Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 2 June 1970

Dr PATTERSON (Dawson) - This Bill is concerned with the development of water conservation in the Bundaberg district. It is the first project to be financed under what is called the new national water resources development programme. Under this new development programme $100m will be made available over the next 5 years for water conservation projects which are approved by the Commonwealth. Previous to this there was the first or the old national water resources development programme in which $50m was allocated for a period of years. This Bill is concerned with the provision of a grant of up to $12. 8m for the construction of conservation works in the Kolan-Burnett district. In 1967 proposals were submitted by Queensland for irrigation development to serve the Kolan-Burnett area on the northern side of the Burnett River. The Kolan-Burnett scheme was allegedly analysed by the Commonwealth when the so-called short l:st of priorities was being determined under the old national water resources development programme, and apparently it was rejected.

The question which I have asked in this Parliament many times is: Why was it rejected? I have never yet received any satisfactory answer, except that perhaps it was not in a progressive form sufficiently advanced for the Commonwealth to give a priority rating to it. But perhaps the correct reason was that it was not recognised as the No. 1 priority of the Queensland Government at that particular time. At that time the Nogoa River project had first priority. In March 1969 new proposals were submitted for the irrigation project to cover the Bundaberg cane growing areas served principally by the 3 mills of Fairymead, Bingera and Gin Gin, or the Wallaville mill. This proposal was in essence a refinement of the original wider scheme. In 1969 the Queensland Government provided S8.3m for this project which consisted principally of the tidal barrages on the Kolan and the Burnett Rivers, pumping stations and reticulation works to send water from the barrages to areas adjacent to the coast where there have been serious problems with water conservation, particularly with underground water supplies

After the State government had announced that it would go ahead with the project because of the desperate situation regarding water conservation in the Bundaberg region, the Commonwealth Government announced that it would provide a figure of up to $12.8m in the form of a grant principally for the construction of the Monduran Dam on the Kolan River and a channel to convey the water from the Kolan River to the Burnett River which would pass close to Gin Gin. This would allow the sugar cane area north of the Burnett River to receive reticulated water supplies and also would allow for recharging of the aquifers which were being depleted by the constant drawing of water for irrigation. The $12.8m will go towards the cost of the Monduran Dam, the pumping station and the inter-river connecting channels. A storage capacity will be provided for the Dam of approximately 475,000 acre feet with an annual supply and a safe draw of 175,000 acre feet.

Water conservation is one of the perennial problems aired in this Parliament. Some people believe that no funds should be made available for irrigation or water conservation. They have opposed practically every water conservation scheme that has been put up by this Parliament. An irrigation programme such as the Bundaberg scheme can be justified by its 2 broad objectives, firstly, to stabilise or to maintain the existing production, and secondly, to expand production. There are two basic types of irrigation development projects. The first, such as the Ord River and Nogoa River schemes, is located in a non-developed area or an unproven area. The second type, like the Bundaberg scheme, is located in a proven or established area where there is an infrastructure such as towns, port facilities and railways and where very large losses of production occur because of rainfall or moisture deficiency. We are not talking today about the economics of a scheme such as the Ord River or the Nogoa River scheme. We are talking about an area which is proven and which has been established for over 100 years. Here tremendous losses occur simply because the seasons consistently fail. I shall detail the extent of those losses later. lt is significant that in this case no benefit-cost analysis has been made available to the Parliament. I shall move an amendment in the second reading stage that the benefit-cost analysis or technical evaluation should be made available to the Parliament in support of projects such as this, lt is most difficult to argue on the technical analysis simply on the cost side when one cannot see the benefit side. If one does see the benefits one realises that they cannot be measured because all the assumptions that underlie the data put forward by the Government are not available. This applies not only to the Bundaberg scheme. 1 have said before that this Parliament should have available for debate the technical reports on which these decisions are taken. We had a complete benefit-cost analysis justifying the beef roads scheme, but that was withdrawn from the Parliament. Other such reports should have been available concerning the Ord River project, the Nogoa River project, the money spent on coal ports, loans made for port facilities in connection with the bauxite development, and the present scheme.

Several weeks ago we had a great discussion here on the Dartmouth and Chowilla Dams. We argued as to which was the better of the two. Not one word was spoken about the value of benefits. Only the costs were dealt with. The whole basis of that discussion was: Which would be the best scheme, from the point of v ew of the minimum cost criteria, to provide so much water? No benefit-cost analysis was provided. The Bill before the House seeks to provide SI 2.8m for irrigation. To debate the scheme intelligently we should have access to quantitative analyses which are available. When we were debating the Dartmouth Dam versus the Chowilla Dam issue 1 argued that we should have access to the computer analyses which were made for both Dartmouth and Chowilla. They will be made available to me. but there are still no benefit-cost analyses available to the Parliament for this project.

The Prime Minister (Mr Gorton) and the Leader of the Opposition (Mr Whitlam) have been talking about setting up parliamentary committees. Perhaps if we did have such committees they might go into such details as public investment a little more thoroughly. The problem does not lie only with primary industry. Some honourable members opposite are very critical of irrigation projects. 1 can see no difference in principle between a subsidy for a particular project and a tariff. No Bills go through this House more quickly than do Customs Tariff Bills and yet the amount of money involved in them is frequently tremendous. We should know a little bit more about them. I support the Bundaberg scheme. I. supported the Ord River scheme and the Nogoa scheme.

Mr Turner - Still unashamedly?

Dr PATTERSON - Yes. I have great faith in water conservation. I should be glad if the honourable member for Bradfield (Mr Turner) could tell me of one major irrigation scheme in Australia or, for that matter, in the world, which is a failure-

Mr Turner - The Ord is one. lt is a white elephant.

Dr PATTERSON - Or which has failed after operating for a period of 15 or 20 years. The basic problem is that there is not enough water. I would like to know of one such scheme. The honourable member for Bradfield mentions the Ord River project. That project has nol even been fully constructed yet. Let it be completed. The same arguments were put forward by the Liberal Party wilh respect to the Snowy Mountains scheme. The same argument was put forward often with respect to the Mumimbidgee irrigation area and the Hume reservoir. Look at the areas served by these projects now. Can anybody say that the areas around Renmark, Griffith, Leeton and Mildura are broke and do not have thriving economies.

Mr Kevin Cairns (LILLEY, QUEENSLAND) - The honourable member is getting excited.

Dr PATTERSON - lt is the honourable member for Bradfield who is getting excited. He can have his say on this project in a minute. Let us look at the project. I mentioned before the 2 types of projects. The honourable member for Bradfield is leaving the chamber. I wish he would stay here. The project in this area is important because of the losses the area has suffered. lt is quite a different proposition from the evaluation made on the Ord and the Nogoa. The losses alone, which can bc evaluated on facts, are considerable. They can bc calculated by going along to the sugar mills and finding out the losses in mill peaks in every drought year. In the last 35 years thi value of the losses of the Gin Gin and

Bingera mills alone have been estimated at $90m. If one took into account the cumulative losses of the Fairymead, Qunaba, Millaquin and Isis mills one would find that the direct loss in the Bundaberg district, an established area, from the lack of water alone is not much less than $200m over that 35 year period for which records are available. This is the point which I hope that the honourable member for Wakefield (Mr Kelly) will take some notice of, because he has been one of the most critical members in the House - he is a member of the Liberal Party - of irrigation in Australia.

We are dealing with a proven area where the losses are real. They can be evaluated and measured. The cumulative costs of the losses in the Bundaberg district justify tho construction of the head works and the reticulation system without taking into account any need for expansion, which after all has usually been the basis for irrigation in Australia. This is a type of project which I have always said should have the highest priority in irrigation works. Priority should be given to proven and established areas because the infrastructure and the economy are there. Because of one factor, the variability of rainfall, there are violent fluctuations in the level of production. In the 1964-65 drought the shortfalls of mill peaks at Bingera and Gin Gin were 22% and 45%. The total value of the losses of those 2 mills in that year was $19m. If water had been available $19m would have been saved, taking into account the extra cost for reticulation, interest, pumping and so forth. These 2 mills alone over the past 35 years had an official loss of something like $90m. But if we take the cumulative figure for the 6 sugar mills in the area - and the records are there for everyone to see - the loss would be about $200m over that period.

On top of that loss, of course, are the indirect costs of drought. We are talking of only the direct losses which have been occasioned by drought. If we take into account indirect losses such as loss of wages and the loss of the spending power of the cane cutter, mill worker or farmer, and apply the multiplier theory, the loss for the Bundaberg area is a very large one. I can see no reason why the Government cannot make available a technical evaluation of this project. The project should have top priority based on the losses I have outlined without taking into account expanded production that will occur later on. The 2 objectives are underground water replenishment and the provision of reticulated water. We have to deal with the question o! priorities in this House. It is high time that the Government's ad hoc approach to water conservation was overhauled and reviewed.

What is the method involved? The method involved is that the Commonwealth invites the States to put up proposals. As we are dealing with Queensland, let me mention some of the proposals that have been put up in recent years. I refer to the extension of the Mareeba-Dimbula area. We have the giant Burdekin basin, which encompasses the Burdekin River project at the falls, the Broken River, Urannah and Eungella. Then we come south to the Fitzroy Basin, the Nogoa and the giant Dawson scheme. We have further south on the Burnett the present Bundaberg scheme and the Border rivers scheme, which has been cited in the House and which the honourable member for Maranoa (Mr Corbett), who is now in the Chair, has referred to often in this House. These are types of proposals that are put up.

When the previous Minister for National Development was in office I repeatedly tried to get from him the reason why the Nogoa was the No. 1 priority for Queensland. Anybody versed in cost benefit analysis would know that the present Bundaberg scheme is superior economically to the Nogoa scheme. I supported the Nogoa scheme just as I supported the Ord Scheme because it was the only project being considered. We had to either support it or oppose it. There were no alternatives. It is not good enough to accept the proposition that because the Queensland Government or any other State government says a project is its No. 1 priority we should therefore consider only that project. I accept that the Queensland Government can develop with its own funds any project that it likes, but where Commonwealth funds are involved surely the correct approach is to consider a number of alternative projects and to apply the accepted principles of marginal analysis or cost benefit analysis to the evaluation of them. A decision could then be made on the economics of the projects or, if a government wants to, it can bring politics into it.

But wc should at least have alternatives on which to make those decisions.

The Bundaberg irrigation project should have been built years ago because of the staggering losses alone which have been occasioned to this nation in terms of national income and export income, lt is just not good' enough for a State Government to say: This is the No. 1 priority and this is the only project to consider as was the case with the Nogoa scheme. The Ord River project in Western Australia was considered not as an alternative to any other scheme in Western Australia, Queensland or any other area, but was considered in isolation. I supported it and will continue to support it. I have always said in this Parliament that the correct procedure from the Commonwealth viewpoint was to consider a number of alternatives. This applies not only to water conservation but to other projects so that the best use can be made of the Federal funds. We could consider water conservation as against some other priority projects. This Parliament should be utilising the resources of this nation in the best possible way. If it has money: to spend it should spend it so that it will give the greatest return to the nation in terms of export income.

What will be the next water project? As we are talking about the project in Queensland, we find that the Queensland Government has rated the Urannah project as its No. 1 project now. I refer to the Broken River project. Here we return to the same argument as before. How did the Queensland Government make the Urannah project its No. 1 priority now? Or did it make its first priority the Nogoa project, its second priority the Bundaberg project and its third priority the Urannah project? How did it make this decision? This is what we want to know. Surely if any State government puts a No. 1 priority on a project it has carried out alternative or comparative economic analyses. But this has not been done in Queensland. I submit to the Minister for National Development (Mr Swartz) that we put an end to this ad hoc approach. I suggest that we look at what is happening.

I am talking now about the Urannah scheme which is part of the Burdekin River. We should consider the entire Burdekin basin because a large number of proposals have been made concerning it. There is the giant Burdekin project which is based on the falls. Then there is the Broken River project in conjunction with the Eungella. Then there is the diversion of the Herbert River into the Burdekin River itself. All of these are important projects. But when one asks the Government any questions about them, one can gel no answers. What this Parliament must know is the evaluation of the entire Burdekin basin, taking into account the various proposals put up by the State Government but. al the same time, providing that any money that is to be spent will be spent on the best possible project from the point of view of the Commonwealth.

How does a State determine its No. 1 priority without economic analyses? Such a decision is affected by politics, policies and the likes and dislikes of individuals, lt is not. based on economic analyses: therefore, it can be based only on something that is quantitative or a judgment. I find it difficult - perhaps the Minister for National Development will reply to me on this point - to understand why the Federal Government has not honoured its promise to Queensland to carry out a reappraisal of the Burdekin River project. This is just one more of the promises that have been made and have not been honoured by the Commonwealth, lt is all right to say that it is under consideration or that some basic homework is being done behind the scenes. This is not the way to carry out an evaluation study.

Some 2 years ago, as the honourable member for Farrer (Mr Fairbairn) well knows, the then Premier of Queensland, the late Mr Pizzey, announced that the Commonwealth Government had commenced an evaluation of the Burdekin project early in 1969. This announcement was reinforced by repeated statements made by the present Premier of Queensland, Mr Bjelke-Petersen. Since that time, all sorts of excuses have been advanced as to why that evaluation has not proceeded. One thing that concerns me is the false information that is being bandied around in Queensland about the cost of the Burdekin Dam. It has been stated consistently that the capital cost of the Burdekin Dam will be $300m or $400m. The truth of the matter is that it will cost at the most approximately S70m and will be one of the cheapest dams in terms of acre feet of assured yield. Either in total capacity or in the safe draw it will be one of the cheapest dams in Australia. I will quote some of the figures available in a minute to substantiate that claim.

The huge catchment area of this Burdekin project relative to the excellent major dam site allows for low cost construction. What I am trying to show here is that it is no good just accepting that one project has No. 1 priority without comparative analyses. Let us have a look at the whole of this basin to see which of the projects in fact is the best proposition from the point of view of the expenditure of Commonwealth funds. The relationship of the Burdekin Dam to the large areas commandable from Bowen to Townsville provides outstanding opportunities for a multi-purpose city power-water supply and drought mitigation project. One of the great sins of the Burdekin River project is that, although its national importance was recognised by a Commonwealth Labor government 20 years ago and this was backed by the Queensland Labor Government, nothing has been done since then.

The best estimates available show that the construction cost of a completed Burdekin Dam at the falls site would be approximately $26 per acre foot of assured yield pei annum. That is assured yield per annum as distinct from capacity. The comparable figures for other schemes show that the cost of the Fairbairn Dam was $150 par acre foot for the safe draw - we are getting up into a pretty high figure bracket - while the cost of the Eungella project was $70 an acre foot and the cost of tha proposed Urannah scheme is $130 per acre foot. That is the capital cost of the dam divided by the assured annual supply as distinct from the total capacity. As an example, I mention that the Ord River project had a capacity of just under 5 million acre feet but has a safe draw in excess of 1 million acre feet per annum. The safe draw comparison is really, I would submit, the on':y correct measurement that we can look at. It is what can actually be obtained each year that counts lt is no use building a great wall to impound water if no water will be available.

Mr Kelly - Would you include the Chowilla project? Would it be in that category?

Dr PATTERSON - No. In terms of the cost of gross storage per acre foot, the Burdekin is an outstanding proposition. The point that I am making is that, before the Government proceeds after this project with what is then the No. 1 priority in Queensland - that today is the Urannah project, which I support, if it is the only project - it should look at the alternatives available in the Burdekin basin. We should look at the Burdekin Dam falls. We should consider the Burdekin River project in conjunction with the Urannah. We should consider also the diversion of the Herbert River into the Burdekin for flood mitigation purposes. Let us look at these projects and let the Commonwealth spend it! money, if it wants to spend it, on the best project. Honourable members may ask what the Burdekin Dam project is for. One of the principal beneficiaries of this project will be the city of Townsville. It is a growing city-

Mr Kelly - Does the honourable member mean Bundaberg?

Dr PATTERSON - No. The Burnett River project is concerned with Bundaberg. I am speaking about the next priority after Bundaberg. Townsville is the most important city in north Queensland. I had better not say that it is the most important city in northern Australia because my friends in Darwin probably would reject that statement. Nevertheless, it is the most important city in northern Queeensland in terms of population, but not necessarily from a qualitative point of view because there are other cities which are very important too, such as my own city of Mackay as well as the Home Hill and Burdekin areas themselves. Nevertheless, from the point of view of Townsville, the development of the Burdekin River is f fundamental in the same way as Dartmouth and Chowilla were to South Australia. The point which does not please me very much is that decisions are being made without any technical evaluation of the cost and benefits of those decisions.

Mr Adermann - The honourable member would not give the Burdekin River first priority just because it is in the electorate of Dawson, would he?

Dr PATTERSON - No, 1 am not saying that. What 1 am saying is that before a decision is made about the next priority - this is in the Burdekin in my own area at Urannah - the question to be answered is this, based purely on economic analysis-

Mr Swartz - This is a family argument.

Dr PATTERSON - Yes. What should be done is that (he Government should look at the alternatives in the Burdekin River basin in the same way as the alternatives in the Fitzroy basin should have been considered. This area is represented by the honourable member for Capricornia (Dr Everingham). Before the Nogoa was decided upon, the Government should have looked also al the Dawson in the Theodore area. The opinion of many is that this was a superior economic scheme. But the po'nt is this: The Opposition supported the Nogoa scheme, lt supports to the full this project because, as I have said before, on the information that we have the Burnett scheme is the best irrigation development project based on economic analyses that has been proposed in Queensland for a long tine. I cannot compare it with the MareebaDimbulah scheme because I have not the figures. But. certainly from the point of view of the Commonwealth, what 1 have said about the Burnett scheme is true. The other point that 1 have made is that in this Parliament we must have more information to debate these matters intelligently. The right honourable member for Fisher (Mr Adermann) asked me whether I would rate the Burdeken project as No. I priority. The Labor Party certainly 20 years ago rated the Burdekin basin project as the No. 2 priority in Australia, behind the great Snowy Mountains scheme. In fact legislation was passed by the State Government for the setting up of the Burdekin River Valley Authority and if ii had not been for the fall of the Labor Government :n 1949 the

Burdekin River project would now have been completed.

In summing up my remarks on the Bundaberg scheme, there is only one important point which should he considered by those who. if they run true 10 form, will no doubt criticise irrigation. 1 am sorry that the honourable member for Bradfield is not here because the point I wanted to impress upon him was that all of the arguments which he has put in the past in this Parliament have been concerned with new areas such as the Ord River scheme and the question marks about cotton and about sorghum marketing. Similar queries were passed about the Nogoa River scheme. When dealing with the Bundaberg scheme we are nol speaking of expanded production or a new area. The project is simply to provide water for an area which is dependent for its whole economic viability upon the provision of consistently safe water supplies. Experience has shown over the last 50 years, and particularly over the last 35 years for which the records are available, that the Bundaberg district is one area in Australia which desperately needs water.

If water can be supplied at a reasonable cost per acre foot, then taking into account losses incurred in past years, superficially one can say, even without having technical information available, that this is an excellent project. Anybody associated with the sugar industry in the Burnett area knows full well of the tragedies of sugar farmers over the years, particularly in the Wallaville and Gin Gin areas where men in some years have not received one cent by way of income because sugar crops - one of the toughest crops of all - have failed to produce sufficient on some farms to harvest a stick. These tragedies have occurred despite the the fact that the soils in terms of cane growing are good soils and that the farms are in close proximity to export ports and railways. The infrastructure is there but he 1 missing link is water. 1 will be very interested to hear any arguments put forward against this proposal. The only thing I. have against this scheme, and it is not an argument, is thai in terms of priorities we should be considering this project with other projects, but at the moment this is the only scheme under consideration. In terms of an economic viability we know that given an assured water supply each year the mill peaks will be reached. Under this scheme the 3 mills directly concerned are located at Gin Gin, Fairymead and Bingera. The fact that the mill peaks would be consistently reached each year is sufficient justification for the construction of the headworks, the reticulation and the pumping system for this project. ] said earlier in my remarks that I would refer to some figures to substantiate my claims of the losses suffered by farmers in these areas. These are official figures taken out after a study of rainfall patterns in these areas, after obtaining the quantitative figures from the sugar mills, taking the shortfalls due to drought and then multiplying them by the value of sugar at that time. In 1964 and 1965 the regional shortfalls in the Bundaberg district were 22% and 45% of mill peaks. That was the loss in production caused by insufficient moisture. That loss was valued at $19m. It can be argued, at least superficially, that those lasses alone would justify the construction of the headworks.

The years 1964 and 1965 represented the first occurrence of 2 consecutive years of below average rainfall since 1952. Since 1900 there have been 10 periods of two or more successive years in the Bundaberg district of below average rainfall and five periods of more than 2 years, and one period of 5 successive years. Should Bundaberg ever again have even 3 consecutive years of this type of devastation caused by poor rainfall the whole district would be financially bankrupt. Nol only would the sugar farmers suffer: Bundaberg, being dependent on a monoculture, would suffer in terms of the district as a whole. The business houses, the workforce and every person in the district, would be placed in a very serious financial position. One may argue that although there has consistently been a below average rainfall for a period of 35 years in that area this is not likely to occur again. I suppose such an argument could be put forward but what sort of an argument is it? From a scientific point of view one must take some notice of the available records. Surely the correct way to judge the economics of a particular project in terms of potential justification is to make a study of the records over the last 50 years and work out on a graph the correlation coefficients to predict with some degree of probability what the future holds. In other words, we have to argue that there will be droughts in this area as there have been in the last 50 years, but let us hope that future droughts will not be as severe as those which have occurred in the past. This small project will not slop all the devastation in sugar cane losses, in beef cattle production and in other indirect costs which will be associated with a major drought.

The average shortfalls for Bingera and Gin Gin mills for a 35 year period give an annual average value of approximately SI. 3m for 66 years. This would give a total of S90m. Those figures were arrived at based on the best available scientific estimates of the losses occasioned in this district. There has been a direct loss of S90m. As 1 have already said, if one applies a normal multiplier coefficient of between 2 and 3 the figure reached is between SI 80m and 5270m as the direct and the indirect loss. The Bundaberg project is one which can be justified. When discussing this matter we are nol talking about expansion. Those associated with the sugar industry are aware that under the International Sugar Agreement, which is working satisfactorily, supply is being overtaken by demand. But it will be only a matter of several more years before there will be another expansion in this field. Expansion is controlled. If more industries in Australia look lime out to study the efficiency of the sugar industry in terms of controlled production a lot of them would not be in the position they are in today. The sugar industry, in terms of production anyhow is ranked as the most efficient in Australia. The only occasion when there has been a serious breakdown in overseas prices was after the political repercussions when Cuba fell out with the United States of Amenca lt has taken some time to get over this marketing problem but Cuba has now come to the party under the International Sugar Agreement and the Agreement is new working satisfactorily. It will be only a matter of 5 or 6 years before serious consideration is given to another expansion. That is another reason why a project such as this will bc of tremendous importance

Before concluding I want to move an amendment I will circulate it later. The essence of the amendment is that the Commonwealth technical evaluation of this project, including any benefit cost analysis made, should he available to the Parliament. We cannot argue sensibly about this project, or any o her project, unless this type of information is available. I have asked for it before but we have not obtained it.

Suggest corrections