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Governments in no rush to buy Cubbie Station -

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Governments in no rush to buy Cubbie Station

Nicole Butler reported this story on Monday, August 17, 2009 12:26:00

ELEANOR HALL: One of Australia's largest irrigation properties is up for sale. But state and
federal governments are not rushing to make a bid. The massive Queensland cotton property Cubbie
Station has long been attacked by farmers in New South Wales, Victoria and South Australia for
taking too much water out of the Murray-Darling system.

The Federal Government has a water buyback policy in place but today it is noncommittal about
Cubbie and its huge water entitlement. The Queensland Government says it simply can't afford the
cotton colossus.

In Brisbane, Nicole Butler reports.

NICOLE BUTLER: Farmers says the $450 million price tag for Cubbie Station is over the top.But rural
real estate agent Simon Southwell says it's a tremendous property that has to be seen to be

SIMON SOUTHWELL: I don't know what it will bring. There could be international interest. I mean you
know there is a huge push worldwide for places that can produce food and fibre. If somebody wanted
to put their hand up you know to get hold of Cubbie Station, they would certainly have one of the
most magnificent enterprises in the Southern Hemisphere.

NICOLE BUTLER: The cotton farm colossus takes up around 93,000 hectares of prime agricultural land
near St George in southwest Queensland. It also sits on the upper reaches of the mighty
Murray-Darling river system with a water storage capacity equal to Sydney Harbour.

But Cubbie hasn't escaped the impact of years of drought, debts have mounted and that's prompted
the sale. Mr Southwell isn't handling it but he's optimistic the property will still fetch a very
good price.

SIMON SOUTHWELL: Quality always sells and quality will always command a good price. You know people
that buy these things, they are in there for the long term.

NICOLE BUTLER: Over the years Conservationists have attacked Cubbie - arguing its massive water
entitlement contributes to the poor state of the downstream Murray-Darling system. Now its land and
water are up for sale - they're calling on state and federal governments to purchase the property.

The Rudd Government wants to buy back water across the Murray-Darling Basin - and it's already
started doing that.

But the Cubbie Group's executive director John Grabbe says so far the Government hasn't shown much
interest in buying Cubbie's water.

JOHN GRABBE: We did, just for the record, in the last eight months we have tendered water to the
Commonwealth, to their buyback process, most recently at the end of June, we tendered what would
deliver the system on average 70 billion litres a year. Now we've had no response in regard to

NICOLE BUTLER: Water and Climate Change Minister Penny Wong won't say if the Federal Government
will bid for the property.

PENNY WONG: As a government we are open to considering offers from willing sellers of water
entitlement. We'll consider that based on value for money and environmental need but I've
consistently not commented on any specific purchases that might or might not be considered.

NICOLE BUTLER: Senator Wong says several issues need to be sorted out.

PENNY WONG: As I understand it, the land and water entitlement for Cubbie are not separated so that
would create some problems in terms of purchasing water from Cubbie until those two entitlements
are, in fact, separated.

NICOLE BUTLER: South Australia's independent Senator Nick Xenophon doesn't support the Federal
Government buying Cubbie Station. He says the only solution is a complete federal takeover of the
Murray-Darling river system.

NICK XENOPHON: The risk is, based on the advice I've had from independent water experts, is that if
the water from Cubbie is purchased, it will simply increase the value of water licences in the
Upper Darling, which means that the Federal Government would have to buy water twice in effect and
it won't mean anything for the lower reaches of the Murray.

NICOLE BUTLER: Liberal Senator Bill Heffernan says Cubbie's water licences aren't worth the
property's hefty price tag.

BILL HEFFERNAN: It actually has a water licence for about 70 gigs. It has a storage for 500-odd
gigs but it doesn't have licences to suit the storage because it stores overland flow when the
floods come and that has completely destroyed, but they've been allowed to do it, the largest
floodplain in Australia.

NICOLE BUTLER: At the state level, Queensland's Bligh Government isn't rushing to buy one of
Queensland's largest irrigation properties either. Natural Resources Minister Stephen Robertson
worked on a possible sale of Cubbie six years ago. He says today's price tag of $450 million is too
rich for Queensland.

STEPHEN ROBERTSON: Given that since the last time we gave consideration to that, the price on this
property has more than doubled. That is way beyond the capacity of any state government to give
serious consideration to buying that property and retiring the water entitlements for the benefit
of the environment.

Even if the state was to give some consideration to this, none of the benefits of buying Cubbie
accrue to Queensland. All the water ends up in New South Wales benefitting local environmental
areas such as the Narran Wetlands.

NICOLE BUTLER: Mr Robertson says the Commonwealth should purchase the controversial property.

STEPHEN ROBERTSON: Oh look, I think realistically, they're the only level of government that have
the financial resources to give consideration to it and given, as I said, that the environmental
benefit doesn't accrue to Queensland but it accrues to New South Wales and the Murray-Darling Basin
generally, I think other governments both federal and perhaps New South Wales governments are
better placed than Queensland to give consideration to it.

NICOLE BUTLER: Tender for Cubbie Station will close next month.

ELEANOR HALL: Nicole Butler reporting.