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Tuesday, 19 June 2012
Page: 7098


Dr STONE (Murray) (16:07): The Monash University's Centre of Policy Studies has just released a report that I have found so extraordinary that I have to make reference to it. The study claims that it is in fact a waste of money to invest in infrastructure upgrades which set about to save irrigation water, which can then be supplied to, for example, the environment to improve sustainability, particularly in the Murray-Darling Basin. The study is quite extraordinary because what it argues is that, on a pure cost-benefit analysis—and it is their analysis—the Commonwealth pays around $2,000 per megalitre to take irrigators' water; however, if it were to invest in infrastructure, the upgrade costs could be between $5,000 and $10,000 per megalitre.

That is the most extraordinarily crude economics. If you look at the multiplier impact of a megalitre of water, you know that you are creating jobs, that you are growing food and sustaining a food manufacturing industry, a transport sector and over 52 towns and two cities in my electorate alone. However, this report claims that, during the drought, dairy farmers became dryland farmers and still had their cows milked. In fact, those same dairy farmers mostly feedlotted their cattle and bought in feed, which either put them hugely into debt or eroded their equity in their properties, in order to maintain production. As soon as the drought was over, they reverted as fast as they could to having irrigated agriculture. So to suggest that the drought had no impact and that continuing to buy irrigators' water has no impact on productivity is, as I say, the crudest of economics and quite extraordinary coming, as it is supposed to, from a university centre of, they would claim, some status.

The report also suggests that, instead of investing in irrigation infrastructure upgrades, funds should be diverted to services such as health, education and aged care in the basin communities. The point is that you do not have basin communities if you do not have production off your farm properties. If you close down irrigated agriculture and your communities have to move away, you will have no need for health, education and aged care services because you will lose your population. Those who are left become welfare dependent and, quite frankly, do not have much call particularly for education services. I find this report quite extraordinary. It is quite irresponsible, with its crude assessments. Quite clearly, whoever produced this report needs to get out more. They need to come to some of the irrigated agricultural areas, look at the productivity, look at the multiplier impacts or effects of the production of food and fibre and also look at the export earnings from that agricultural endeavour. To suggest that the best way to go is to invest in health and education rather than in irrigation infrastructure is to forget the fact that you do not have populations to service if you do not have a viable economy.