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(Cairns... Far North Queensland)

 

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THE MURRAY-DARLING BASIN

A NATIONAL SCANDAL

Cash Splash - ABC 4 Corners

 Thursday 11 July 2019

INDEX

 

     Murray-Darling Basin Royal Commission slams authority for 'maladministration'

     Taxpayer dollars, secretive deals and the lucrative business of water.  

     "It's a national scandal." Water Economist, Professor Quentin Grafton

 

Home  *  Contact  *  INDEX  *  Current Issues  *  Priority Issues  *  Reference Index  *  Selwyn's Profile  *  Your Comments

 

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.

 

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