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Wednesday, 8 May 1968

Dr PATTERSON (Dawson) - The Opposition welcomes this Bill. After years of delays and after repeated requests by the Queensland Government dating from 1949 when the Burdekin scheme was first put to the Commonwealth this Government has finally yielded to mounting pressures from the Queensland Government and everybody concerned about water conservation in Australia and has agreed to accept responsibility in the matter so far as Queensland is concerned. Queensland has by far the greatest proportion of Australia's surface water supplies. It is well known that the decision in respect of the Maraboon Dam, like that in respect of the Ord River scheme, was not taken willingly by the Commonwealth. It is well known that the Treasurer (Mr McMahon) and some of his colleagues in the Cabinet have for years been bitterly opposed to the Commonwealth's expenditure of money in this way. Some honourable members opposite would rather see Federal funds spent in areas other than the north. Some months ago we read that the honourable member for Wakefield (Mr Kelly), who is now Minister for the Navy,' was emphatically opposed to water conservation schemes in the north. He described them as a waste of money. However, we know that as regards national development the views of the Minister for the Navy are not regarded highly. The attitude of some members of the Liberal Party towards water conservation schemes was illustrated last night by the honourable member for Bradfield (Mr Turner) who said: . must we throw away $100m on useless dams in Queensland and Western Australia, and then claim that we do not have money foi defence? Must we' have an' inefficient economy, with flaccid industries, through a tariff policy thai results in feather bedding? I suggest that much is to be saved.

Over the years I have listened to many well formulated statements made by the honourable member for Bradfield, but I suggest that the statement he made last night was irresponsible. It is obvious that other Liberal Party members; who are attempting to interject, oppose the expenditure of money on the Maraboon Dam and no doubt also on the Ord River scheme. I would have assumed that Government backbenchers have a say in the Government's decisions. Apparently they do not.

As I have indicated, the Opposition agrees that there is a need to spend more money on water conservation but we do not applaud the Government's apparent refusal to organise and to plan a system of priorities which could be discussed and debated. If the Commonwealth is to make available funds for water conservation, this Parliament and the people of Australia are entitled to know the order of priority of the various schemes. In the past the Commonwealth has made grants to the States for such projects as development of the brigalow lands, a comprehensive scheme of water reticulation by pipeline in Western Australia, the Ord River project, beef roads, flood mitigation in New South Wales and the Blowering Dam and the Chowilla Dum. But in respect of only two of those projects - development of brigalow lands and the comprehensive water scheme in Western Australia - has the Government published a report that may be analysed and debated. This is wrong. If we are to spend large amounts of money on 'development projects we should do so only within a system of clearly defined priorities determined within clearly defined criteria. It ~ is essential that this Parliament and the taxpayers have some idea of the relative priorities of beef roads and irrigation schemes.

The Ord River scheme and the Nogoa Dam project were announced on the eve of the last general election. To do that is, of course, the prerogative of the Government. But I would suggest that the governments of Queensland and Western Australia got a bigger surprise when the decisions were made than did many people in this Parliament. We want to know more about Commonwealth priorities in the matter of development. As the Minister for National Development (Mr Fairbairn) has said, Queensland gives the Nogoa River project No. 1 priority. I ask the Minister: Does the Commonwealth agree that the Nogoa River scheme should, have No. 1 priority? I suggest that the Commonwealth docs not have the faintest idea about priorities because it has not made any serious or comprehensive investigations of other irrigation projects in Queensland.

There can be no doubt that the Nogoa scheme will bring tremendous benefits to the very drought prone area of central Queensland. But there are other areas in Queensland that must be given some priority - even equal priority with the Nogoa scheme - in the matter of water conservation. lt will be interesting to see how the Government determines priority when the next grant is made. Will it be simply a matter of the Queensland Government stating which scheme in its view has second priority? Will there be a comprehensive investigation not only of the scheme nominated by the Queensland Government but also of alternative projects? Such an investigation is essential if Federal funds for development purposes are to be spent in the most advantageous manner.

The Opposition supports the Nogoa project. The Commonwealth has decided to make a grant of S20m for this scheme. However, it is important to remember that the Federal Government and the State Government have different objectives and different criteria in determining priorities. The Commonwealth criterion in development always was and, I assume, still is that export income or balance of payments is given a very high rating and the development of a particular region or area in Australia is also given a rating. However, the principal criterion is the ability of the project to earn additional export income, and there can be no question that the Nogoa River project will earn additional export income. It will enable the production of crops which can be sold on the export market. It is surrounded by an in-built cattle industry. It is surrounded by one of the most drought-susceptible areas in Australia. Its soils are capable of growing most crops that can be grown in the sub-tropics, particularly coarse grain, for which there is a world demand at the present time and will be in the foreseeable future. However, the main point 1 am making is that the Federal Government has a responsibility to implement some type of plan with respect to development priorities.

The ad hoc, unco-ordinated approach' that we have seen over the years is to be deplored. Without qualification, every decision in the field of development in northern Australia has been the result of political adversity or a political promise on the eve of an election. Honourable members can go through them all and see that this has been so. from the original Ord River grant in 1958 to the great splurge of development from 1961 to 1963. Then, after the Menzies Government was returned with a record majority, development stopped for several years, and there was an upsurge again in the last 2 years. Every decision can be directly correlated with politics and in the field of national development this is quite wrong. Priorities should be decided upon particularly in the field of water development. An allocation of $50m over 5 years is so absurd that even the former Minister for Primary Industry condemned it. An expenditure of S50m over the next 5 years for water conservation in the world's driest continent is too absurd for words.

The Nogoa Dam is a project which the people of central Queensland have been advocating for many years. It is to be an earth and rock filling dam on the Nogoa River, capable of irrigating up to 80,000 acres. It will store a little over 1 million acre-feet of water, to be reticulated by gravity. The soils in the area are still to be tested, but on the best data available in the surrounding areas, and by analogy, it can be confidently stated that the soils are good. Of the. area of about 80,000 acres the brigalow soils would constitute about half. About 17,000 acres are made up of alluvial clays. The brown and red sandy soils which are highly suitable for lucerne growing make up about 11,000 acres, and the cracking clays, which could cause some problems, about 5,000 acres. Most of the soils, as has been shown by laboratory tests, are low in total nitrogen. They are slightly acid to alkaline, as would be expected. As depth increases there is an increase in the percentage of lime. Phosphorus is generally low, as is characteristic of most soils in those areas, and the potassium supplies are also low. This means that for successful irrigation farming there will have to be considerable use of phosphorus, and sound agricultural practices will have to be followed with respect to the accumulation of nitrogen.

As regards the land use of the area, it would seem that the best crops, based on present prices, would be sorghum, both grain and fodder, wheat, yellow maize, cotton and lucerne. Of course, great benefit to the surrounding cattle industry will result from the irrigation project, not only by supplementary feeding but also by enabling a consistent supply of fodder to be diverted to those areas which suffer from severe nutritional distress in those months of the year when moisture is limited. As regards the methodology, it is not possible to comment at the present time, because the assumptions made in the reports upon which the Commonwealth Government is supposed to have made its decision have not been published. However, there are a number of methods by which the evaluation process can take place. The ideal method by which any Government makes a decision is maximisation of welfare, which takes into account not only economic principles but also intangible principles, such as politics. Why a government spends so much money in ari area is a matter for that government, but surely the decision should at least be based on sound premises with respect to the hard core of agriculture - if it is a matter, involving agriculture, lt is a salient requirement that in any irrigation project it is essential that the hard core of agriculture be sound. If it is not sound the scheme must fail, irrespective of what decision is taken with respect to water, because if farmers cannot make a profit from agriculture, no amount of water will save them. They must be able to make a profit, whether it be from dairy farming, sorghum production, or cotton, based on the prices obtainable for the product. Bear in mind that the essential factor is that the hard core of a project must be sound'.

The return on capital is another measure. The internal rate of interest is another measure. The time for return on the investment is a measure commonly used in America. The one most used in Australia now is the benefit cost analysis, which is being used in effect to maximise the excess of the present value of benefits over the present value of costs, this maximisation, of course, being subject to the total capital investment for the project. Again, we cannot comment on the methodology because we do not know what assumptions have been made with respect to the rate of interest or to the time 6f the project. With most development projects, a period of either 50 or 100 years is taken for discounting purposes. I . had previously mentioned the great difficulty in judging any . decision on benefit cost analyses.

As I have said, the use of benefit cost analysis to pass final judgment on a project is wrong unless that project is so highly economic under certain variable assumptions that there can be no question. The correct use of benefit cost analysis is the comparison or measurement of alternatives of like projects, where like assumptions can be used. It is then up to the Government to decide which of those projects it will adopt, based on accepted economic and accounting principles, and then to make adjustments for its own political criteria which are qualitative criteria, outside the normal economic and accounting considerations.

The point at issue, so far as we can make out from the Minister for National Development, is that only two projects in Queensland are being considered - the Nogoa and the Burnett-Kolan projects. Since 1949 the Queensland Government has consistently put up projects for evaluation and Commonwealth assistance. We started with the Burdekin scheme which, when put to the Commonwealth, was knocked in no uncertain terms by Sir Arthur Fadden. Of course, that has been made clear many times before.

Mr Turnbull - That is quite wrong, of course.

Dr PATTERSON - It is not. If I were to read to the honourable member the views of the Queensland Premier at the time, I could prove conclusively to him what the former Leader of the Australian Country Party said on 17th November 1949 in his policy speech at Boonah. He asserted that, if elected, the Government would not put the Burdekin plans in a pigeon hole but would go ahead immediately to build the Burdekin Dam.

Mr Turnbull - Sir Arthur Fadden explained that in this House. It is recorded in Hansard.

Mr Erwin - On a point of order. Do these remarks have much to do with the Bill under consideration, Mr Speaker?

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