Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Agriculture and Water Resources, Senator Canavan. I refer to the front-page report in the Adelaide Sunday Mail by Lauren Novak on 9 October that SA Water has commissioned a feasibility study into the development by a Spanish consortium to control 20 gigalitres of recycled water annually to develop greenhouses in the Virginia region north of Adelaide. This is double the 17 gigalitres currently used in the region by up to 3,000 local growers. Peak industry body AUSVEG SA and the Horticulture Coalition of SA have raised serious concerns that giving the water rights to a single consortium could lead to massive market distortions and job losses in that region. Given that the federal government is funding the SA government's feasibility study, can the minister advise whether the study will consider alternative models for the development of the use of the water, including giving local growers a chance to bid for the water by an open and transparent market mechanism?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

I thank Senator Xenophon for his question and for his notification of this question. As I am sure the senator would know, and as the federal government believes, the northern Adelaide region is a premium horticultural area with great prospects. That is why the federal government is supporting a feasibility study into further water use in that region to help investigate what those options might be. The allocation of water in the Northern Adelaide Irrigation Area will of course be a matter for the South Australian government. However, we would expect this to be a comprehensive feasibility study that will investigate viable alternative options so that it can compare the cost of one option against another.

I understand from the South Australian government that the proposal that has been put forward to us could generate hundreds of jobs and hundreds of millions of dollars in potential income per year. That is why it is right and proper to investigate this particular proposal. The federal government, under this fund, is looking for projects that will help improve water security, reliability and efficiency to ensure that we can take advantage of growing more food and employing more people in our agricultural area.

Stephen Parry (President) Share this | Link to this | Hansard source

A point of order, Senator Xenophon?

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

It is a question of relevance. The question is: are alternative models for the development of the use of the water being considered by the feasibility study? We know that there is a feasibility study; we just want to know whether alternative models are being considered rather than this single overseas consortium.

Stephen Parry (President) Share this | Link to this | Hansard source

Thank you, Senator Xenophon. I remind the minister of the question.

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

As I indicated, we would expect that to occur. The feasibility study is being conducted by the South Australian government. The details of what they are doing are a matter for the South Australian government. But the Australian government expects viable alternative options to be considered and that information will be provided on an informed choice about what options may be funded down the track—which is of course a separate decision from a feasibility study itself. The details of the feasibility study are a matter for the South Australian government. There does seem to be great promise in this work—and that is why we are funding it—but there is of course more work to do.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Xenophon, a supplementary question.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Given that the federal government does not know what the scope of the feasibility study is, will the government heed the concerns of local farmers like Thang Le, who have said that many existing producers are reluctant to expand their business because of the uncertainty of where the extra water may go—especially to a consortium that could swamp and distort the local horticultural market—and will the government insist that any feasibility study look at the potential impact on local growers?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

Again, Senator Xenophon, we would expect this feasibility study to consult with those growers. I would note that, as in the article that Senator Xenophon mentioned in the primary question, some of those growers have written to the South Australian government. Obviously, they have written to the South Australian government, but I would expect the minister there to be considering those issues and particularly in reference to this particular study. But it is being conducted by the South Australian government, notwithstanding that we are providing funding to it. With any particular investment that may be made subsequent to the feasibility study, we would of course consult widely before we did so. I would also note that some of these areas, of course, have been affected by the storms and floods that have occurred in South Australia over the past couple of weeks. The Prime Minister visited this region last week, and earlier this week the government announced disaster relief funding for these areas and for other affected growers across South Australia.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Xenophon, a final supplementary question.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Given that federal funds are already being used and are likely to be used more so in the future, will the government in any event undertake a separate independent study to examine the impacts of the current proposal of a single consortium controlling 20 gigalitres of water a year? And will the federal government consult widely with local growers before committing any further federal funds into this project, taking into account the best result for local industry and local farmers and local jobs?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

The question about further funding, of course, is a completely separate matter to the feasibility study itself. We, of course, will be awaiting the results of the feasibility study from the South Australian government before taking further steps. But of course, consistent with the Infrastructure Development Fund that we have in place, we will consult with stakeholders, we will consult with the interested parties to these developments and will make sure that investments do take into account the impacts on particular growers or particular regions. But the question about any further funding is a separate question from the feasibility study. There is obviously work to be done here under that study and we will be considering that in due course.