Truth, lies and water

Policies on the Murray-Darling Basin are costing Australian taxpayers billions, and will leave the country high and dry when the next drought hits, Quentin Grafton writes.

Just as conventional conflicts are fought along battlefronts with troops and weapons, helped along by deception and subterfuge, so too are public policies in relation to the common good, such as energy and water, battles between truth and lies or cons. For many of our biggest policy problems, there is a battle to win ‘hearts and minds’ which is also a war of words, with both sides of the debate using deception and half-truths.

Sadly, Australian water policy and what has been (or rather has not been) delivered over the past decade is one of the greatest policy cons foisted on the country’s public. It’s a con that has seen more than $5 billion in the past 10 years spent on ‘recovering water’ by subsidising irrigators or buying water entitlements from willing sellers, yet for the huge price tag there is very little to show for it. To add insult to injury, some irrigators would have us believe that the Basin Plan is now responsible for all their woes.

Just over 10 years ago, in the throes of Australia’s worst recorded drought, then Prime Minister John Howard promised a National Plan for Water Security that was then to be delivered on by the newly appointed Water Minister, Malcolm Turnbull. This 10-point plan committed to spending $10 billion over 10 years to ‘fix’ the Murray-Darling Basin. At that time, there was a real concern among communities along the lower Murray that they may not have enough drinking water and that the endless ‘blame game’ practised by the states about water flows meant that the issue was going nowhere fast.

The plan was broadly welcomed by Australians keen for a resolution to a seemingly intractable problem of not enough water for communities, farmers and the environment. Thus, despite a change in government that year, the newly-elected Prime Minister Kevin Rudd double-downed on this plan, gave it a new name – ‘Water for the Future’ – and increased its budget by an additional $3 billion. Bipartisan support gave rise to a Water Act that provided the Commonwealth with the powers to act on behalf of the country in terms of how water is governed, in the national interest.

More on this: Australia needs to reinvigorate its stagnant debate on water policy

Fast forward to 2017 and let’s look at what has been achieved. There are those who would have us believe that all is well and that the Basin Plan, enacted in November 2012, is delivering better water outcomes for all. In this happy land of milk and honey and flowing waters, there are even those who claim that what was promised in terms of increased environmental flows back in 2012 is no longer necessary and that the money can be better spent on other things. Some falsely claim that water recovery has led to the loss of thousands of jobs even though the reality is that purchases of water entitlements from willing sellers supported an increased gross domestic product in the Basin region.

The superficial public message is that there must be ‘balance’ in the Basin and that the Basin Plan has forgotten about irrigation communities. These are falsehoods peddled to extract even more billions in taxpayer dollars where the many pay to enrich the few.

The Basin, and its rivers, is not only iconic to Australia, it also serves an essential purpose – not just to the irrigators who depend on it, but also to the communities and the environment that are nourished along its waterways. It’s too important to leave to misdirection, so let’s examine key myths one by one.

First myth: despite the initial promise it would be there, climate change was never included. This is despite the overwhelming evidence that climate change is already here and affecting the Basin. The consequence of this omission is that, whatever reduced diversions are achieved over the 10 years of the Basin Plan, they may already be undermined by higher temperatures and a more variable climate.

Some have suggested that climate change can be built into the next 10-year Basin Plan. But given that irrigator lobbyists were able to prevent climate change being included in any meaningful way in the 2012 Basin Plan, this may be a pipe dream.

Second myth: that the Basin Plan will reduce surface water diversions by 2,750 GL/year on average. In fact, the current Basin Plan increases the permissible extractions of groundwater in the Basin. Reductions in surface water diversions will, in fact, be much less than 2,750 GL/year because of ‘supply measures’ that are claimed to be equivalent to increased water flows and that could lower the planned reductions in diversions to only 2,210 GL/year.

More on this: Is Australia lagging behind in agri- environmental policy?

Importantly, water entitlements acquired to achieve reduced diversions in the Basin Plan were never fully utilised by irrigators so they cannot be fully counted as a reduced diversion. Further, the billions spent on subsidies to increase water use efficiency for on and off-farm irrigation have reduced the proportion of water that flows back into the river, which offsets calculated reductions in water diversions. In sum, despite the fact that the Commonwealth is 70 per cent towards achieving its water recovery goal, there is as yet no discernible change in Basin surface water diversions.

Where will this lead us when the next major drought arrives? We will be up the creek without a paddle, but it will also be a dry riverbed.

Third myth: that multibillion dollar subsidies to improve water efficiency have worked. In fact, average water application rates per hectare in 2014-15 are almost the same as they were in 2002-03. Yet, irrigators have, on average per person, received close to $400,000 over this period from the sale of their water entitlements and government subsidies to improve water use efficiency.

Fourth myth: that all is well with the environment in the Basin. While some iconic sites have been watered in a tiny proportion of the Basin, and greater stream flows due to rain have helped the general health of riverine environments compared to the worst years of the drought, the single most important measure of average flows at the Murray Mouth is not sufficient in the Basin Plan, as argued by the CSIRO in an independent scientific review in 2011. Indeed, dredging resumed this January to keep the Murray Mouth open, and we are not even in a drought. Most importantly, funding for an independent audit of the river health of the Basin has been discontinued while the National Water Commission responsible for auditing water governance performance was closed in 2014.

Millions of Australians live in cities outside of the Basin, so does this matter to them? Yes, it means a great deal. In the time of big budget deficits, we can no longer afford to have billions of taxpayer dollars washed down the drain and not be told the truth. History tells us that the next big drought is coming. It’s high time we paid attention to what is happening and what we are being told. We must actually fix what is broken rather than pretend all is well.

Quentin Grafton is Editor-in-Chief of Policy Forum.net and the Director of the Centre for Water, Economics, Environment and Policy at the ANU Crawford School of Public Policy. His new research on water reform and planning in the Murray-Darling Basin is published in Water Economics and Policy.