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TAXPAYER
DOLLARS, SECRETIVE DEALS and THE LUCRATIVE BUSINESS of WATER
Two
years on from the Four Corners investigation into water theft in the
Murray-Darling Basin that sparked a Royal
Commission (23 January 2018), the program returns to the
river system to investigate new concerns about how the plan to rescue it is
being carried out.
"How
extravagant is this scheme...? I'd just call it a rort."
Lawyer.
On
Monday 8 July 2019, Four Corners investigates whether the contentious plan has become a
colossal waste of taxpayers' money.
"The
Murray-Darling Basin Plan is a triple bottom line fail. It's a fail for
communities, it's a fail for the economy and it's absolutely a fail for the
environment." Business owner
The
river system is the lifeblood of Australian agriculture but right now it's in
crisis. It's experiencing one of the worst droughts on record, and with mass
fish deaths capturing the headlines and farmers struggling to survive, many are
saying the scheme is failing to deliver.
"I
would characterise it as pink batts for farmers, or pink batts for earth movers.
It all had to happen in a short space of time." Contractor
Billions
of taxpayers' dollars are being poured into grants handed to irrigators in an
attempt to save more water. Four Corners investigates exactly how the money is
being spent.
"I'm
a taxpayer. I don't agree with the scheme. I think it's actually too
expensive." Farmer.
Some
irrigators say this is a once in a lifetime opportunity to transform their
businesses.
"With
a bold initiative, having the basin plan and the government investing in
irrigated agriculture, you get an opportunity to basically reset... for the next
50 years." Irrigation CEO
Others
question who is actually gaining the most from the generous scheme.
"We're
degrading the rivers at the same time as we're handing out money to a few
individuals to realise huge economic gains at public cost."
Ecologist
For
those with access to water, there are lucrative sales to be made. Water prices
have hit record highs turning it into liquid gold.
"Anyone
can come in and buy water. You don't even have to be a farmer...You're going to
make money out of it, and that's what a lot of people are doing,
unfortunately." Farmer
Others
worry that the scheme is encouraging the planting of crops even thirstier than
cotton, creating a potential time bomb.
"There's
been an explosion in the production of nuts in the Murrumbidgee, and more
broadly in the Murray-Darling Basin...This may well be a time bomb."
Former water official
Four
Corners investigates how the scheme is being regulated and whether water users
and the authorities responsible are being properly held to account.
"We're
talking about billions of dollars in taxpayers' money on a scheme that many,
many capable and reliable scientists have said, this isn't going to work."
Lawyer.
Cash
Splash, reported by Sean Rubinsztein-Dunlop, goes to air on Monday 8th July at
8.30pm. It is replayed on Tuesday 9th July at 1.00pm and Wednesday 10th at
11.20pm. It can also be seen on ABC NEWS channel on Saturday at 8.10pm AEST, ABC
iview and at abc.net.au/4corners.
Transcript
Sean
Rubinsztein-Dunlop, Reporter: Water is one of Australia's most precious
commodities. But with water prices at an all-time high, Australia's most
extravagant water spending program is coming under fire.
John
Kerrigan, Landforming Contractor: I would characterise it as pink batts for
farmers, or pink batts for earth movers.
Richard
Beasley Sc, Snr Counsel Assisting SA Royal Commission: We're talking about
billions in taxpayers money on a scheme that many many capable and reliable
scientists have said, this isn't going to work.
Sean
Rubinsztein-Dunlop: The multi-billion-dollar plan to save Australia's most
threatened river system is being branded a failure and a farce by a growing
band of critics.
Paul
Pierotti, Griffith Business Chamber: The Murray Darling Basin Plan is a triple
bottom line fail. It's fail for communities, it's fail for the economy and
it's absolutely fail for the environment. It has been the biggest waste of
$13b in the history of Australia's economy.
Prof
Richard Kingsford, Ecologist, UNSW: We're degrading the rivers at the same
time as we're handing out money to a few individuals to realise huge economic
gains at public cost.
Dr
Emma Carmody, Senior Solicitor, Environmental Defender's Office: It's almost
worse than water theft because it's the government and taxpayer money that's
being used to sanction this kind of behaviour.
Prof
Quentin Grafton, UNESCO Chair in Water Economics, ANU: And that is a national
scandal.
Sean
Rubinsztein-Dunlop: Tonight on 4 Corners, we investigate whether Australia's
plan to rescue the Murray Darling River System has become a colossal waste of
taxpayer money and ask how multi-million dollar subsidies have been secretly
handed to big business.
In
the town of Griffith, farmers are braving the bitter cold for the Riverina Field
Day's show-stopper event.
Auctioneer:
Good afternoon ladies and gentlemen. We are only about five minutes away from
starting the Wilks Water annual auction. It is a bit of a fresh day outside so
we are pleased to see such a good crowd.
Sean
Rubinsztein-Dunlop: Hundreds are preparing for fierce competition at the annual
public auction for water.
Auctioneer:
Today isn't a boxing match and no-one will fall out of the ring and fall into
the front row so don't be afraid to sit in the front row
Men
in crowd: He's defrosting. Look at his jacket! There's steam coming off it.
Sean
Rubinsztein-Dunlop: The region is in drought and water is in high demand.
Auctioneer:
We will have a few people on the phone I think also so don't think they're
running you up.
Sean
Rubinsztein-Dunlop: Farmers like Julie Andreazza compete for water year-round
against big corporations, investment banks and private traders.
Julie
Andreazza, Farmer: They're pushing the price of water up, because they're not
there to use that water for any purpose other than to gain profits. So they're
in there to get the best price. They're like speculators, they're in there just
buying and selling, and they will sell to the highest bidder. Anyone can come in
and buy water. You don't even have to be a farmer. You just need to be able to
put it into a water account and have the money to pay for it. And that doesn't
necessarily mean you're going to grow food with it, or put it towards the
environment. You're going to make money out of it, and that's what a lot of
people are doing, unfortunately.
Auctioneer:
Forty four hundred. Forty three fifty. Forty three hundred.
Sean
Rubinsztein-Dunlop: Bids are coming in from interstate and overseas.
Auctioneer:
I've got phone bidder. I got phone bid I've got fifteen hundred dollar bid now.
Phone bidder holds the money. Two thousand and fifty. Two thousand and fifty
bid. You're gonna miss it for a pineapple.
Sean
Rubinsztein-Dunlop: The sales are smashing records.
Auctioneer:
I've got 7000 dollar bid now. I got 7000. You're no good without it. I'll take
50. I got 7000. Done at 7000, you miss it, you're all done.
Sean
Rubinsztein-Dunlop: Griffith, in south-west New South Wales, is at the centre of
the most productive farming valley in Australia. The farms rely on a network of
channels and pipes delivering water from the Murrumbidgee River.
Brett
Jones, CEO Murrumbidgee Irrigation: It was one of the, the first areas that was
opened up as the, as the food bowl of Australia. A lot of the customers tell me
all they need is a little bit of water in the soils out here and, and you can
grow anything. We have up to about 3500 kilometres of channel systems within
our, our main irrigation area. You know, that's a huge, huge network of open
channels and, and pipelines.
Anthony
Kidman, Fmr Murrumbidgee Irrigation Project Manager: Traditional rice, wine and
citrus has been the crops of the past. Now we are venturing into cotton, um,
nuts, like walnuts and almonds. They're corporatized, they are looking at the
security of the area, especially water security as the underpinned fact to come
here.
Sean
Rubinsztein-Dunlop: The Andreazzas have been farming here for three generations
and grow wheat for Arnotts biscuits.
Glen
and Julie Andreazza are the New South Wales farmers of the year ... awarded for
making every drop of water count.
Julie
Andreazza, Farmer: Not a water, a drop leaves the farm anymore, because we're so
efficient and we're so careful with water. We used to be, call ourselves
farmers. I think we're business people now.
Sean
Rubinsztein-Dunlop: In the Murrumbidgee Valley, along Australia's fragile Murray
Darling river system, farming is more competitive than ever.
Julie
Andreazza, Farmer: Where there were probably 10 farmers in an area, there might
be five, because farmers who can't afford to stay in the business are having to
sell out, either to their neighbours or to their friends or, or whoever's got
the money topo-, buy the land. So you might find one farmer owns four
properties, whereas before you had four farmers, with one property each. You
can't survive on one farm.
Sean
Rubinsztein-Dunlop: Access to water has divided and enraged the community here
since the introduction of a plan to save the Murray Darling River System almost
a decade ago.
Man
in crowd: Government couldn't give a shit about what happens to us people here.
Sean
Rubinsztein-Dunlop: In 2010, the farmers of Griffith were at the centre of the
furious backlash to the plan to recover water from them for the rivers.
Man
in crowd: Get in your friggin cars and get the fuck out of here now.
Sean
Rubinsztein-Dunlop: Julie and Glen Andreazza were among thousands at a meeting
with the Murray Darling Basin Authority in Griffith. To save the
13-billion-dollar plan from going up in smoke, farmers were given a sweetener.
Man
in crowd: Fuck the government.
Sean
Rubinsztein-Dunlop: Irrigators were offered more than five billion dollars in
grants for infrastructure to reduce water going to waste on farms. The funds
would pay for new irrigation systems, dams, earthworks...in return, for giving
up a portion of their water rights.
Glen
Andreazza, Farmer: The government were looking for water. The government wanted
to come and buy back water, and people who were not willing to just give up
water as a buy-back, the carrot was dangled. In that we could do, perform works
and it just made it more palatable to people to do it. And people are going to
do it. It was, it is a lucrative thing.
Prof.
Richard Kingsford, Ecologist, UNSW: Ultimately it was a big political call to
get the Murray-Darling basin plan over the line. In other words, if we were
going to restore this system back to health and buy back water from irrigators,
it'd have to be sold as a win-win.
David
Papps, Fmr Commonwealth Environmental Water Holder: It has produced some real
benefits for individual irrigators, big irrigators, some small irrigators, but
it's been very expensive, so the taxpayers have had to fork out a lot more money
to get water from the environment than they should have.
Sean
Rubinsztein-Dunlop: David Papps was in charge of returning water to the rivers
recovered from farmers under the water infrastructure scheme.
David
Papps, Fmr Commonwealth Environmental Water Holder: I certainly had quite strong
concerns, that perhaps the volumes of water that were being attributed to the
environment were not always as accurate as they should have been. In other
words, that the accounting system was lacking transparency, and lacking rigour,
and I think it's one of the long-term problems that need to be addressed in the
Basin.
Sean
Rubinsztein-Dunlop: How extravagant would you say that this taxpayer spending
scheme is?
Richard
Beasley Sc, Snr Counsel Assisting SA Royal Commission: How extravagant is this
scheme? Extravagant's one word you could use. I'd just call it a rort. And I
think I'm justified in calling it a rort or a scam, because it still hasn't been
disclosed to the public. What is the good, best available science behind this in
terms of how much water we're getting out of these schemes? When we don't know
what the science is in terms of how much water is actually being returned?
Sean
Rubinsztein-Dunlop: The Andreazzas were among the first in Griffith to apply for
a subsidy.
In return for giving up a portion of their water rights they received more than
$100,000 for earthworks to reduce water run-off from their farm.
The value of the subsidy was about double the market price of the water.
Julie
Andreazza, Farmer: Those works were things that we were going to always do
anyway. But, obviously, cost was a problem, so we were going to do it down the
track. But when this opportunity turned up for available funds to be used, well
of course we jumped at it, so we did it.
Sean
Rubinsztein-Dunlop: So the taxpayer was giving you money that you would've spent
out of your pocket anyway?
Julie
Andreazza, Farmer: Yes and it's certainly increased the assets on our farm as
far as infrastructure. We've got better land and better efficiency but there's
probably better ways that the government can spend that money to access water.
Sean
Rubinsztein-Dunlop: So this was billions of dollars available across Australia.
People must have been saying you beauty.
Glen
Andreazza, Farmer: Oh a lot of people did and I guess they were using that as a
bank I suppose.
Sean
Rubinsztein-Dunlop: Did the taxpayer pay value for money for the water here?
Glen
Andreazza, Farmer: I think the, the- the price for the water was over-valued in
my opinion. If you worked it properly it worked very, very well, so for the- for
the person doing the works, I think it was, uh, a great benefit to them, but as
far as a tax payer, which I'm a tax payer, I- I don't agree with the scheme. I
think it's, I think it's actually, um, too expensive.
Sean
Rubinsztein-Dunlop: They later bought back the same volume of water that they'd
surrendered for the grant... and got it on the market at a lower price. Over
time, they increased their water use to expand their business.
Sean
Rubinsztein-Dunlop: Aren't we paying for you to save water?
Julie
Andreazza, Farmer: The fact is if we want to continue farming we then need to
find more water to farm. So as much as we're giving up that water, we can be
more efficient, but if- if we need to grow more crops we then need to go and buy
more water. When you buy water back, it depends on what the market is at the
time, so if water's at a low price, Glen will jump in on the market and he'll
... Well, it's what everyone does now. It's become ... water's become a
marketable product.
Prof.
Sarah Wheeler, Water Economist, University of Adelaide: A lot of it has been a
huge waste of taxpayer money. There is a lot of money we could have spent a lot
more cost-effectively to achieve a lot more recovery of environmental water. And
then, a lot of the expenditure that we have made has had a lot of unintended
consequences. We've got some of the smartest, productive, most efficient farmers
in the whole world and so when you subsidise irrigation infrastructure, you're
creating incentives for changed human behaviour, and some of that changed
behaviour means that they end up using more water.
Sean
Rubinsztein-Dunlop: The infrastructure subsidies are so lucrative, they've
encouraged people to buy unviable land and convert it into irrigated fields...
including earthmover John Kerrigan, whose business boomed as a result of the
scheme
John
Kerrigan, Landforming contractor: When the water efficiency projects came
online, our business multiplied. We had one machine at the time. We're uh, up to
10 or 12 machines presently. If there's a problem with the scheme, it's that it
was probably too enthusiastically rolled out. Uh, too much, too quickly. Um, I
would characterise it as pink batts for farmers, or pink batts for earth movers.
It all had to happen in a short space of time.
Sean
Rubinsztein-Dunlop: The scheme provided John Kerrigan so much work he bought an
undeveloped property. He then got a grant himself of more than $200,000 for
earthworks to irrigate his new land.
John
Kerrigan, Landforming contractor: The Commonwealth project funding accounted for
about half of my spend on getting the property into a good irrigable shape.
Sean
Rubinsztein-Dunlop: Taxpayers sitting at home might say, "Why am I giving a
bloke $200,000 for a project to save water through farming, when he actually
isn't farming at all?
John
Kerrigan, Landforming contractor: He's not farming before, or not irrigating it
before, because it was un-unfeasible to do, on that particular piece of real
estate. The project, ah, efficiency schemes have allowed parts of farms
throughout the district that previously were, ah, uneconomic to farm. They've
been able to increase their arable area, or their irrigable area on farms.
Sean
Rubinsztein-Dunlop: John Kerrigan didn't own any water to start with so he
bought some to give back to the government.
He perfectly legally bought cheaper water from the Murray River even though his
new farm is on the Murrumbidgee.
Sean
Rubinsztein-Dunlop: Some irrigators are taking full advantage of the loose
rules. They're buying cheaper water from another river and selling it to the
government in exchange for projects on farms here. It means they're getting an
even better deal from the already inflated price the government's been offering.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: Water's a lot cheaper in
the Murray than it is in the Murrumbidgee, so it means that the irrigator's
actually making a profit, quite a substantial profit by buying Murray water to
sell to the Commonwealth for a Murrumbidgee project. It also suggests that the
project, which is there solely because it's supposed to generate savings in the
Murrumbidgee, hasn't generated those savings, hence the irrigators gone and
bought Murray water instead.
Sean
Rubinsztein-Dunlop: Aren't you using a subsidy for saving water, in fact, in
order to profit from using more water to farm?
John
Kerrigan, Landforming contractor: The concept or the, the purpose of doing that
is to make something efficient and useful in that landscape, and to generate
more for me, of course, but also in the community.
Prof.
Sarah Wheeler, Water Economist, University of Adelaide: This happens all around
the world and this is something that economists said right at the beginning when
these programs were being designed for water recovery purposes in the
Murray-Darling Basin. They're increasing the irrigation land area and they're
increasing their water use over time.
Richard
Beasley Sc, Snr Counsel Assisting SA Royal Commission: The scheme doesn't work.
Its first problem is, it's horrendously expensive compared to buying water
licences. The evidence at the Royal Commission was, at least 2.7 times more
expensive to taxpayer.
Sean
Rubinsztein-Dunlop: Richard Beasley was the senior counsel assisting the South
Australian Royal Commission into the Murray Darling Basin Plan. This year it
found the four billion dollars spent so far on the water infrastructure scheme
was wasteful and irresponsible.
Richard
Beasley Sc, Snr Counsel Assisting SA Royal Commission: I would doubt whether
there is any proper science behind these things, and that ought to be very
closely investigated, because we're not talking about grants of $100,000, even
those should be investigated. We're talking about billions in taxpayers' money
on a scheme that many, many capable and reliable scientists have said, this
isn't going to work.
Sean
Rubinsztein-Dunlop: The grants have funded a wave of construction so farmers can
store even more water in dams. Taxpayers financed this 300-thousand-dollar dam
for wealthy businessman Kelvin Baxter.
Kelvin
Baxter, Farmer: We can get a big volume out of this into these irrigators. We
can have the whole three irrigators running at once now that we've got this.
Glen
Baxter, Farmer: That's the idea.
Sean
Rubinsztein-Dunlop: This dam can hold enough water to fill 200 Olympic swimming
pools but with the drought biting, water is scarce for Kel Baxter and his son
Glen.
Kelvin
Baxter, Farmer: There's not a lot of water, only 50 megalitres, but this could
hold 500 if we're ever able to fill it but it's been a dry 18 months.
Sean
Rubinsztein-Dunlop: The dam completed a taxpayer funded overhaul of the farm
including new spray irrigators to reduce water waste and make it more
productive.
Kelvin
Baxter, Farmer: We were always going to do this and I mean we funded some of
these through infrastructure, we funded some of them through, from our own
means. Yes, we may have become more water use efficient because of these - that
money being able to come a little bit quicker than we might have just done it
out of profits, right, you know?
Sean
Rubinsztein-Dunlop: So the scheme was paying for something you would have done
anyway.
Kelvin
Baxter, Farmer: In time for sure.
Glen
Baxter, Farmer: Correct, in time we would have done -
Kelvin
Baxter, Farmer: Absolutely, yes.
Sean
Rubinsztein-Dunlop: The water infrastructure scheme is changing the face of
agriculture across the Murray Darling Basin. It's fuelling a transition to crops
like almonds and walnuts and their thirst for water is staggering.
David
Papps, Fmr Commonwealth Environmental Water Holder: There's been an explosion in
the production of nuts in the Murrumbidgee, and more broadly in the
Murray-Darling Basin. They're extremely profitable crops. But they're permanent
plantations, and by that I mean they require water every year. They're not like
rice, or cotton, where if you don't have enough water, because there's a
drought, you simply don't plant the crop that year.
Sean
Rubinsztein-Dunlop: Richard Kingsford has been studying the Valley for more than
30 years.
Prof
Richard Kingsford, Ecologist, UNSW: I've really seen agriculture change. These
nut plantations, we know they require water as they're growing, but they need a
lot more water when they mature. And, they need water all the time. That's
tremendous pressure, particularly if we hit a drought year and a climate change
really kicks in, um, which we haven't really planned for in the Murray-Darling,
what are we going to do? What are politicians going to do?
David
Papps, Former Commonwealth Environmental Water Holder: Governments are aware,
ministers are aware of the dilemma they're facing, and the potential
consequences for both the environment and other irrigators in the Basin. This
may well be a time bomb.
Sean
Rubinsztein-Dunlop: These megafarms belong to a company called Webster Limited,
which produces 90 per cent of Australia's walnuts and is part owned by Canadian
pension fund PSP.
Webster Limited is one of many big corporations expanding into the Murrumbidgee
Valley.
It's growing an empire here with the help of millions of dollars in water
infrastructure grants.
Anthony
Kidman, Fmr Murrumbidgee Irrigation Project Manager: Webster's a corporate
company, they've developed a walnut plantations and almond plantations
throughout the area. The key driver, well I believe is that they have sourced
this area out because of its climate and because of its security with water.
Paul
Pierotti, Griffith Business Chamber: Water is the magnet that is bringing
Webster to Griffith. It's you know, Webster owns large parcels and quantities of
water, but it has sold massive, vast volumes of water to the, to the federal
government under the basin plan in northern New South Wales. And what it's done
is use that money to come down here and buy further properties, and more water.
The landscape has changed you know, at a really rapid rate of knots.
Sean
Rubinsztein-Dunlop: Anthony Kidman has watched Webster reshape the landscape
with the help of the taxpayer, since he started doing business with them as a
project manager for the local water supplier, Murrumbidgee Irrigation.
Anthony
Kidman, Fmr Murrumbidgee Irrigation Project Manager: In the last 5 years it's
exploded.
Sean
Rubinsztein-Dunlop: On Webster's prize properties, on the edge of the
Murrumbidgee River, the company is transforming land the size of 40-thousand
rugby fields.
Anthony
Kidman, Fmr Murrumbidgee Irrigation Project Manager: When it was first put into
place it was livestock - sheep and cattle.
Sean
Rubinsztein-Dunlop: Webster is investing in another lucrative crop: cotton.
It's absolutely enormous.
Anthony
Kidman, Fmr Murrumbidgee Irrigation Project Manager: In terms of infrastructure
that's been developed here it's quite massive. Millions and millions of litres
of water and millions and millions of dollars being spent in developing this
land for this type of commodity.
Sean
Rubinsztein-Dunlop: In recent months, Webster has levelled the fields and built
channels.
Along the river, we see a channel leading to a cotton field.
Anthony
Kidman, Fmr Murrumbidgee Irrigation Project Manager: You can see the development
over there, Sean. They are creating a storage of significant size. You could say
upwards of 1000 megs [megalitres].
Sean
Rubinsztein-Dunlop: Next to the cotton field there's a new dam waiting to be
filled. It's been funded by the taxpayer under the water infrastructure scheme.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: That programme was
supposed to reduce the amount of water that was going to irrigation when it's
actually increased the opportunities for irrigation. All subsidised by tax
payers and worse I think Australian tax payers will be really shocked to find
out that that money is actually going to foreign investors as well and that's
just absolutely perverse.
Sean
Rubinsztein-Dunlop: Four Corners can reveal Webster Limited has received more
than $40 million under the water infrastructure scheme to help pay for a $78
million transformation of its properties. Webster's shareholders and Canadian
backers are also banking on the funds for an expansion to the outer reaches of
the Murrumbidgee to trap water that would have flowed into the rest of the
Murray Darling Basin.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: Along that road you just
see dam after dam after dam, these massive on-farm dams. Um, in a place that is
as flat as a table, um, that just should not have dams.
Sean
Rubinsztein-Dunlop: Former Murray Darling Basin Authority Director Maryanne
Slattery is investigating the impact of new dams on the river system.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: The way that valley has
been changed and shaped from this program is just horrifying. It's really hard
to believe, you know, until you do that drive the scale of these on-farm dams.
And then when you realise they're being paid for by the Commonwealth, under a
supposedly environmental program, that's just horrifying.
Sean
Rubinsztein-Dunlop: Near Hay, where the heat soars into the 40s, Webster is
planning to build new dams to hold huge volumes of water that would have
previously flowed past its properties. The water will be used to develop prime
irrigated cotton country. What's the argument for taxpayers funding these
massive new dams to save water?
Prof
Richard Kingsford, Dir. Centre for Ecosystem Science, UNSW: I can't really get
that. Essentially it increases the take from the river system, and ultimately
decreases the amount of water in the river both for, you know, the environmental
systems downstream, but also the people that depend on that water downstream.
That to me is where in fact we may be seeing more water taken out of the rivers
rather than water savings.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: As a taxpayer it's just,
it's absolutely outrageous and indefensible that Commonwealth funds for an
environmental program are being are being used to fund big new dams to take
flows that used to benefit the environment.
Dr
Emma Carmody, Senior Policy and Law Reform Solicitor, Environmental Defender's
Office: The point of the subsidy is to save water and return that to the river
system. It's not to allow the beneficiary to take more water. And in fact, it's
so perverse to my mind, it's almost worse than water theft, because it's the
government and taxpayer money that's being used to sanction this kind of
behaviour.
Sean
Rubinsztein-Dunlop: Despite more than 40 million dollars granted to Webster
Limited, its deals with the Australian Government are confidential. There is no
transparency about how the money's been spent or what effect Webster's huge
irrigation expansion will have on the river system. Webster says it has acted at
all times within the government's guidelines and that the projects have been
independently audited.
Richard
Beasley Sc, Snr Counsel Assisting SA Royal Commission: I'd want to see every
invoice. I'm not suggesting there's anything untoward, but I'd also be wanting
to understand the science of how much water that scheme is saving the
environment. The rules seem pretty slack, particularly in terms of the
scientific justification for it.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: The efficiency program
has become a massive subsidy for large agribusiness. That has facilitated the
increase of irrigation water, um, not a decrease.
Prof
Richard Kingsford, Ecologist, UNSW: I find that astounding. I mean, why are we
building these large dams for private gain at public cost? I mean, how can we be
doing that? And worse, you know we are denying the river of the water that it
needs and it seems to be at complete odds with the Murray-Darling Basin Plan and
the Water Act.
Sean
Rubinsztein-Dunlop: In NSW, the biggest portion of water infrastructure funding
has gone to one monopoly corporation, Murrumbidgee Irrigation, for upgrades to
its huge network of channels and pipes which deliver water to the valley's
farms.
Brett
Jones, CEO Murrumbidgee Irrigation: It's investing in the basin, it's getting
water back for the environment and it's actually also I think upgrading our
infrastructure.
Sean
Rubinsztein-Dunlop: Murrumbidgee Irrigation has never had an opportunity like
this before?
Brett
Jones, CEO Murrumbidgee Irrigation: It's, it's a bit of a unique opportunity,
yes, and the key thing for us is that we, we do have a period of time where we,
we can really set, set this area up for the next 50 years and ensure that the,
the productivity, um, and the, the agricultural production in the area continues
to, to do well.
Sean
Rubinsztein-Dunlop: Murrumbidgee Irrigation is also a major water trader in the
region.
Paul
Pierotti, Griffith Business Chamber: They are a corporation entity, or a
company, but their shareholders are actually the farmers or agriculturalists in
the Murrumbidgee Irrigation area. Instead of them focusing on their customer and
the products that those customers grow, they're focusing on whatever way they
can make money for their own entity to continue to feed and thrive that entity.
And I believe that that entity has grown into a monstrosity due to the massive
influx of government coffers.
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: So you're
moving from a system that's fully automated.
Sean Rubinsztein-Dunlop: Tony Onley is a former Webster manager, now with
Murrumbidgee Irrigation. As its business development coordinator, his job has
been to consult with customers on how to spend the taxpayer's money.
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: This is our
big cotton growing area down here.
Sean
Rubinsztein-Dunlop: Murrumbidgee Irrigation is using the infrastructure
subsidies its received to help improve the water supply on channels like this.
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: Yes we've got
quite a considerable capacity increase.
Sean
Rubinsztein-Dunlop: And so this was through the taxpayer funded program as well.
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: Yes, this was
done under PIIOP.
Sean
Rubinsztein-Dunlop: OK and it allows more water to come through
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: It does.
Sean
Rubinsztein-Dunlop: Despite the aim of saving water, the infrastructure
subsidies are driving up demand from customers like Webster. Do you maintain
your contact with the company?
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: I maintain my
contact with all of the customers I come into contact with.
Sean
Rubinsztein-Dunlop: OK some landholders might say that gives them a competitive
advantage.
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: Well it
doesn't. So they're one of 2,300 customers. They are a very important customer
but we treat all our customers equally.
Sean
Rubinsztein-Dunlop: Is there a conflict of interest?
Tony
Onley, Business Development Co-ordinator, Murrumbidgee Irrigation: That's for
someone else to answer. But from my point of view? Absolutely not.
Brett
Jones, CEO Murrumbidgee Irrigation: The Australian government funds our water
savings initiatives and then we leverage off that in terms of other
opportunities. If we're going into an area to do works, it does make sense to,
to maximise the return on the works that, that you are doing.
Sean
Rubinsztein-Dunlop: Some of your landholders complain that the bigger operators
here are winning the benefits of the tax payer funding, including Webster
Limited.
Brett
Jones, CEO Murrumbidgee Irrigation: Mm-hmm.
Sean
Rubinsztein-Dunlop: How would you respond to that?
Brett
Jones, CEO Murrumbidgee Irrigation: I think that all the works that we're doing
is benefiting all of our customers. Uh, the key aspect of what we do is provide
water to all of our customers, and all of our customers are our shareholders.
And the- the investment in our infrastructure is actually providing a better
level of service for each and- and every customer.
Sean
Rubinsztein-Dunlop: Murrumbidgee Irrigation has used the water infrastructure
funds to help transform the valley. Some customers have done better than others.
On the dry Hay Plains, on the outer reaches of the valley Murrumbidgee
Irrigation has removed an entire district of shareholders from its network of
channels.
Matthew
Ireson, Grazier: The fact that we're being exited from their area of operation
makes you wonder, is it really a water savings project or is it a project where
someone's making a substantial amount of money out of it.
Sean
Rubinsztein-Dunlop: To save water Murrumbidgee Irrigation shut down hundreds of
kilometres of leaky channels. It means the regular water supply these farmers
rely on now comes from a pipeline.
Matthew
Ireson, Grazier: I've had to move all the cattle out of this paddock because I'm
running out of water. As you can see in that dam there, there's turtles and
animals and fish, perishing there now.
Sean
Rubinsztein-Dunlop: Fifth generation grazier Matt Ireson says this new pipeline
supplies far less water than his business was built on.
Matthew
Ireson, Grazier: So this is our future water supply.
Sean
Rubinsztein-Dunlop: Murrumbidgee Irrigation spent 49 million taxpayer dollars on
the project and says billions of litres of water have been saved.
Matt
Ireson, Grazier: The purpose of the scheme is for water savings. We support the
water savings initiative and to save the losses along the channels. Uh, couldn't
agree more, but the process has not been transparent at all, especially for the
taxpayer. They, they've handed over all these millions of dollars for a scheme,
that's supposed to have value for money.
Brett
Jones, CEO Murrumbidgee Irrigation: This is a fundamental project that has, has
changed that landscape from a unsustainable water delivery that, to deliver two
billion litres of water took twelve. And there's now a full pipeline system of
better quality water being delivered 365 days a year.
Sean
Rubinsztein-Dunlop: The project allowed Murrumbidgee Irrigation to sell access
to more water upstream, according to its former engineer, Anthony Kidman, who
ran the project.
Anthony
Kidman, Former Murrumbidgee Irrigation Project Manager: That has given
Murrumbidgee irrigation a great ability or an extended ability to take the water
capacity that was delivered to those customers in the past, and share it or, or
issue it to, to customers upstream. It is the golden opportunity to sell, sell
access to water delivery to some large customers, be it corporate or just large
farmer customers.
Sean
Rubinsztein-Dunlop: Professor Quentin Grafton is the Chair of Water Economics at
UNESCO.
He's
been warning for years that the government has grossly exaggerated the amount of
water returned to the rivers under the water for infrastructure scheme.
It's
less than half of what the government claims. And in the worst case scenarios
we've gone backwards, not forwards. That in fact the amount of water in the
environment has actually in fact declined as a result of these efficiency
subsidies and not gone forward. And that could be backwards by, more than 100
billion litres. We don't know, and we don't know because we need a water audit,
a hydrological audit of what's going on in the basin.
Sean
Rubinsztein-Dunlop: Studies have shown for decades that reducing waste water on
fields, means less seeps back into the rivers.
Prof
Quentin Grafton, UNESCO Chair in Water Economics, ANU: Indeed, the Productivity
Commission identified this as an issue in 2006. You increase the amount of water
consumed on the irrigators' field, which is fine for the irrigator. That's good
for the irrigator. That gives more bang for the irrigators' buck. The downside
is, once you become more efficient at delivering water to your plants, it also
means there's less water going back in terms of seepage into the aquifers and to
the groundwater, and there's much less water going back off in terms of run-off.
Sean
Rubinsztein-Dunlop: Quentin Grafton has called for accurate data on water use
since the scheme was designed, but the irrigation industry and the Government
have tried to discredit his work.
Prof
Quentin Grafton, UNESCO Chair in Water Economics, ANU: They just don't want to
know. It's an inconvenient truth. We knock on the door, we tell them what we've
done, we give then the evidence and we get pushback and the pushback is no
you're wrong. And we say fine tell us where we're wrong. Blank. There's no
response where we're wrong. It's been incredible to say this, that we can spend
$4,000-million to-date and billions more to spend, yet we haven't done those
measurements, those basic measurements to allow us to know what in fact we've
got, net, in terms of the impact for the environment.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: It was very well
understood within the water agencies, certainly at the Commonwealth level, that
there was lots of question marks over the water efficiency program. It was
always talked about with a raised eyebrow and a bit of a snigger that there was
a lot of water that was bought well, well above the going rate. A reasonable
rate, and that the water savings were quite dubious.
Sean
Rubinsztein-Dunlop: When Maryanne Slattery was at the Murray Darling Basin
Authority, she discovered the infrastructure subsidies were funding the
expansion of dams ... and sought data from the department director in charge of
the scheme.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: That director told me
that the Commonwealth didn't have that information and didn't keep that
information. And I was pretty startled by that, because I couldn't believe that,
that you know, a Commonwealth program that was worth billions of dollars would
be administered that way.
Sean
Rubensztein-Dunlop: How surprised were you when you heard that?
Maryanne
Slattery, Senior Water Researcher, Australia Institute: Ah, absolutely
gobsmacked.
Sean
Rubinsztein-Dunlop: MaryAnne Slattery left the Authority in disgust in 2017,
concluding the Murray Darling Basin Plan was a fraud on Australian taxpayers and
the claimed savings from the water infrastructure scheme were grossly
exaggerated.
Maryanne
Slattery, Senior Water Researcher, Australia Institute: Government does not do
any checking of, either at the first point, the estimated saving or at the last
point, the actual saving. So there's no government checking in that process, at
all.
Sean
Rubinsztein-Dunlop: How much confidence do you have in this system?
Maryanne
Slattery, Senior Water Researcher, Australia Institute: None. No confidence at
all.
Prof.
Sarah Wheeler, Water Economist, University of Adelaide: In my opinion, money
spent on irrigation infrastructure programmes is wasted. Four billion dollars of
taxpayer money has been wasted to date. There is a huge opportunity cost of that
money. It could have been spent on buying water directly back and reinvested
within real communities on services and activities that would actually help them
become more healthy and resilient. In my mind, we've wasted $4 billion of
taxpayer money.
Sean
Rubinsztein-Dunlop: This year the South Australian Royal Commission called for
an overhaul of the 13-billion-dollar Murray Darling Basin Plan.
It
described the five-point-six billion dollar water infrastructure scheme as
"a quintessential example of a sorry lack of accountability and
transparency".
Richard
Beasley SC, Snr Counsel Assisting SA Royal Commission: The Commissioner directly
recommended that the whole scheme first of all be stopped, because it probably
doesn't work, and it probably isn't recovering water, and it is a huge expense
to taxpayers but the auditor general should investigate the entire scheme. Who's
been given the money, why and what is the scientific evidence, the scientific
basis in relation to what amount of water is claimed to have been recovered from
individual schemes or from the scheme overall. There's no transparency at all.
Sean
Rubinsztein-Dunlop: The Australian Government blocked the Royal Commission from
questioning Commonwealth employees and then ignored its findings. It was no
surprise to the Australian economists, scientists and former officials ...
who've warned successive governments about the water infrastructure scheme.
Prof
Richard Kingsford, Ecologist, UNSW: The broader Australian public asked,
demanded that governments do something about the rivers of the Murray-Darling,
and essentially what we're seeing happen is that we're degrading the rivers at
the s- same time as we're handing out money to a few individuals to, um, realise
huge economic, um, gains at public cost.
David
Papps, Fmr Commonwealth Environmental Water Holder: At this moment, with the set
of political circumstances facing us, and what I think is a wilful lack of
determination on the part of New South Wales, Victoria, and now South Australia,
aided and abetted by the Commonwealth government, we're not going to see the
Basin Plan properly implemented, we're not going to see the benefits flow to the
environment that was intended way back in 2012. It's going to be a fundamental
failure, and that's $13 billion of taxpayers' money compromised, on the verge of
failure, in my view, without some sort of real commitment from the states and
the Commonwealth to do what they said they would do.
Prof
Quentin Grafton, UNESCO Chair in Water Economics and Transboundary Water
Governance, ANU: The continuous response has been, "Well, just go away. Go
away and just don't even talk about it." Well, I'm sorry, I'm not going
away. This isn't going away, it's not working. We could have taken the same
amount of money, delivered for the environment, helped communities with hundreds
of millions, if not billions of dollars, in terms of various programs, yet we
chose not to do that. We chose to put it into pipes, we chose to put it into
concrete and we chose to deliver private benefits with public money, and that is
a national scandal.
RETURN
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