much that the private sector would have been even remotely interested in making investments at that time or even now. That it was such a major undertaking is the reason it is public, not because of some other strange quirk of decision making.

The other argument by the government is that governments cannot regulate and provide services. Again, there is no proof of that. That is the same argument, of course, that is used for Telstra. Leaving that aside, we believe that, as a bare minimum, state and Commonwealth governments should retain their shareholdings until at least 28 per cent of the river’s original pre-dam flows are restored, environmental damage to the Snowy River habitat has been addressed, environmental protections are in place and significant amounts of water have been returned to the Murray. That is our main reason for opposing what we are facing today.

The Snowy hydro scheme had a profound impact on the health of the Murray and Snowy rivers, damming 2,300 gigalitres of water to be used for irrigation and generating hydroelectricity. Undoubtedly, these developments have helped to generate the material prosperity that we all share today. But they have also racked up an enormous ecological debt. The Australian Conservation Foundation report that, throughout its length, the diversity of the Snowy River’s habitat has been all but destroyed through the deposition of silts and sand, resulting in drastically reduced fish populations, a dramatic reduction in macroinvertebrate diversity, altered river bank vegetation and weed invasion.

At Orbost in Victoria the lack of flows has also meant that seawater now intrudes many kilometres upstream from the Snowy’s mouth, impacting on local land-holders and dramatically changing the ecology of the river. The Democrats are concerned that, fully privatised, there will be little incentive to restore the river system and protect the surrounding environment. In December last year, a spokesperson from the Victorian government told the Australian Financial Review that the state was not in a position to consider selling its holding, because it was not satisfied that there was sufficient environmental protection in place. I do not know what has happened in the last three months, but now it has agreed to sell its shares. I have to say that I am not confident that we have seen measures that should satisfy Victoria or us in that process.

We also note that the New South Wales and Victorian state governments have committed to increasing environmental flows to 21 per cent of the river’s original pre-dam flows by 2012, and to eventually increase that to 28 per cent. That is the point at which we should divest this investment, if at all. Presumably, these governments were once using profits from the Snowy hydro scheme to fund that promise but, once sold, we can see little evidence that they will find the money from elsewhere to ensure that that commitment is delivered upon. It does not make any sense to us to do it this way.

The Democrats believe that if the divestment of Commonwealth government shares in Snowy Hydro is to proceed, as obviously it will because the government has the numbers—unless Senator Heffernan decides to cross the floor; that would be interesting—the proceeds should be used to secure the recovery of the Murray and Snowy rivers for the benefit of the environment and the communities that rely on them. We say that is only fair.

While we oppose the divesting of government shares, we will move an amendment to the government’s motion to ensure the money is put towards repairing the Snowy and Murray rivers. That amendment states that the funds appropriated from the divestment of Commonwealth shareholding in the Snowy River Hydro company will be used to ensure that 28 per cent of the Snowy’s original flows are in the river by 2010, fulfil the existing commitment to establish the Snowy River scientific committee and the remainder directed into the Living Murray initiative as additional expenditure already committed to the scheme. We think that is far preferable to the revenue from this sale simply going into consolidated revenue or being used as a war chest by the government for the next election, which is probably more likely. I say to Senator Sherry that he needs to know that the Living Murray initiative is about infrastructure, so if he wants the money to be used on infrastructure, as the ALP amendment indicates, then it would happen if they supported our amendment.

As mentioned previously, the New South Wales and Victorian governments have committed 21 per cent of the river’s original pre-dam flows by 2012 and will eventually increase this to 28 per cent. Again, we have seen no time line for that, so we do not know when this is going to take place. It could be next century for all we know, and there is very little by way of confidence, I think, out there that this is going to be achieved. According to the World Wide Fund for Nature, existing commitments will leave the river system flowing at just above a fifth of its original flow, and given the recent—quiet, I might say—recommissioning of the Mowamba aqueduct, it appears that even that relative trickle is not a certainty. So much more needs to be done.

The Snowy is the first link in the Murray chain and, if governments are not willing to enforce appropriate limits on environmental extractions at the top of the river system, the whole Murray planning regime becomes little more than an exercise in managing decline. Therefore we believe the proportion of money from the sale of federal government shares should be used to fast-track water recovery to return to 28 per cent of pre-Snowy scheme flows, and a time line is also necessary. We think that 2010 is not only feasible but absolutely necessary.

While the government has already budgeted $2 billion over four years to the Living Murray initiative, which aims to return an annual average of 500 gigalitres of water to the River Murray by 2009, there is no doubt in our minds that this is not enough. Five hundred gigalitres is only one-third of the amount that water scientists say is the minimum required to return the Murray to health, and reports suggest that to date the commitment has not yet translated into any real additional water coming down the Murray.

On top of that, scientists predict that climate change will cause a decrease of 16 to 35 per cent of water flows into the rivers of the Murray-Darling Basin by 2050 with a most probable 1,100 gigalitre reduction of inflow into the River Murray by 2023. That reduction would wipe out twice over the intergovernmental target increase, and it will not hang around until 2050 for that to happen or even 2023. It will be a gradual decline in inflows. Clearly, more needs to be done and we argue that a significant portion of the sale proceeds should be used as additional funding to that already committed by the government to return more water to the river.

Finally, the Democrats are concerned that the promise of a Snowy scientific committee has not been fulfilled. There is still no sign of that promised initiative. Basic scientific monitoring of river health to deliver required flows is essential for proper checks and balances, and the government should urgently fulfil that promise. If the government insists on divesting public shares in the hydro scheme, at the very least it should ensure that the money is used to benefit communities who are suffering as a result of environmental degradation and water losses, as any responsible government would do.