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Tuesday, 2 June 1970

Mr FAIRBAIRN (Farrer) - As one who was associated with the earlier assessment of this project I am delighted to have the opportunity of congratulating the Government on its decision and to support that decision. The honourable member for Dawson (Dr Patterson) said that he had great faith in water conservation. I also have great faith in it. It is extraordinary that water, although most inert in its natural form, immediately becomes a very fiery topic the moment you start putting it into a dam. Our nation seems to be split into 2 widely divergent groups. There are those people who say that Australia is the driest continent in the world and that therefore we cannot afford to allow one drop of water to run out to sea. On the other hand there are those who say that all irrigation is uneconomic; that there is only one thing worse than allowing water to run into the sea and that is to store it in uneconomic dams.

Obviously, between these 2 extremes, which are poles apart, there is opportunity for ordinary mortals to determine where they stand. I find myself standing perhaps not as far out as someone like Sir William Hudson who advocates water storage to the greatest possible extent: but nevertheless I support him, the honourable member for Dawson and the others who advocate, increasingly, conservation of water. On the other end of the scale we have people like Dr Davidson and our colleague, the honourable member for Bradfield (Mr Turner) who walked out earlier, who I think believes that under no circumstances should any dam be built. However, perhaps I am doing the honourable member an injustice. It may be all very well to go ahead with projects such as the Eastern Suburbs Railway and the Opera House, but some people say: 'For heaven's sake, do not build something that is going to be of great advantage to the nation because it will develop remote areas and produce more exportable surpluses'. This seems to me to be the view that some honourable members take.

I have had the opportunity of being responsible in the Commonwealth sphere for Australia's water development for some. 5 years or more and I am proud of what has been achieved in that time. This latest decision will go even further towards showing that the Commonwealth is anxious to do the most that it can in this feld. lt is all very well for an economist sitting in an ivory tower to question the wisdom of a decision like this and to say: 'Do not build a dam because you might grow a bit more sugar and you may have difficulty in getting rid of it', lt is quite, a different matter for politicians because we do not sit in ivory towers. We have to deal with people and we have to make decisions. It is no good telling a cane grower at Bundaberg that it does not matter that he cannot achieve his full mill peak this year because someone else in northern Queensland will be able to lake up the amount that he does not produce. This does not do the chap at Bundaberg much good. It does not do the people of the city of Bundaberg much good after a disastrous season to be told that we can produce somewhere else. Therefore this project is what I would call a risk operation.

Bundaberg, one of the largest areas of coastal northern Queensland, suffers from drought. It is very prone to drought, lt is subject to wide variability in seasons. Because of this farmers in the area have attempted to irrigate from underground water supplies. As more and more people are doing this we find that the supply is likely to fail. Even in spite of a relatively good fall of rain recently I understand that the water levels have dropped dangerously. As the water level drops the salinity is likely to increase. As the water level near the sea drops naturally sea water flows in underground and the salinity level increases. We cannot just sit back and say: 'Bad luck old chap. We fed details of this project into a computer and found that the cost benefit analysis is not. as good as it should be. You have had it. Someone else can grow more sugar cane elsewhere.' ft is very easy to say these sorts of things but let us face up to the fact that Bundaberg is a very highly developed community. If these people had to move off their farms, as they would eventually if nothing were done to improve their water facilities, then it would mean moving a large number of farmers and resettling them elsewhere. In the long run the cost probably would be far greater than the cost of providing them with additional water, as is proposed in this legislation.

The Queensland Government - and after all, the States are responsible for the development of the water resources within their boundaries - has shown its faith in this project. The project is now the Queensland Government's No. 1 priority because it will increase the security and efficiency of the farmers in this area. The Queensland Government, out of quite meagre resources, has made available an amount of $8. 3m for weirs in this area. That shows that the Queensland Government is backing its faith and judgment by expenditure - expenditure which it can ill afford because Queensland, although it has probably the greatest water resources in Australia, has only a relatively small annual amount, over and above its annual maintenance costs for irrigation projects, to develop now projects such as this.

In the Bundaberg area sugar represents about 90% of the gross value of the. products of the district. In fact about 16% of Queensland's total sugar production comes from that area. One does not know what the future holds in respect of world markets for sugar. I think it is not unreasonable to predict that there will be some increase in world sales over a period of years. But it is certainly true to say that there is a gradual increase of sales in Australia and this is based mainly on the increase in population.

Much has been said about systems of cost benefit analyses. We have had quite a long talk tonight from the honourable member for Dawson about these cost benefit analyses. I am a little bit afraid that we tend to make cost benefit analysis a new type of god. Figures are fed into a computer, something comes out the other end and if it is I or belter we say: 'Righto, go ahead' and if it is less we say: 'Sorry, we cannot proceed'. Things are not as easy as that. I have had experience of looking at cost benefit analyses. 1 know the difficulties. Just take sugar as an example. How can we make an accurate analysis of whether it is economic to develop a new area or stabilise an existing area when over a period of about 4 to 5 years the price of sugar on the world market has fluctuated between £Stg 105 and £Stgl3? These are the sorts of problems that we run up against in every aspect of primary production.

Goodness knows, wool has been much more stable over a period, 1 suppose, than any other commodity. Yet, as I have said before, the fluctuations of prices on my own place have varied over a 7-year period from a wool cheque of £2,400 up to a wool cheque of £51,000. Today it is down to $20,000. Had a cost benefit analysis been carried out, which figure would one have accepted? Of course, if I had carried out a cost benefit analysis before I went on to my property I would have worked it out and based it on wool production. However, because wool production has become less economic I, as so many other people have done, have swung away from this product. Today I find that only about one-third of the gross returns on my property come from wool. So had I carried out a cost benefit analysis on the cost of production of wool I would have found that today I was getting an income from something completely different. This applies to every form of primary production. A person can do his best to decide what he thinks he will grow, but the farmer, of course, knows better. If there is a sudden improvement in the price of one commodity and a drop in the price of another, he will make a switch. It does not matter who decides whether it is economic or not - the farmer is the one who makes the final decision. Therefore, let us not get carried away with cost benefit analyses.

One thing 1 could not understand in the speech given by the honourable member for Dawson was when he talked about the recent decision in this House on whether we should have the Dartmouth Dam or the Chowilla Dam. He said that members did not receive a cost benefit analysis and that the Parliament had to make its decision without being told what the benefits were. 1 cannot understand this because there were circulated to all honourable members cost analyses of the cost of finalising the Chowilla Dam, which was about $57m, and the cost of building Dartmouth which was almost exactly the same - $57m. So, there was a cost analysis. On the benefit side we told everyone quite clearly that by building Dartmouth we would get about 5 times as much water as we would get by building a dam at Chowilla. Surely this gives the wherewithal for a cost benefit analysis because after all, the water goes into the same river and is used for producing the same crops. So, I just could not understand what the honourable member was saying. Surely the benefits can be assessed.

The honourable member for Dawson wants the technical evaluation to be made available. There is quite a bit to be said for making a technical evaluation available but we always come up against the problem of: Do we make available confidential figures on which government decisions are based? If we started doing that we would get a resistance on the part of technical officers and departmental officers to make available full details, knowing that the figures were to be subjected to scrutiny. Immediately someone would say: *Oh, but this is not right. There ought to be something added on or taken off*. This matter would proceed to debate on something which was technical information made to the Minister himself and on which the Minister and the Government must make their decision. Therefore, I think we should hesitate before we call for reports of every sort by technical and departmental officers. This has always been the approach of governments, not only this Government but previous governments.

The honourable member also mentioned the ad hoc approach. 1 do not know what has happened in this case but I do know that in the original decision - when we made our decision on the national water resources development programme - we asked the various States to give the Commonwealth their lists of projects. Some of them gave their projects in an order of priorities, as they saw them, but the States did give a list of various projects. 1 do not remember how many there were, but I think the number was between 25 or 30. The Commonwealth then proceeded tq try to assess the benefits compared with the costs of those projects. We made a list and selected the top half dozen or so for a very much closer look. Then we made our final selection of those which fitted w thin the $50m project. As a matter of fact, the amount went over $50m - we finished up at about S55m. But, certainly there was no ad hoc approach on this occasion. We selected those projects which we believed would give the greatest benefit.

The reason the Kolan scheme as such was not accepted was firstly because it was not stated by Queensland to be its No. 1 priority, although that did not necessarily mean that we would not have selected another one; but a lot of the work which has now been done on this project was not then done. In actual fact, the present scheme is a different scheme from the one which was then put up and costed in this cost benefit analysis.

I just want to say briefly that I believe there are enormous benefits to be obtained from irrigation. Like the honourable member for Dawson, I am sorry that the honourable member for Bradfield is not in the chamber because he is a person who seems to see no benefit at all. But let us look at what we are getting out of irrigation. In Victoria, for example, 3% of the area which is devoted to agriculture is irrigated and it is responsible for 20% of the entire agricultural production of Victoria. Let us consider the Mumimbidgee Irrigation Area. As the honourable member for Riverina (Mr Grassby) knows, this area produces annually crops that have a gross value of over $30m. Until recently this production was based on only one relatively small dam. the Burrinjuck Dam. In Queensland less than 1% of its producing areas - just over \% actually - is irrigated, but production from irrigation areas contributes over 1 1 % of the estimated gross value of Queensland's primary production. In the Namoi Valley is the Keepit Dam which we are told is an expensive dam. So it was expensive. It was built in fits and starts by the Labor Party when it was in office and it was much more expensive than it need have been. I am sorry to introduce this political note into the debate. The annual production on the Namoi is of the order of $4.7m and this would be sufficient to pay for the Keepit Dam in about 8 years. From that time on the production would be showing a profit.

The same sort of thing is true of the Ord River scheme. The honourable member for Bradfield suggests that the Ord project is a white elephant and that a dam should not have been built there. How many people stop to think that although the diversion dam cost about SI 8m of Commonwealth and Stale money - and it is, of course, fairly expensive when compared with the cost of the main dam - at present the small number of farmers there are producing about $2. 2m worth of goods annually and these are either import replacement goods or are goods earning export income for Australia. These farmers are not in full production yet. Within about 8 years production from that area would be sufficient to pay for the capital that was expended by the State and Commonwealth governments in developing the Ord project. Of course, as time passes other crops, such as sorghum, will emerge, and there also will be beef production. There are vast resources in the Ord area.

The honourable member for Dawson spoke about the yield of various dams. lt is interesting to note that the main dam being built on the Ord al a cost of S20m will have a yield of over 1 million acre feet per annum. The Chowilla Dam, about which there has been so much dispute in South Australia, would have cost 3 times as much as the Ord Dam and would have had a yield of about 200.000 acre feet per annum. If 15% of Australia's water resources is harnessed in the Ord - more than everything that comes out of the Snowy Mountains scheme - I cannot believe that we will not in time be able to produce there soundly and economically the various products that we require. We must realise that we will require them. I see my friend from Wakefield (Mr Kelly) smiling, but let us consider beef production, for example, lt is all very well to say that we are dependent on export markets for our beef production, but we consume about two-thirds of what we produce and export the remaining one-third. These are rough figures, of course. If our population is going to increase from 12 million today to between 25 million and 28 million at the end of the century surely we must increase our beef production considerably even to cater for home consumption quite apart from the increased exports which the world will probably need by then. Let us not talk of the Ord being a white elephant. Of course it has ils problems. I do not know of any primary producing area in the world that sooner or later does not have some problems, because there are problems caused by overproduction and by restrictions imposed by the European Common Market, by the United Slates of America and other countries.

All I can say is that I am proud of the contribution that the Government has made over the years to water conservation, lt will be 6 years next week since 1 became Minister for National Development and during the lime that I and my successor have handled that portfolio the Commonwealth Government has done an enormous amount to increase the conservation of water. When all the works now under construction are completed there will be about 7 times more water stored for irrigation in Australia than there was 20 years ago. We have set up the accelerated measurement programme of surface and underground waters under the Water Resources Council. We have instituted the national water resources development programme wilh its initial $50m programme, and now it has a $100m programme for the next 5 years. We have found money for the Ord River project, for the Blowering Dam. for the Snowy Mountains scheme, for flood mitigation works in northern New South

Wales, for hydro-electric schemes in Tasmania and for the Western Australian Comprehensive Water Scheme. We have retained sections of the Snowy Mountains Hydro-electric Authority to assist in developing projects throughout Australia, throughout South East Asia and in other parts of the world. We have introduced water scholarships. I think we can be proud of the development that has occurred.

The proposed grant will be a section 96 grant to Queensland, the State with the greatest water resources in Australia. I do not want to enter into the argument - because it would be a long one - as to whether we should give section 96 grants or whether we should give the States greater tax reimbursements and enable them to make their own decisions as to where additional money should be spent, but when we give section 96 grants T believe that it is urgently necessary to exercise supervision to ensure that Commonwealth money is correctly spent, I do not believe that in respect of water conservation there has been any undue interference by the Commonwealth. Wc have had the best of relations with the Queensland Government. Our water authorities, through, the Department of National Development and the Snowy Mountains Hydro-electric Authority, have worked closely with Queensland authorities on the Fairbairn Dam and I am sure they will continue to do so in this instance. I support the Government's decision. T am afraid that I cannot support the amendment moved by the Opposition because I have grave reservations about making available secret and confidential reports from the Government's advisers. I believe we should look very closely at the proposal because it could lead a lot further than anyone realises.

Sitting suspended from S.58 to 8 p.m.

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