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Thursday, 22 May 1980
Page: 3092

Mr KEATING (Blaxland) -The Western Australia Agreement (Ord River Irrigation) Bill is to enable the Commonwealth Government to provide additional funds to the Ord River project in Western Australia. This assistance is to be in the form of a loan for expenditure on crop handling and processing facilities. Although funds for this loan are available under the 1968 agreement between the Commonwealth and Western Australia, that agreement does not provide for expenditure for this purpose. Since the joint Commonwealth-Western Australian Ord

River Irrigation Area Review Committee recommended that some of the remaining funds should be used for crop facilities, that agreement is now being amended. The State Government has requested funds to contribute towards the cost of an additional 3,000-tonne capacity rice storage and associated facilities. The loan is to be serviced by the rice industry by way of a levy on rice production. This, of course, is assuming that sufficient rice is produced. Given the history of the Ord there is no guarantee that rice will prove a more profitable crop than previous products.

The Minister for Trade and Resources (Mr Anthony) in his second reading speech pointed out that this additional storage capacity will be required to cope with the projected expansion in the rice industry following crop successes over the past few seasons. Although the Opposition is supporting this legislation, we have a great deal less optimism concerning the future of the Ord project than that demonstrated by both the Commonwealth and Western Austraiian governments. We support limited funding for the project because a commitment has been made to the farmers who settled in the area, farmers who believed the promises of the Western Australian Government.

In the early days of the scheme the then State Minister, now Sir Charles Court, heralded the project as one of the great promises of the future. This is part of the cargo cult mentality which is still carried on by the Premier of Western Australia. Now it is not irrigation schemes, but new mines, most of which never eventuated. Sir Charles Court made great projections about rice, sugar cane and oil seed crops, none of which have been achieved. The entire history of the Ord has been one of failure. One of Australia's better known agricultural economists once described it as a triumph of political expediency over basic common sense. Close to $100m has been spent on the scheme but it still remains unproductive.

Despite recent limited successes with rice a profitable system of farming the Ord is still to be found. Its history can be traced back to the 1930s, when it was felt that something should be done to develop the Kimberley region. This was well before there were any signs of the large mining developments. Various research stations were established during the next 20 years and, after considerable pressure from Western Australia, the Commonwealth Government agreed in 1957 to provide a grant of $5m. Since then large amounts of assistance have been given. In 1958 this amount was increased to $10m. As originally envisaged, the project was to cost $29m and consist of four stages. Only two of these stages have been completed at a cost of nearly $100m. There have been some signs of success during the past 17 years since the project was officially started, but all of these have been very short lived.

Of all the crops expected to be grown, cotton became the preferred crop. In 1966-67 farms in the region produced about 20 per cent of Australia's cotton crop; yields were high. It was soon realised that without the payment of the cotton bounty by the Commonwealth that production would have been far from profitable. High hopes were also held for the cattle industry. By the mid-1970s both industries had virtually been destroyed. Insect infestation virtually ruined the cotton crop and insecticide spraying of the cotton also put paid to the potential cattle industry. It has been a really happy story there. It was originally forecast by Sir Charles Court that 20,000 people would settle in the Ord region. How this man can be believed about anything is absolutely beyond me. Yet he is still being listened to by the nation as a serious -

Mr Hyde - Everyone is entitled to one error.

Mr KEATING - As the honourable gentleman interjects, everyone is entitled to one error, but this was a $ 100m error. But what a mess this area is. Even when cotton was showing favourable signs, the maximum number of cotton producing farms was 31. That dropped to six with the cotton failures. Now there are 19 farms with some expectations of the number increasing.

The fledgeling rice industry has some potential. The last wet season saw the greatest acreage under crop since the scheme started in 1 963 but even with the recent increase in rice production the scheme will never reach those production levels originally projected.

The Joint Commonwealth- Western Australian Review Committee under the chairmanship of Sir Norman Young which completed its inquiry at the end of 1978 considered the option that the Ord scheme should no longer be supported by government. He stated that this course 'had to be seriously considered because of the controversy which has surrounded the Ord project since its inception, and the present low level of productivity'. The Committee concluded:

In terms of contribution to net increase in national output the project has been of no benefit.

Despite that conclusion the Committee recommended continued government support of a limited nature of five years. That recommendation was accepted by the Commonwealth Government. On the basis of the Young report there is no real argument for continued large financial support by the Commonwealth. The report provides the perfect reasons for phasing out government support for the Ord quickly and spending the funds in more profitable areas. It is unlikely that a profitable use of the Ord will be found. Talk of a sugar cane and ethanol production is now in the wind. The Colonial Sugar Refining Co. Ltd has recently completed a study for Western Australia on the feasibility of a sugar industry. Apparently the conclusion of this study was that sugar would be uneconomic unless the price received were greater than $350 a tonne. The current price is about only $325 a tonne. This makes it much more expensive to grow sugar in the Ord than in Queensland. When transport costs are included, ethanol production would also be uneconomic.

Another proposal being looked at for the region is to use the main dam as a source of hydroelectricity. The quantity of water in this dam is about nine times that in Sydney Harbour. A feasibility study is currently being conducted by the Federal, Western Australian and Northern Territory governments. Under the proposed scheme, Western Australia would build a 60 megawatt station costing about $45 m and it would cost a further $45m to build a 600- kilometre transmission line to Darwin. Local power demand would not be enough to warrant this project but with the demand of Darwin it may prove viable. Darwin is certainly in need of new sources of power. The Federal Government is facing increasing subsidies for the city's unreliable power system. A condition of the Northern Territory achieving self-government was that Darwin power charges would be kept at the same level as those in northern Queensland. These subsidies could amount to $50m by the early 1980s. The construction of a hydro scheme could at least save this expense. In the long run, it may prove to be a profitable use of the largest white elephant Australia has ever been associated with.

The irony of the Ord scheme is that there is a very strong likelihood that commercial diamond deposits are under the main dam. That is indeed ironic for the most indefatigable of miners, Sir Charles Court. It may be that the best reserves in the State are under the water itself. It may eventuate that the dam should be drained in order to mine these deposits.

Mr Hyde -Ha ha!

Mr KEATING - One cannot help but laugh. After 20 years and the expenditure of $ 100m we may end up where we were 20 years ago before the scheme began. This is all part of the imagination, involving the Third World battle and things like that, of Sir Charles Court. He talked about these things at the Australian Mining Industry Council meeting last Monday. He has never changed his tune. It is the same story, the same appeal- the cargo cult mentality of more mines, more projects, more development. Apparently the economics are just to be ignored. Whether one can sell the material, whether one can get it to market, whether one can get the right price, whether the ore bodies are of sufficient grade to be mined, whether the shape of the ore bodies can be handled by engineering are all beside the point. Everyone has to rush in to develop because the great Sir Charles Court has deemed that this is the way in which Australia should be developed. The Ord River scheme stands to condemn him for that style of thinking in Australia. It should expose to most people the fact that this development for development's sake syndrome which Sir Charles Court and others are associated with does not bring employment or wealth to the cities of Australia, to the areas where people could really use these kinds of public infrastructure and public resources. I believe that places very serious caveats on the unfettered development syndrome under which people like Sir Charles Court tend to operate. Of course Australia wants development; but it wants sensible, planned, coordinated and rational development by which the wealth accrues to the Australian people and hundreds of millions of dollars of public infrastructure are used for the great benefit of most Australians and not to satisfy the wild dreams of some recalcitrant State Premiers.

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