IRRIGATORS have warned that the federal government is spending $5.8 billion on rural water infrastructure which will secure only a small volume of water for the environment but not deliver value for money.
The National Irrigators Council said the fact that it was costing up to $9000 a megalitre to recover water through the infrastructure projects could lead to a multi-billion dollar cost blowout in the government’s $9 billion Murray-Darling Basin reforms.
Environment and Water Minister Tony Burke is attempting to win support from state governments for his long-term plan for sustainable water use in the nation’s largest river system, which he has promised to table in Parliament this year.
He said in Parliament recently that the infrastructure program, which is the most expensive component of the water reforms, would “contribute at least 600 gigalitres towards the recovery of the proposed 2750 gigalitres”.
The rest of the water for the environment would come mainly from buybacks, costing about $3.2 billion.
National Irrigators Council chief executive officer Tom Chesson said taxpayers were being ripped off if the government secured just 600 gigalitres in return for its $5.8 billion investment in rural water infrastructure projects.
“That works out at around $9000 per megalitre. They should be doing a lot better than that. It just doesn’t sound right to me,” he told The Australian Financial Review.
“Where has all the money gone?”
Mr Chesson said that at this price it would be very expensive if the government increased the water recovery target from the proposed 2750 gigalitres to 3200 gigalitres, as the South Australian government is demanding.
Legislation now before Parliament says future increases in the water recovery target must be achieved through infrastructure upgrades, rather than water buy-backs.
Irrigators have long called for the government to preference infrastructure upgrades over buy-backs, arguing that this helps them do more with less water, rather than removing water from agricultural production.
But Mr Chesson said the funds had clearly not been used well. He said upgrades to farm irrigation systems recovered water at a much lower price.
Green groups and the Productivity Commission have argued that upgrades to pipelines and irrigation systems are a much more expensive way to recover water than buy-backs.
The Australian Conservation Foundation healthy rivers campaigner Jonathan La Nauze said if the government had spent more of the available funds on buy-backs, it would have already secured the future of the rivers and have billions left to provide support to regional communities.
“As it is, the existing program will recover a seriously inadequate volume of water and Minister Burke will have to go cap in hand to Treasury asking for more money,” he said.
The $5.8 billion sustainable rural water use and infrastructure program includes $400 million for on-farm projects, $650 million in grants to irrigation operators, $400 million to reduce evaporation in Menindee Lakes in NSW and funds for other state-run schemes. Through its water buy-backs since 2008, the government has paid between $700 and $2000 a megalitre, depending on the source of the water, the state of the market and the reliability of the licence.
At September 30 the government had secured 1577 gigalitres for the environment, including 1107 gigalitres in buy-backs, 316 gigalitres from infrastructure upgrades and 154 gigalitres from state governments.
Mr Burke is negotiating the final details of the basin plan with the states more than five years after the former government committed to overhauling water use in the river system.
The SA government has demanded more water for the environment but NSW and Victoria fear the impact on their irrigation communities and Queensland argues it should not need to contribute water for environmental sites downstream.
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