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Beware the strings attached to exit grants.

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Monday, 3 November 2008


Irrigation communities should be alerted to conditions attached to Federal Water Minister Penny Wong’s latest $150,000 exit grant package announced on the weekend. Federal Member for Mallee John Forrest said of special interest was that the money would not be available unless the states removed “a number of state-specific barriers to trade”. “Put simply, Minister Wong wants to remove the four per cent cap on water trade a year, out of our irrigation districts,” Mr Forrest said. This could gut the

pumped districts in Sunraysia, NSW and South Australia. Minister Wong is keen to see the four per cent cap gone, but it’s not as easy as that. Can you imagine the cost of stranded assets on remaining irrigators in our irrigation districts, particularly in this time of drought. “This is a kick in the guts for growers already on their knees at a time when they needed an industry assistance package separate to water. We are talking about Mildura having a future in irrigation infrastructure. Currently, there are too many desperate growers who will grab this offer so the government can get water. I can’t believe that last week I was asking the Minister to deliver this package urgently. What a bomb it has turned out to be. Minister Wong has advised the $150,000 exit grant package will be available in each state from the date agreement is reached with the Commonwealth until June 30, 2009. The Australian Government has requested that state governments agree to a number of reforms that will enable the ”effective delivery of the Murray Darling Basin Small Block Irrigators Exit Grant Package”. “In other words, the Federal Government has requested state governments support federal water reforms as a pre-condition of access to the grants,” Mr Forrest said. It will be interesting to see the fine print once the states have negotiated a deal with Ms Wong. “Irrigators interested in the package should register, but they should also carefully consider, if necessary with the help of their financial counsellor, the implications of agreeing to this offer, including who pays the termination fees from the irrigation district where the water has come from. “In addition, irrigators should speak to their accountants to consider the capital gains and income tax implications of selling the water and accessing the grant,” Mr Forrest said.

Mr Forrest can be contacted on 0428 500 186.

John Forrest MP The Nationals Member for Mallee

Phone (03) 5021 5987 Fax (03) 5023 3274