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Tuesday, 10 February 2009
Page: 674

Senator XENOPHON (7:32 PM) —The unprecedented and complex nature of this crisis only exacerbates the dilemma. I believe there is only one factor that has made finding the way forward much harder, and that is politics. In politics, as in life, there is no monopoly on common sense or good ideas, but too often in politics we see a clash of personalities rather than a contest of ideas. If as a nation we commit to spending this enormous amount of money, we must accept that it will be left to future generations to pay it off, and if as a nation we commit to spending this enormous amount of money it will be left to future governments of different political persuasions to pay it off. It is for this reason that I must express my great disappointment over the way this issue has been handled by the government and the opposition. When preparing for the biggest peacetime stimulus package in our nation’s history, I believe it is incumbent upon the government to work in a nonpartisan way, not to dictate a solution. This government’s inflexibility and artificial deadlines have forced this national crisis to become unnecessarily political. At a time when the nation actually needed the two major parties to be seeking unity and answers, the opposition’s approach may have set the headlines, but it also set up a stalemate. The two major parties were so convinced they were right that they ended up doing the wrong thing by us all. Surely this week of all weeks, we must be able to see that in times of genuine national crisis it is better to work together and not to use politics to drive us further apart.

Do I support the package? My biggest concern about the package has been not simply what we are spending but also what we are buying. I do know that targeted infrastructure spending will serve generations to come, which is important because, if future generations are going to pay off this debt, the deal we do now must benefit them too. When faced with complex global crises and equally complex economic responses as we deal with this response package, it is important to be clear about what we know, what we do not know and what we cannot know. I believe this is an important point to make even if I risk sounding a little like Donald Rumsfeld.

The one thing I do know is that for generations the plight of the Murray-Darling Basin has been ignored. This crisis directly affects Queensland, New South Wales, the ACT, Victoria and South Australia. Arguably, this is the most important infrastructure system in the country with the basin holding approximately 40 per cent of the nation’s farmland and producing over 50 per cent of its food. That is to say nothing of its extraordinary environmental value, yet it has been neglected and abused almost to the point of no return. Another thing we know is that we have just experienced almost two decades of unprecedented economic growth. Our economy has expanded, our national and personal wealth have risen and deficit budgets have become a thing of memory—until now. Did we spend this money to prepare for bad times? We all know the answer to that.

While I concede a time of economic decline may not be the easiest time to fight for environmental and social bottom lines, I believe we have no choice. Labor or Liberal governments could have acted on these things in the boom years, but they did not. Instead, they ran the river into recession and river communities into deficit. While past governments piled up taxes and piled out the handouts, they also piled on the environmental debt. As the government talks short-term deficits to be redressed by future surpluses, there are no surpluses on the horizon for the Murray-Darling Basin. The river is dying. The Lower Lakes are taking their last gasp. River communities are on the brink. Within weeks, even good rains, if they ever come, will be too late for some along the river. That is why we must act now. I point to work by Professor Quentin Grafton of the Australian National University who has argued that spending on infrastructure in the Murray-Darling Basin would result in significant productivity, infrastructure and environmental returns.

That is why I believe it is important to consider a practical four-point plan. Step 1: there is currently $3.1 billion allocated for water buyback under the government’s previously announced Restoring the Balance in the Murray-Darling Basin program. Water experts such as Professor Mike Young, one of Australia’s leading water economists, from the University of Adelaide, believe this money should be spent as a matter of urgency. This would facilitate a rapid buyback process of between three and six months rather than the years that are projected now. It would allow irrigators to sell their water swiftly and inject cash into their local economies. It would also allow unviable irrigators to leave their land with dignity immediately by selling their water to the federal government to gain a small, but important, premium. This will provide not only a rapid flow of funds but also greater environmental flows. This would help every remaining irrigator right along the Murray-Darling Basin become more viable, and it would help the environment. None of this is new money.

Step 2: there are also a number of water infrastructure projects that are funded, approved and ready to go. What is needed is for the federal government to turn the wheels of bureaucracy much faster. Already $5.8 billion has been budgeted over 10 years as part of the Commonwealth’s water plan, but $2 billion of this can be easily brought forward. This $2 billion is for shovel-ready projects that will see on-farm water savings right along the basin. This money can also fund bioremediation in the Lower Lakes and stressed wetlands throughout the basin, which will provide significant immediate stimulation to rural economies as well as doing the right thing by the environment. This also is not new money.

Step 3: there is currently $250 million in federal funding allocated to the piloting of stormwater projects through the National Water Security Plan for Towns and Cities. Stormwater harvesting can significantly reduce urban dependency on the river system at a fraction of the cost of other measures, such as desalination plants. In my state of South Australia, the water we could reclaim, water that we let out to sea each year, could help wean Adelaide off the Murray. That is why I believe this stormwater funding should be brought forward as a matter of urgency. Again, this is money to be brought forward, not new money.

Step 4 involves new money: the $3.1 billion water buybacks will require up to $2 billion of new money to help regional communities to adjust to the changes that will result. This money will allow for once-in-a-generation transitional spending, helping rural economies to cope with a reduction in farming in their area. Madam Acting Deputy President, when you consider that 1.3 million people live in the basin, you must acknowledge its productive capacity and the precarious nature of our permanent plantings, because once they are gone they are gone and there will be no recovery for those communities and for their citrus trees, their almond trees, their stone fruit trees and their vineyards. Once all that has gone there is no point of recovery. Once those permanent plantings die, that is it. That is why it is important that we consider the economic impact and the social impact in dealing with this crisis now, rather than letting communities die the death of a thousand cuts, to actually give them some real hope and some real economic and environmental benefits. People are going to need money to start new businesses. Others will need money to relocate. This money will provide jobs as communities restructure and rebuild their towns. This money could also involve the expansion of the current $150,000 exit packages to properties of currently up to 15 hectares whose owners sell all their water. While I do commend the Rudd government for changing those exit packages last year to ensure that people do not actually have to leave their homes, I note that 15 hectares is simply too low for people to consider it. It should be on a much larger basis. Rural economies, though helped by the cash injection of the water buybacks, will still need further assistance to adjust, and this is what up to $2 billion will provide.

What underpins this four-point plan is a simple premise: the less water we waste in the basin system, the more viable the basin becomes both economically and environmentally. I point out findings from the work that has been done just in one part of the river system. An economic impact analysis that PKF Australia, a consulting firm, did not so long ago estimated that there could be up to 10,000 jobs lost in the Riverland region if we do not act, if we do not do things differently, if we do not provide that level of assistance. That would be equivalent to an unemployment rate of 30-plus per cent—a Great Depression level—in the Riverland alone. That would be replicated in regions throughout the Murray-Darling Basin unless we act now, unless we use the money that has already been allocated but not spent, to stimulate communities to give them real hope and a real chance of survival.

This plan will be good for rural economies and therefore will be good for rural communities. That leads me to the fundamental question: will the overall package do what it is meant to do? After all, this is meant to be a stimulus package in terms of economic viability. It is meant to protect jobs. For days, like my fellow senators, I have listened to the experts and the economists, and the truth is they are uncertain, which means ultimately none of us can really know. And there is no point being political about this. In essence, to my mind, it comes down to this. If you find yourself in a sinking ship, do you grab a bucket and start bailing out water, even though it is going to be hard work and the plan might not work, or do you sit back and say, ‘We’re going to sink anyway, so I’ll do nothing’? This is the dilemma that faces the Senate. The plan might succeed; it might fail. Future generations will pay for the decisions we all make this week, which means future generations will judge us on the decisions we all make this week. My only hope is that, whatever we decide, future generations in the Murray-Darling Basin will judge us kindly. I support the second reading of this legislation, but I reserve my position on the third reading.