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Thursday, 13 May 1965

Senator HENTY (Tasmania) (Minister for Civil Aviation) . - I move -

That the Bill be now read a second time.

This Bill has for its purpose the obtaining of the approval of Parliament to an agreement between the Commonwealth and Western Australia for the provision of financial assistance to the State to accelerate extensions to the comprehensive water supply scheme in the south-west of the

State. The Commonwealth Government's decision in this matter was announced in the last Budget speech by the Treasurer (Mr. Harold Holt) when he said that the Commonwealth would provide advances to the State, up to a maximum of £5,250,000, on a £1 for £1 basis with the State's expenditure on the scheme. He also indicated that the Commonwealth's contributions would not begin until the financial year 1965-66.

The comprehensive water scheme was originally planned, in 1946, to extend over 12 million acres, but was subsequently restricted to 4 million acres. The Commonwealth Government of the day agreed to assist the modified scheme, and for this purpose the sum of £5 million was provided of a £1 for £1 basis with the State under the Western Australia Grant (Water Supply) Act 1948-1957. The modified scheme was completed in 1961-62.

The Government of Western Australia sought further financial assistance in 1963 to accelerate desirable extensions to the Scheme, which the State had been financing from its own resources since termination of the Commonwealth assistance. The proposed extensions consist of additional pipelines and pumping equipment to supply water to towns and farms in two main areas amounting to 3.7 million acres in the southwest. One area consists of 2.3 million acres between Dalwallinu and Quairading and will be fed from the Mundaring Weir. The other, which will draw its water from the Wellington Dam, consists of 1.4 million acres extending for about forty miles east of Narrogin. In addition to these two areas, there are several small areas in the north which will also be supplied. The purpose of the Scheme is to provide water for stock and domestic purposes only and not f0 irrigation.

The area covered by the proposed extensions of the Scheme lies wholly within the sheep raising and cereal growing districts of the State, the principal commodities produced being wool and cereal grains. It was represented to the Commonwealth that this area of the State has considerable potential for increased production, by virtue of its natural fertility. Unfortunately, however, attainment of (his potential has been restricted by the inadequate natural water supply for stock. This stems from several factors such as the lightness of the summer rainfall, the extreme variability of annual rainfall, the paucity of underground water supplies and the difficulties in ensuring adequate surface water storage. The State claimed that the water available on most farms was only just sufficient for the sheep already being carried and that reticulation of water to the farms would lead to a substantial increase in stocking rates and would encourage substantial pasture improvement.

The proposed extensions were the subject of an economic appraisal by the Bureau of Agricultural Economics. The Bureau's survey showed that, on certain reasonable assumptions about such things as the response of farmers to the reticulated water, the areas sown to pasture, the likely increase in carrying capacity and the levels of prices and costs, the extensions to the Scheme would be fully economic and would result in significant additional production of an export-earning nature.

Against this background the Government decided to agree to the State's request for Commonwealth financial assistance to enable the project to be completed in a shorter period than the State would otherwise have found possible. The terms on which the assistance is to be provided are set out in the Agreement. The assistance will be on an interest-bearing loan basis, and will be payable to the State, subject to an upper limit of £5,250,000, to the extent of one-half of expenditure by the State on the project during the period of eight years commencing on 1st July next. Payments so made will be repaid by the State over a period of fifteen years commencing ten years after the payments are made by the Commonwealth. No repayments by the State will thus be required until after completion of the project.

The areas to be supplied with water are referred to in the First Schedule to the Agreement and are fully shown in the map attached to the document described in the Schedule. The particular works in respect of which financial assistance is to be provided are listed in the Second Schedule, and are also fully described in the same document. There is provision in the Agreement for variation of the works to the extent that the State may propose and the Commonwealth approves. The Agreement also contains the usual provisions included in other comparable agreements relating to such matters as the efficient execution of the works, the payment to the State of working advances, the supply of information by the State and the auditing of expenditure.

The Government is satisfied that the measure before the Senate will make a significant contribution to the development of an important pastoral and grain-growing region of Western Australia and will lead to a substantial increase in export earnings. 1 have pleasure in commending the Bill to the Senate.

Debate (on motion by Senator Cant) adjourned.

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