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Thursday, 4 April 1968

Mr SPEAKER -Is the motion seconded?

Mr Luchetti - I second the motion.

Dr PATTERSON - The question before the House is one which I consider to be of great importance. I refer to the systematic development at an accelerated rate of Australia's water resources in those areas in which development is feasible to supply not only primary and secondary industries but also the needs of towns and cities. It is a fact that often it takes a tragedy to prove a point or to silence some of the most vocal critics. The serious tragedy of the current drought in southern Australia has in fact silenced many of those people who have been only too keen in the past to sabotage actions or ideas designed to achieve an accelerated rate of water conservation in Australia. Of course, there are still some people in Australia who, for reasons known only to themselves, are opposed to water conservation for agriculture, for stock water or in general. I have, in mind men such as the Minister for the Navy (Mr Kelly), who has made damaging statements in recent months outside this House about large scale water conservation. But fortunately for Australia the views of the Minister for the Navy on water conservation are rarely taken seriously.

Water is a resource that is one of Australia's most precious assets. It is becoming more precious as time moves on, and time will show that water conservation in this nation, the driest continent in the world and the continent most susceptible to devastating and ravaging droughts, should and must be given a higher priority rating than it has now. I submit it should have a priority rating almost equal to that of defence. I do not know of any area of national development that has been neglected more by Federal governments than water conservation has. Water should be harnessed for power, irrigation, stock water, flood mitigation, industry and domestic use in the major cities of this continent. There is no plan at all: just an ad hoc unco-ordinated sequence of actions. Every decision taken by this Government with respect to water conservation has been forced upon it either as a result of political adversity or political opportunism. I will not spend the time of the House going through the Government's decisions, but let me just mention the original Ord River project. This involved a $10m grant to Western Australia. It was a political handout without the slightest semblance of any economic analysis to back the judgment. Has any economic evaluation been made of the Chowilla Dam? The answer is no. Was any economic evaluation made of the Blowering Dam? The answer again is no. No economic evaluation by the Federal Government was made of flood mitigation in NSW. Intensive economic evaluations were made of stage 2 of the Ord River scheme and the Nogoa Dam, but it took 2 to 3 years after these economic evaluations were made before a decision was taken. The decision on the Ord should have been taken at least 2 or 3 years earlier and the decision on the Nogoa should have been taken at least 18 months earlier, ls this the way to develop the water resources of Australia? These are ad hoc uncoordinated actions motivated entirely by political considerations and the whims of political fortunes.

Let me deal briefly with the Snowy Mountains Authority. I treat with some contempt the frequent sniping of the honourable member for Eden-Monaro (Mr Munro) at the Labor Prime Minister, Mr Chifley, with respect to the initial organising problems of the Snowy Mountains Authority and the difficulties encountered by the Authority in its earlier years. I am sure that men such as Sir William Hudson share my views of the cheap attempt to belittle the organisation of the Authority in those difficult years. Let the honourable member for Eden-Monaro realise that his Party, the Liberal Party, bitterly opposed the proposal to establish the Snowy Mountains Authority. If it were not for the courageous attitude and the decision of the Labor Prime Minister, Mr Chifley, who was also the Treasurer, there would be no Snowy Mountains Authority today and there would be no Snowy Mountains scheme. 1 shudder to think of what would happen to many areas in the drought torn parts of southern Australia now and in the future if the impounded waters in the Snowy Mountains area did not exist.

We are today witnessing a tragedy unparalleled in the history of the development of this nation, a tragedy that this young nation cannot afford, and that is the deliberate destruction of that once proud and world famous organisation, the Snowy Mountains Authority. The honourable member for Eden-Monaro tries to justify this Government's action - an action condemned not only throughout Australia but also by responsible professional organisations throughout the world. I hope the honourable member for Eden-Monaro was listening to the debate on the 'Voyager' findings. Perhaps he might reflect on the sincere motivations of the honourable members for La Trobe (Mr Jess), Warringah (Mr St John), Bradfield (Mr Turner) and Swan (Mr Cleaver). These honourable members saw a wrong being perpetrated and spoke out. They will earn the respect of their constituents as well as that of the people of Australia. The attitude of the honourable member for Eden-Monaro in publicly endorsing this Government's policy of deliberate destruction of the Snowy Mountains Authority has not gone unnoticed by the people of Cooma.

I had a faint hope that when the new Prime Minister (Mr Gorton) came to office with a fanfare of promises and the possibility of courageous action, the Snowy Mountains Authority as a national authority would be saved. Let me quote what the Prime Minister elect of Australia, when he appeared on television with the honourable member for Eden-Monaro on 7th January said:

There is a great future for the Snowy Mountains Authority. There is a great need for increased and more competent technical skills to be available directly to the Commonwealth Government.

He also said:

I am not prepared to say any more at the present stage.

The honourable member for Eden-Monaro said:

Senator Gorton'sunequivocal assurance given in the living rooms of so many people immediately before an election comes as concrete proof of his intentions - the great future of the Snowy Mountains Authority.

What hyprocisy. The action taken in the last 2 weeks shows how unreliable and lacking in credibility are the statements of the Prime Minister in regard to the Snowy Mountains Authority. The result now is wholesale retrenchment and dismissal of the men in that great organisation. Can we blame the men of the Authority, the people of Cooma and the people of Australia for their undisguised contempt of this Government and its unforgivable policy of deliberate destruction of this Authority.

Does the Government really believe it can fool the people? Does it believe that because a few technical officers are retained and left behind to carry out investigation and design work when asked to do so by someone, the Authority will be an effective force in the field of national development? I submit that no self-respecting professional engineer would allow his reputation to suffer by becoming associated with such a negative and innocuous organisation which had no power, no charter and no effective say in construction work. The destruction of the Snowy Mountains Authority by the Government at a time when this continent is crying out for an accelerated rate of water conservation to minimise the effects of recurring drought in areas where water is available such as the Murray-Darling, the Burnett-Kolan, the Dawson, the Pioneer, the Burdekin and the Herbert, and other areas in the Northern Territory and Western Australia, is a blot on the history of development of this nation. It is a victory for the Treasury and the Treasurer (Mr McMahon): it is a memorial to weak Ministers. While this travesty of justice is perpetrated, millions of acre feet of water flow wastefully to the sea through the very areas which are highly devastated by crippling droughts.

The frequent parrot-like statement of the Government that water conservation is the responsibility of the States shows the Government in its true light. The States simply have not the resources to undertake major development projects. This will never be so unless the States are guaranteed a satisfactory Budget each year by the Commonwealth for the planning and construction of fully co-ordinated water conservation projects. The ad hoc, stop-go, policies cf the States are not in the best interests of national development. This is accepted by the States. Even if the States were given adequate finance, what guarantee has the Federal Government that the projects would be designed to maximise export income which, with development, is one of the criteria laid down specifically by the Federal Government? What guarantee has the Federal Government that the States will construct projects of national priority? Further, 1 believe that the Commonwealth must have an interest in the framing of priorities because all major irrigation schemes in Australia may - I say 'may' deliberately - need financial support at some time in the future, either temporarily or permanently, for nobody can forecast the terms of trade in primary industry. The responsibility for this falls on the Commonwealth, not on the States.

In the interests of Australian development, so that funds will be allocated to water conservation projects in the States in the most efficient manner, I submit that instead of having six States and the Northern Territory competing for funds or for Federal handouts, there should be one Federal authority whose principal purpose, in co-operation with the States and with Federal agencies such as the Commonwealth Scientific and Industrial Research Organisation, the Bureau of Agricultural Economics, the Bureau of Mineral Resources and the Northern Territory Administration, should be to investigate the soundness of various projects and to determine relative priorities so that that authority could advise the Government on the economic efficiency of proposed projects. Could this Government, even after almost 20 years in office, tell me or anyone else which is the most attractive water conservation project in Australia in terms of economic efficiency or in terms of any other criteria that the Government likes to lay down? Can this Administration say which will give the best return in the future - the Ord River project, the Nogoa scheme, the

Blowering scheme, the development of the Dawson Valley, the Burdekin proposals, the Murray-Darling plans or the schemes for areas in the Northern Territory adjacent to the Adelaide River and the Daly River? Does the Government know which offers the best prospects? The answer, of course, is no. Surely this Government should be able to give some indication of priorities after all this time. However, any attempt to plan or to formulate long term arrangements for development is viewed with the utmost suspicion by the Treasury because it may commit the Government for funds in the future. Surely the essence of good government with respect to the disbursement of public funds is to have in advance some idea of the relative priorities of various projects so that public funds may be disbursed in the best possible way.

An integral part of the functioning of a national conservation authority would be the utilisation of benefit cost analysis. On several occasions, I have heard members of this House talking about the technique of benefit cost analysis and the need for its introduction. I suggest with respect, Mr Speaker, that those who ask for the adoption of this technique and those who put forward ideas about the benefit cost calculus should first understand what this technique is and particularly its pitfalls and limitations as well as its advantages. For example, a crucial parameter in the use of benefit cost analysis is the particular rate of interest that is adopted. Just by choosing a particular rate of interest, one can completely alter the soundness of any conclusions. Let me give a concrete example. In an evaluation of the Ord River project that I made in 1965, I demonstrated that at a rate of interest of 5%, discounting changes in the annual stream flows and their effect on benefits and costs over the assumed life of the project, the benefit cost ratio was 1.5. At an interest rate of 4%, it increased to 1.8. But at a zero rate of interest - in other words, on the basis of interest free loans - the benefit cost ratio dramatically increased to 5.7, which is a highly economic figure. This is one parameter only in relation to which one has to exercise extreme caution. The use of benefit cost analysis and its associated measurements, however, is the only known satisfactory technique that can be used to provide a comparison of priorities as between projects.

The projects compared should be like projects. I stress this point. It is unwise and wrong to compare benefit cost ratios for beef roads with those for water conservation projects or public utilities. I admit that I have used these techniques which may not be correct in a strict analysis. I have been guilty of using benefit cost techniques to establish the economic justification for particular projects, such as the brigalow and beef roads in isolation. This is really a rate of return analysis rather than a benefit cost analysis. I submit that in relation to water conservation the best use of benefit costs analysis is not to determine unequivocally the soundness of a particular project but to provide a guide for a government as to the relative efficiencies of projects, whatever criteria may be used.

The establishment of a national authority to plan and implement large scale water conservation programmes does not mean that the authority would be widely engaged in actual construction. Let us make that very clear, because it has been said in this House that such an authority would be directly involved in construction. Its nucleus of construction engineers would be concerned principally with the implementation and supervision of programmes laid down by the Commonwealth Government in coordination with the States but carried out primarily and directly by contracts, as is the present Snowy Mountains Hydro-electric Scheme. The principal role of the Federal authority in this field would be to tackle the regional development of favourable areas where multi-purpose projects for power and irrigation - and flood mitigation - are the key to a region's development. From the standpoint of large scale, long term development, based on principles of development similar to those of the Snowy Mountains complex, the greatest scope for the employment of Federal funds by a Federal authority fully co-ordinated with State and other Federal agencies is in the Burdekin-Fitzroy basin of Queensland and the contiguous areas of the valleys of the Herbert, Pioneer and Burnett rivers. It is not an exaggeration to say - there is plenty of evidence to prove it - that this region, with its huge reserves of water, undeveloped soils and minerals, particularly black coal, is potentially the richest region in the Commonwealth. The catchment area of the

Burdekin-Fitzroy system is 20% greater than the entire area of Victoria. Its runoff is equivalent to 75% or 80% of that of the whole Murray-Darling complex. It hai the great advantage of an existing infrastructure of towns, railways and ports. However, because of the frequency of droughts, it has experienced greater cumulative - I emphasise the word 'cumulative' - losses of income than has any other region in Australia. It is the area where the greatest scope for intensive beef cattle production lies. Despite its undeveloped nature, there are more beef cattle within the area bounded by a half circle within a radius of 150 miles from Rockhampton than there are in the whole of the Northern Territory and Western Australia. Production of beef there is between three and four times as great.

The Burdekin-Fitzroy region has the resources for the establishment of secondary, industry. Water will bring industry and people. Power will bring industry and people. . The shortage of people is our greatest resource deficiency, not only in central and northern Queensland but in Australia as a whole. The Federal Government talks about decentralisation and the development of basic industries in north Queensland in order to take advantage of its raw materials, particularly minerals. But such talk is nonsense while there L no harnessed water. The Burdekin-Fitzroy basin has the water, the limestone, the salt and the coal that are needed. These are essential ingredients for the creation of large scale industry, whether it be aluminium smelters or steel works. But nothing can be done regarding large scale processing unless water resources are harnessed. The alumina works at Gladstone found that out very quickly last year. Reserves of soft and hard coking coals are in the vicinity of 30,000 million tons in this area alone, but what do we see? We see the wild race to ship coal overseas in the raw form.

Another major function of a Federal authority on water conservation would be the co-ordination of research on desalination and the testing of demonstration models aimed at the conversion of salt and brackish water through nuclear energy and other energy, such as energy from chemicals, to fresh or sweet water. Let it be made clear that desalination is not some sort sort of panacea for solving the problems of water storage, but I submit that it is an alternative which must be given every encouragement by the Federal Government. The cities of Sydney, Melbourne and Adelaide will face crisis after crisis in the future with water shortages. In the development of additional water supplies full consideration must be given to the science and economics of desalting as well as the reuse of waste water, which is a costly process but nevertheless may be an essential process in the future. The Federal Government is the only authority which has the resources as well as the responsibility to Australia to see that this research is encouraged.

Whichever physical or chemical process is used to remove salt from water - whether it be ion exchange, electrodialysis freezing or distillation - they all have one fundamental fact in common - energy and the huge cost of providing this energy. Distillation requires heat, including in some instances solar energy. Electrodialysis requires electric power in huge quantities. Approximately 50% of the total cost of producing fresh water is for the energy needed. On top of that are the distribution costs which, as we know, are extremely high for water. The cost of producing fresh water is in inverse proportion to the size of the plant. In small plants of, sr. y, 1 million gallons a day production, sweet water can be produced at less than SI per 1,000 gallons. In large plants costing $500m - for example, the present one under consideration in California is capable of producing 100 million gallons a day - the cost is estimated at approximately $72 per acre foot or 22c per 1,000 gallons. They are extremely high costs when you consider that the costs are recurring and are not once and for all costs.

In a country which has suffered staggering loss of production and export income in major droughts and where the very means of sustaining employment in the cities are being threatened, water conservation must be given a higher priority rating than it has had up to the present. Australia can no longer afford the devastating economic destruction of droughts in areas where millions of acre feet of water flow to waste each year. Australia can no longer afford the unsympathetic attitude of the Government towards long term planning and a positive programme of water conservation. These are policies which are foreign to the negative thinking Treasury, which dominates the economic thinking of this nation except when electoral or national emergencies galvanise the Government into action to a degree which even the Treasury forces arc unable to stop. If this Government can afford to wage war in Vietnam and to pour possibly millions of dollars down the drain then surely it can afford to wage war on the greatest economic scourge that this country is faced with and will be faced with in the future - the devastating effects of crippling droughts. Surely it must be prepared to spend more money and more effort o" this problem.

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