Rachel Siewert (WA, Australian Greens) Share this | Hansard source

The Greens also support a reference of this type to the Senate Standing Committee on Rural and Regional Affairs and Transport but not for the reasons that Senator O’Brien outlined. We have concerns similar to Senator Murray’s in that we fail to see why the government has taken action on non-forestry activities but not forestry activities. We would like to examine that for a start. We would also like to look at the impact that managed investment schemes have had on the agricultural economy and on decision making in agricultural areas, and how MISs at present are in fact affecting and distorting prices for water and land—and I will come back to the issue of water in a minute.

We have concerns about the impact MISs have had on family farms and the way agriculture is practised in Australia. It has become apparent that the people who develop these schemes and those who invest in them do so for the up-front tax deductions. These people do not seem to be interested in the longer term profitability of some of these schemes, which is why we have concerns about the schemes’ impact on agriculture. If you are investing in these schemes for their up-front tax deductibility, you may not be that interested in the sustainability of the scheme or of the particular agricultural enterprise. And I am deeply concerned that some of the crops being invested in are in fact unsustainable in particular areas. Growing olives, for example, where irrigation is needed, using large amounts of water, may be unsustainable in the longer term in certain areas.

Then you add in the fact that these large investment schemes are buying up water entitlements, water licences—many schemes, in fact. It was reported just yesterday that Macquarie Bank has acquired a great many of these licences with a view to planting higher security crops, thereby not only transferring water out of a good many of the districts but also transferring water entitlements to higher value crops. Now, that raises two questions for me. First, do they expect to be bought out through the $3 billion national water plan? Second, does that mean that they will try to secure that entitlement because it has now gone to higher security water applications? And they will secure that, whereas people running smaller family farms will not.

There is also the issue of the impact that these schemes are having on the price of water licences and the fact that they can aggressively enter the market. I am told, for example, that some large investors are actually going straight to brokerages before licences can even make it onto the market, thereby again, I believe, potentially distorting the water market. So, while we are looking at a process to reform and get better management of our water market, as we have already seen large investors could be buying up these allocations and distorting the market.

What I would like to know is how those water licences are going to be handled now that the changes have been made to the non-forestry managed investment schemes. How are we going to deal with those water licences? I believe that area needs reviewing. What are the implications now for rural communities, for better investments? How should we really be investing for the long term in agriculture in Australia? I do not for one minute believe that those organisations and people responsible for MISs are concerned about the long-term security and sustainability of the agricultural industry in Australia. I think they are largely focused on achieving tax deductibility for up-front initial investments. I believe an inquiry would enable us to determine how best to focus on the long-term sustainability of our agricultural industry. There is no doubt investment is required, but I do not believe that MISs, as they were, were the appropriate tool.

I would also like any inquiry to look at how many people were employed through these MISs in our regional centres and just what impact phasing the schemes out of regional communities would have. You have to balance that against the number of family farms that have been bought out, both for plantations and alternative crops in areas where—I will say it once again—we have deep concerns about their sustainability.

I was looking at a media release from the Australian Dairy Farmers. They actually supported the government’s change in the MIS process because they were concerned about the impact it is having on issues such as water—and land prices, in particular, where smaller landowners cannot afford to compete with the MIS and the impact that has. I think we should also be investigating what impact it is having on the commodities market. I definitely agree with my colleagues on looking at the transition process for moving from this investment scheme to supporting sustainable agriculture and rural communities. I think that is tremendously important. Therefore, the Greens would support this sort of inquiry but, as I said, not necessarily on the terms Senator O’Brien has articulated.

I think how we manage investment into an agricultural system undergoing change through dramatically reduced water security and climate change is the sort of issue that very strongly needs further investigation. And it needs to be looked at holistically. That is another reason for an inquiry of this sort. We should not necessarily be looking at how we go back to the present system. From everything I have seen, I do not believe this is for the good of the long-term sustainability of agriculture in Australia—and certainly not for family farms and a good deal of regional communities.

I think some of the managed investment schemes have favoured some regional communities and not others. I suspect that the negative impacts have far outweighed any positive impacts, and I would dearly like to see the figures for employment under the current schemes versus how many people have been lost to regional communities. I could reel off a number of communities in my home state of Western Australia which have suffered from tremendously reduced numbers in the community due to the impact of areas being bought up, taken out of traditional farm practices and moved into plantations, in particular, but also various other schemes under the MIS system.

So we would support this referral but we would seek to investigate a far broader set of issues, including the impacts the managed investment schemes have had by distorting our agricultural systems, land practices and land and water prices in Australia. We also need to look at how this is damaging our water market, particularly because big players have now bought up large numbers of water entitlements in the water market. I believe they are distorting those markets and will continue to. I would dearly love to know whether they will now expect government to buy out those allocations. They have driven up the price of water, so it will cost us even more to fix the overallocation, particularly in the Murray-Darling system. It is going to be vastly more expensive due to the impacts of the MIS process. I would like to know what these companies now intend to do with the entitlements that they have bought up if they are not intending to sell them. Where do they intend to invest? I believe all of these issues need very thorough investigation.