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Impact of the Murray-Darling Basin Plan on regional Australia

CHAIR —Welcome. As you have heard the earlier warning about legal procedures I will not go through it again. We have received a submission from you. Would you like to make any additional submissions today, although you are welcome to do that at a later date as well?

Mr Pettigrew —No.

CHAIR —Would you like to make an opening statement and then be subjected to some questions?

Mr Pettigrew —I have a brief opening statement, yes. The Environmental Farmers Network represents the farmers in south-eastern Australia interested in sustainable farming in a social, environmental and economic sense. We believe the Water Act reflects the stated intent of all political parties. It has had bipartisan support of two parliaments and correctly gives initial precedence to the environmental requirements to maintain a healthy and sustainable river system.

We believe we really need to get the predicted impacts of this Basin Plan into some perspective. As farmers, primary producers and regional communities, we are annually facing potential risks dealing with commodity prices, certainly potential currency values, weather conditions and market access. We are facing risks like this with no time to prepare at all. We think a careful transition into a Basin Plan offers nowhere near some of the other risks that we are facing. To reduce those impacts of the Basin Plan it is important that the holder of the environmental water reserve has all of the options and flexibility afforded to other individual water users—that is, the ability to carry over entitlements from year to year and to trade water on the temporary water market. The demands of irrigation and the environment are complementary, and there is an enormous opportunity to support productive outputs within the basin.

The current policy of buying water from willing sellers has the potential both to lessen the productive capacity of the basin and also adversely impact on the viability of irrigators and rural communities. The Victorian example of water savings from both on-farm infrastructure remodelling projects combined with targeted buybacks really does have the ability to increase the economic outputs and are far preferable than purchasing from willing sellers. The government and the parliament need to support and promote the Basin Plan process, fully understand the economic and social impacts and debate the final legislation in full knowledge of the support mechanisms available for its implementation.

A key opportunity for economic growth and development is support of on-farm research and development of management practices, and another is the support of regional development during the plan’s transition period. Drivers for this could be a growing population and dispersed generation of low carbon emitting power. The impacts of previous changes on communities have almost, without exception, been over exaggerated. We have been through two exercises very similar to our current dilemma: firstly, in 1977, the Murray Darling cap; and, secondly, the 2002 Living Murray process. Both of these processes faced opposition with similar predictions of social and economic impacts across the basin.

In conclusion, we believe the 3,000 to 4,000 gigalitres scenario being promoted in the guide to the Basin Plan appears very much a compromise target. Minimum volumes are required to ensure that a sustainable productive working river system is ensured. Thanks, Tony

CHAIR —Thank you, John. Ian, would you like to make some comments?

Mr Christoe —Yes. Tony, you have already brought up the point that the socioeconomic impacts are a large part of what you are looking into. The northern Victorian irrigation district depends on more than just irrigation for its survival. There is potential for other businesses to establish and set up in the region, but for that to happen we are going to have to increase the liveability of the region, and a large part of that is the state of the environment. To attract vibrancy and business to the region, we depend on a strong and healthy environment. Reliable flows to rivers, to wetlands and to the forest are part of that.

CHAIR —Any questions from members?

—I have one. Thank you for your submission. At point No. 4 you say, ‘The popular call for a triple bottom line approach’ et cetera. Why do you think that is a popular call, given the fact that ‘popular’ means carried by the wider majority? Why do you think there is a popular call for a triple bottom line approach?

Mr Pettigrew —I think it is a phrase that goes back almost a decade or more. I can remember from many of the organisations which I have been involved with that the triple bottom line was an aim for everyone. The point we are making there is that we have gone past it, and now we have to give precedence to the environment to maintain a par that was not previously given. Those considerations were not given enough weight in the past. Because they were neglected in the past, I do not think, from where we stand today, a triple bottom line would ensure the safeguarding of our whole basin from an environmental point of view.

Mr SECKER —So you are saying that the triple bottom line should be ignored?

Mr Pettigrew —No, I am not saying it should be ignored. I am saying that precedence should be given to the environment. We certainly get the maximum outputs from the social and economic factors, but in this case the environment does need to take precedence.

CHAIR —I do not know whether you were listening to the previous witnesses—I think you were—

Mr Pettigrew —I was listening.

CHAIR —and the issue of allocation and entitlement. From your knowledge of this area, have you anything to say that would help us with allocations as against licence entitlements?

Mr Pettigrew —To do that, I would need to fall back on the experiences over the last decade. They have certainly been the most severe restrictions that perhaps we could ever have imagined. Most of us could never have imagined them. Whilst we certainly did drop production, the extent of that drop was nowhere near what most people expected. If we had been told 10 years ago that we would have a 30 per cent allocation, the whole town of Shepparton would have closed up shop. We would have given up. We could not have seen a future. But we know from that that we can survive. On-farm practices, on-farm management, have changed dramatically in every industry.

CHAIR —How much of your licence has been allocated to you over the last 10 years? Can you give us a snapshot of that?

Mr Pettigrew —I think it would be, on average, probably around 70 per cent, though some years are bigger-hit. Is that somewhere near, Sharman?

Dr STONE —During the drought, you are saying?

CHAIR —He was asked about 10 years.

Dr STONE —Try yourself during the drought years. I cannot remember—are you fruit or dairy, John?

Mr Pettigrew —I am a fruit grower—horticulture. But it does not make any difference; we all get the same allocation.

Dr STONE —Sure. But I am asking you whether you would like to follow up our chair’s question. During the drought you remember the season opened with zero allocation and capacity remained at zero. Goulburn opened at zero every year and went—maximum—to be about 35, so it was not 70—

Mr Pettigrew —I am on the Goulburn system, which is being hit hard but not as hard as some other systems. It is the water trading that has had the ability to ensure that industry survived on that Goulburn system over that past decade.

Dr STONE —I should not interrupt you, but you do acknowledge that there was a 50 per cent decline in dairy output and debt was doubled?

Mr Pettigrew —I am unsure of those figures, Sharman.

Dr STONE —They are the figures, yes.

Mr Pettigrew —I am unsure of those figures.

CHAIR —We should not generalise but, during the trading period, where did most of the water—the temporary trades—come from?

Mr Pettigrew —Most of it came out of the dairy industry. The horticulture industry would not have survived those decades in the Goulburn Valley if it had not been for water trading. Admittedly the price of water went up to $1,000 per megalitre, which not many industries could survive for long, but it did maintain trees in ground and actually produced a crop that year. It was not just saving your orchard; it was ensuring output for that year. I would say that it not only gave the dairy industry some much-needed funding to go out and purchase other alternatives to water—because they really did not have enough to get by—but it also gave horticulture and other industries the opportunity to purchase and survive. So I place a lot of weight on the water market, and part of our submission is very pointed in that we believe the environment should have exactly the same entitlements to carry over and to trade, because there are huge advantages.

Mr ZAPPIA —Once again, thanks for your submission, John. Roughly how many farmers would your organisation represent?

Mr Pettigrew —We range around 50 members at any one time. We have a friends list of hundreds, but we cover Victoria and well into New South Wales.

Mr ZAPPIA —During the drought years, has your organisation lost many of its members?

Mr Pettigrew —No—we have lost none, to my knowledge. I would not expect our members to be lost during the drought year; I would hope that they would be managing their farms in accordance.

Dr STONE —As you are aware, we do have environmental flow allocations in the system in northern Victoria. The Eildon Dam has, I think, 35 gigalitres or something like that held in store both for blue-green algae and environmental flow. Those environmental flows were in fact piped across to Bendigo-Ballarat during the drought and also used for some irrigation during the top of the drought. Do you have a view about whether environmental flows during the drought can or should be used for alternative purposes or, indeed, allowed to be traded if irrigated agriculture is desperate for literally keeping trees alive in the ground or herds in place? So that is my first question.

Mr Pettigrew —Two points, Sharman: the water reserve in Eildon is for water quality purposes, not environment.

Dr STONE —That is right—I said blue-green algae for that water, and there is also environmental water.

Mr Pettigrew —Yes, but there is a difference: there are restrictions on how that water can be used. It is used purely to maintain water quality in the Goulburn; it cannot be used for wetlands or anything like that.

Dr STONE —But it was sent down the pipelines to Bendigo-Ballarat.

Mr Pettigrew —It was—

Dr STONE —Yes, and for irrigation.

Mr Pettigrew —Yes, and the proceeds from that—the Goulburn Broken CMA—received a fair market price, and it was all put back into river improvements. That practice is not going to continue, but that is that point.

The other point is: yes, I would consider selling environmental water in a very dry year, because I believe the benefits of environmental water are in a wetter period where you boost floods up. I do not think there is any future to try to recreate a flood from nothing. We would need too much water; it would not be worth trying. My view is that there is a win-win situation with the water trading mechanism. Some of that environmental water could be channelled back to productive use in a drier sequence of years but maintaining it for wetter to boost floods. We need out-of-bank flows.

Dr STONE —As you are aware, we have got a 2½-month and ongoing blackwater event in Barmah. It is very serious down further down at Wakool but to focus on Barmah for a minute: Barmah-Millewa Forest does have an environmental allocation and has had it for very many years. We have this ongoing blackwater event which has caused devastation not just to the ecosystem biota but also to the vegetation. A lot of people are concerned that it is about the vegetation load in the forest which had not been managed for a long time, due to either coal burns or other sources of vegetation reduction. There is an environmental flow allocation into Barmah-Millewa. Is it that it is not adequate or not properly managed? Why is there this ongoing blackwater event which is literally killing the biodiversity as we speak?

Mr Pettigrew —I acknowledge the blackwater event. I do not think that blackwater event is any more serious than the others we are experiencing on the Goulburn and other rivers within the basin.

Dr STONE —Sure. I am not saying it is worse, I am saying it is 2½ months and continuing.

Mr Pettigrew —The blackwater is a build-up of vegetative material. I believe the impact of blackwater can only be reduced by environmental flows—by flooding on a more regular basis. You might like to burn it, but I do not think the future is just trying to manipulate nature like that. I believe that more constant, even small, environmental flows—out-of-bank flows—are needed. We were faced with more than 10 years of no flows, and there was just that build-up of vegetative flows.

Dr STONE —Actually the Barmah was getting environmental flows.

Mr Pettigrew —The Barmah had a couple, but I am saying that the blackwater is just as bad or worse in the Goulburn.

Dr STONE —I would argue that it is not quite as bad, but what I am trying to get to is: even when we have environmental flows allocated to, in this case, Ramsar-listed Barmah-Millewa Forest, are you saying it is optimal in the way you believe it has been managed, given some of the outcomes we have got now?

Mr Pettigrew —I would not be cheeky enough to say it is optimal. I think there is room for improvement with absolutely everything we do. We are on a learning curve with the delivery of environmental water. I think it is management into the future. My view would be that the blackwater event would be much, much worse if it had not been for those flows into the Barman-Millewa over the last decade. I cannot see any other option. To me it is pretty simple.

Ms LEY —I have a quick question. I know you are both farmers; can you describe what you do on your farms that might be different from what some of your neighbours do in terms of a practical farming perspective? I do not want great detail.

Mr Pettigrew —I am a fruit grower. As I sit here, I am in almost retirement. My orchard had been planted up to leave native vegetation, to plant around it. It was a very productive orchard. Things like that I can do, but our farmers—and Ian might explain more—

Ms LEY —Are you saying that the orchard is not producing at the moment?

Mr Pettigrew —No. It was bulldozed last year.

Ms LEY —Maybe we can hear from Ian on this question.

Mr Christoe —I am an irrigated cropping farmer. The farm is 320 hectares, of which about 200 hectares is cropped. All of it is potentially irrigated. Of that mix, there are about 40 to 50 hectares of summer crop when the water is available, and the rest is winter crop. That gives me the flexibility, in very dry years when water is scarce and trading at a high value on the water market, to sell. In some years that has been my best crop. But that is what sustains the horticultural industry in those dry years.

If I can continue on the way I manage the farm and how some of the new trading regulations have come in and how that impacts on businesses like mine, when you have a year of zero opening allocation it is very difficult for someone who is trying to plan how they use the water that is available to irrigate the spring crop and whether or not they will even grow a summer crop. Now that I have the capacity—we all have the capacity—to carry water over from one year to another, I make it routine to have water in storage so that I will have water in the spring and I can plan. That security and ability to plan is, to me, more valuable than the overall allocation, because I can use the water more efficiently if I know exactly how much I have or have a certain degree of security in what I have to play with.

CHAIR —Thank you for taking the time to come this morning, and thanks for the information you have imparted. If there is any additional information, please contact us; on some of the questions you might pick up an angle that you think is worth pursuing. There will be a transcript of the proceedings that you will receive. Thank you very much.

Mr Christoe —Thank you.

Mr Pettigrew —Thank you.

[11.56 am]

CHAIR —The part of the proceedings that we now move into is for people who have nominated themselves to the secretariat as having a few words to say on specific views that they may have or some information that they might like to impart. I would ask that these statements be brief to give people an opportunity to say something, and if there is some additional information that you feel would be pertinent to the inquiry then we are more than happy to receive that. So do not feel as though you have to make the Gettysburg Address. We can get an indication of what you are saying, what the key points are and what you view as some of the issues, problems and solutions. If possible—because this committee is about solutions—we would like to hear as many potential solutions as possible, and then we can follow up on some of those issues. The first person on the list is Gordon Weller.

Mr Weller —First of all, these are my personal views. I happen to be a third-generation irrigation farmer and retired from active service. I might add that I actually oppose permanent trading, and I did that because of the social impact, having been a child of the Depression and having seen what would happen when times got tight; the banks could tell you to share your water or whatever else, and nobody else seemed to be able to realise that it would be a social impact on our area. When you look at the local area, which is Lockington-Bamawm, nearly half the dairy farmers have gone. If you looked around, you would have seen dusty, weed-ridden paddocks until we got this rain, and it is a depressing sight. When we look at our school, the school at its peak had 450 children and it is down to about 150, and it is a consolidated school. I understand there are only 12 starting at the school this year, which is a hell of a drop for the area. We also were in the situation where things went down to be so bad that the last of the people selling fuel to the area left. The locals decided that they would buy the petrol outlet, and they did with assistance from the Commonwealth government, and they run this fuel lot with volunteers. If the fuel had gone, the whole town would have disintegrated.

If we look at the selling of water, I have no problem about trading, but I have a problem about the permanent trading. If we look at the trading, the orchardists were able to pay more than the dairy farmers—righto—but the dairy farmers that stayed in stayed in at a cost. So the production was still there, but at a cost: it cost us 400 grand in the first year to maintain the herd and try to keep the number of cows. Gradually we had to sell off 200 cows to try and maintain the cattle there. I went to high school at Echuca and our history teacher was a fellow called Allan Morris, who wrote Rich River. Anybody who read Rich River would have got an idea of how the Murray rises and falls and the situation there. In 1943 we looked at the skeletons of some of the boats that were in the bottom of the Murray.

The other thing that comes to mind, when you look at the salinity levels of the Murray as it gets down to Morgan, is that the salinity down there was 10,000 ECs in 1914, but that was before all the dams were put in. If it was not for the dams, South Australia would not be able to get drinkable water at all in times of shortage.

Regarding Australia being a net importer of food, I hope that will never happen, because all we are relying on to keep our economy going is digging holes in the ground. At some time the Chinese may decide they are not going to buy any more and then what are we going to pay for the products, for the food that we are going to bring in? I think we need to look a little bit further ahead than just to one election.

I will draw to a conclusion. Something that really annoyed me was that in Victoria in 1973, I think, they decided that they could sell surplus water off the Loddon, the Campaspe and the Goulburn. I actually went to see the powers that be and asked, ‘How do you make out that there is this water? They said that the official data only went back to 1905, which missed out the Federation drought in the 1880s. Basically they sold extra water when they never should have. Thank you.

CHAIR —Thank you, Gordon; I appreciate your attendance here today. You might have retired from active service but you have not retired from mental service. Ken Pattison would like to say something.

Mr Pattison —Thank you for this opportunity, Chair. I am an irrigator on the Loddon system. I would like to try and leave you with some key messages that I do not think have been covered. I was in Canberra recently, and I always get wary when I see a full-page ad telling me how great a new plan is not many days from it being released. I was in Canberra—and I have been to Canberra on these water issues five times over the last five years—I was there about the issue of space in reservoirs, changing what the reservoirs and what the Murray-Darling Basin developed and put into place, and that was for the communities and productive agriculture right from top to bottom. The Commonwealth, as we have heard before, is still buying the water, and the elephant in the room—and there is plenty of room for elephants here!—is the environmental water holder. Any environmental water that is being bought, and continuing to be bought on an every-other-day basis, is being taken from productive agriculture and the communities in the Murray-Darling Basin and being put into the reservoir.

Had this sequence of events that have just occurred and are still occurring, as you are well aware, because you have probably flown over some of it, in Victoria been slightly further to the east and Eildon had had this environmental water that they claim to put in Eildon for carryover and for the environment, Shepparton, where you are going to be later on this afternoon, would have been underwater, absolutely underwater. Once you start putting those sorts of volumes away and calling it for the environment, that would be the outcome. So we started this season with Cairn Curran practically empty and now it is full and we have got floods. There is a real danger in our communities in this environmental holder and the way that environmental reserve is going to be managed that will have severe socioeconomic ramifications for people in the Murray-Darling Basin.

Referring to the socioeconomic ramifications, I have not said this but the Marsden Jacob report says it, so I direct you to it in case you have not got that, that a 40 per cent reduction on average—and I will get back to averages—will produce a drought every year in the last 10 years. We have heard people this morning say—

CHAIR —A 40 per cent reduction in allocation or licence, or both?

Mr Pattison —It is licence averages, and I questioned the chair of the commission on averages, and of course he ducks behind the act. He says, ‘The act says we’ve got to do it in averages.’ What is an average? A drought and a flood in one year divided by two. So what would we have got in the last 10 years on average? If we now put together this sequence which we are now experiencing, we will probably get 3,000 gigalitres come out of Victoria. So if we average that back the environment has done very nicely, thank you very much. But of course it has not and we have not either. The plan clearly spells it out, that it is based on averages. Averages are deceptive and distort the true position. When you get to Deniliquin you will be told there, as Susan Ley knows, that there will be no rice industry. They said in Deniliquin, ‘Remove that amount of water from productive agriculture and they will not be there.’

Ms LEY —Who said that?

Mr Pattison —One of the directors. I am sure you are aware of Mary Harwood. For those irrigators remaining and who want to stay their entitlements will remain and they will not suffer a loss of water. On page 104 of the guide, how will the SDLs operate, there will be some years where the actual allocation will be lower and some years will be higher. I have got a full allocation today. I have got carryover from last year and 98 per cent of my property was flooded last week. Geez, I am glad I have got that water there. But in the last 10 years what did I get? So this nonsense you have heard this morning and that has been peddled that no-one in the communities is going to suffer out of this deal is rubbish.

CHAIR —I have to ask you to conclude, otherwise others will miss out.

Mr Pattison —Okay. I alert you to the fact that while they are buying it back and it is going to the environmental water holder, regardless of what you people come up with it is just happening, if you remove half the high security entitlement out of Goulburn Murray water district it will be unviable. The people who remain are looking at overcapitalising, $2 billion they are suggesting to spend on the Goulburn Murray irrigation district, so the water price will be unviable for the vast majority of the people that are left. I am saying that if you enact this guide they will not be able to stay and the people will go.

Mr TEHAN —Could you explain to us what the impact of the flood will be on your farming operation?

Mr Pattison —I have lost all my lucerne stands. Every bit of pasture has gone. I got up this morning and it was just a smelly, black, sodden mess. I am 65. Our family came there in 1869 and my grandfather commenced irrigation in 1881. It is the worst flood I have experienced in my life. There are going to be a lot more willing sellers. That is another one—‘willing sellers’. I love that! Rubbish!

Mr TEHAN —Can I add that right across western Victoria and northern parts of Victoria we are getting stories like this from farmers.

Mr Pattison —The loss of infrastructure, in roads and channels, privately and by the government, will be the worst experience, I think, in white man’s existence here. We have built everything up. There have been 200 gigalitres out of Laanecoorie. None of the records show that, even when Laanecoorie burst, back aways. The only difference between Victoria and Queensland is that we have not had a massive loss of life. That is the only difference. We had 1,160 points—sorry about the old language—from Sunday morning to Thursday. That has never been recorded on our place in my life before.

CHAIR —Thank you, Ken—

Dr STONE —Very quickly, Chair, I think we should really commend Ken, given that he is in such extreme circumstances on his property, including massive destruction of roads and whatever, on the fact that he actually got here today. It is quite extraordinary, Ken. We commend you for knowing how serious it is for your future and your community’s future to give this evidence.

Mr Pattison —Thank you. Chair, I am not wishing to haunt you, but I have actually been invited to attend at Shepparton and help over there this afternoon, so we will see you a bit later on.

CHAIR —We would welcome your attendance. Any additional information that you would like to have given we will welcome as well.

Mr Pattison —We only put one page in. We will get onto it. We were busy with the state election.

CHAIR —Thanks, Ken. Is Don Lawson here?

Mr Lawson —Thanks, Mr Chairman. I come from basically the catchment. I have had 40 or 50 years experience in the catchment of the Upper Goulburn, the Yea and the Murrindindi in particular. We have had floods of this nature in February and Christmas Eve in the past. You will not believe that I did my master’s degree on the social and economic impact of automatic irrigation in the mid-Canterbury region of New Zealand. So I have an interest in water. In our business, we find up to 20 per cent of productivity gains in weight gain in our cattle between good and bad water. I have also been involved with irrigation on the Yea River, Berrigan, Goolgowi and Toobeah, west of Goondiwindi.

What the water buyback has achieved, in my opinion, is that it has put an economic value on water. Having achieved that objective, it is now time to stop it. The Murray-Darling Basin Plan is flawed, in my opinion, in that it has failed to look at the catchment’s hydrology changes over the last 40 years and has not looked at potential hydrology changes over the next 40 years. Farmers, you are aware, have double the productivity gains of the rest of the community and we will continue to do it. In our business of bull breeding, for example, 40 years ago we used to sell bulls of 1,100 pounds at 26 months old. Now we have them at 11 months of age. There have been productivity gains. There are not many people who have been around as long as me to see these things. It has not taken into account the changes to the catchment’s soil water-holding capacity, implemented by good land managers, the farmers, who have eradicated rabbits, massively reduced erosion and, in some cases, planted deep-rooted perennial pastures.

Then we have the timber plantations. In the shire of Tumut 70 per cent is now in timber, so there will be a massive reduction in run-off. Viticulture and olive groves et cetera have all substantially reduced run-off. I was also involved at Cobungra station at Omeo-Mount Hotham for 30 years. We had 80,000 acres of leasehold country near to Dargo. On crown land we have had massive fires and there are projections of reduced run-off over the next decade or two. Basically from Mansfield to Corryong has been burnt out. My observations of the catchment indicate that 30 to 40 per cent of the catchment soil could still have water-holding capacity increased, particularly if livestock prices remain near profitable levels. We have 100 million fewer sheep in the country and we reckon our client base cow numbers will be down 30 to 40 per cent. For argument’s sake, half a million dairy cows have gone out of the Goulburn Valley.

It is appropriate that you are in the Bendigo region. Take for example Lake Eppalock. When it was built, erosion and siltation were the major issues. Farmers and the old soil conservation office, together with many contractors, including many from my home town of Yea, chisel seeded thousands of acres, including probably 20,000 acres at Puckapunyal. There is no longer erosion and siltation, and the run-off has been substantially improved by good farmers. It is time our farmers received some credit.

There has been far too much focus on climate change, the irrigators and the environment and not enough emphasis on where the water comes from: the catchment. Having listened to previous presentations in Melbourne at the Murray-Darling Basin Authority, the critical issue in simple terms is the salt load in the Murray. This will increase again as wetter periods return. Rising water tables and salinity were the big issues up to the start of the drought. They will return. Having been to a presentation by the Gates Foundation, I believe Australia is out of touch with the rest of the world. The Gates Foundation is pulling money out of health and putting it into agriculture because they realise they are wasting their money on health when the basic issue is malnutrition.

I believe that we need more people in rural Australia to alleviate all the problems in the major cities. This will not occur by removing water from regional Australia and from food production. To me, it seems a waste of public money buying back water when the use can be regulated by quotas. What is needed is the diversion of coastal water back inland, as is the case with Snowy scheme. This would give you green power. We now have a value on environmental water and that water needs to go down an estimated 2,000 to 4,000 tonne of salt load below Mildura in the river.

We now have a value on environmental water and I think some vision is needed, just like we are seeing in this town hall today, to start looking at another scheme, say, from north-east New South Wales where predictions are the water will increase. I have seen other projects as far up as the Burdekin. The water needs to go down the Darling to flush the lower river. If my projections are right, we will face further reductions in run-off over the next 40 years into the Murray-Darling Basin. Yeomans will come back into fashion and all sorts of other things in the hills. A hydro scheme to reduce green energy is needed. The water should not be used for irrigation but for environmental purposes, with the priority to flush the salt down the lower reaches of the river.

If water for the environment has a greater value than irrigation, as seen by the buyback, this would seem to have economic sense. You have seen what has gone on with the North South pipeline, where those of us in the catchment were ignored. The focus of the whole Murray-Darling Basin is on everything except where the water comes from. I estimate that, on our farm alone, the run-off has been reduced about 30 to 40 per cent in the last 40 years with the eradication of rabbits. You could put this building in the erosion that was occurring 40 years ago. We sell bulls all around Australia, and my observation is that 30 to 40 per cent of the catchment is still sitting there waiting for improvement to the soil water holding capacity. I think it needs some vision, and it is time Australia had some visionary projects.

CHAIR —Thank you, Don; I appreciate those comments. They are valid comments in terms of the changes in land use activities in the catchment. I know that, in our area, there have been quite dramatic changes in farming technology. Most water does not leave the property these days because of changes in farming technology, not restrictions.

Mr Lawson —Circumstances of the last decade have meant it has all been on hold. The advice we get from around the world is that cattle numbers are on the decline and that the prices will be high. The refinancing of ethanol plants in America means that their cattle numbers are going to go down. It is time that people in the catchment were treated with a bit of respect and dignity.

CHAIR —Thank you. Don.

Mr SECKER —For the advice of the committee, I believe that Mr Lawson’s reference to ‘Yeomans’ is a reference to Yeomans contour planning.

Mr Lawson —Yeomans was in relation to contour chiselling and seeding in the catchments to retain the water. I do not want to give you a lecture, but there is sufficient evidence to show that if you put a plantation at the head of a gully you can reduce the stream of flow by 80 per cent. No-one has projected how much run-off is going to be reduced in the crown land due to fires and failing to follow Indigenous land management, and farmers getting some cash in their pockets. As far as irrigation farmers go, what do we do—a 2.5 per cent productivity gain against the rest of the community of about 1½? As I understand it, the dairy industry has increased productivity to greater than any other industry in Australia in the last decade. My mates are saying that it is time governments stood up and said whether they want farmers or not. Tell us where we stand. I am in Jurassic Park, if you are looking for me. Actually, I am in the Australian Beef Industry Foundation. One of the other big worries is that no-one is doing agricultural science and coming into agriculture, and we are looking to address that issue.

CHAIR —Thank you, Don.

Ms Dawson —I am the Chair of the Loddon Valley Regional Development Australia committee. Firstly, I thank you for bringing your committee to our region. Whilst we may not have filled the Town Hall, it will not be noticed that the faces that people see on TV are here in Bendigo—and they have come to Mildura. Unfortunately, I understand why you could not make it to Swan Hill, but thank you very much. It is important for our communities to see you out and about.

I just want to make you aware of what RDAs and doing in this place. As you are aware, the RDA is a government appointed committee. We have five representatives of the community and five representatives from local government authorities in the region. Our role is to report to the state minister for regional development and the federal minister for regional development.

Our objective is really simple—it is to advise the ministers about how our region can be the best that it possibly can be across all measures, social economic and environmental. We just want the Loddon Mallee region to boom and to be the best that it can be. Naturally, I am parochial; I will speak about the Loddon Mallee region.

We are interested in the plan because we want to make sure such a large policy change is going to be of net benefit to the region and not a net detriment to us. So I thought it appropriate to inform you of what we are doing in response. We have sent a submission to your committee. It was very early advice, pre the draft. The information in the submission was a collation of everything that had been out there relating to the Loddon Mallee. We are also working with the consultants that the MDBA have appointed and our role there is to make sure that all the appropriate voices throughout the region—those who have something to say—are being involved in the consultation process.

Thirdly, Minister Crean has specifically tasked us with looking at—I am paraphrasing—what industries and communities will be most affected and how detrimental effects can be reduced. He has asked us to report back by mid-February. Because of that, our work is not complete. I apologise that our submission cannot be more fulsome at this point. We are working, I guess, to different timelines. I really just wanted to inform the committee of the work that we will be doing on behalf of the region in this space.

CHAIR —Thank you, Jenny. I think it is very appropriate that you are here because this is a regional Australia committee and this committee was not set up to investigate the Murray-Darling. We thought that, seeing this was so pertinent and it potentially has quite dramatic regional and development impacts, this was worth inquiring into. As circumstances are unfolding, I think that is becoming more and more obvious. Thank you for taking the time to be here.

Mr Morrison —I am speaking as a resident of Bendigo and a landholder from the Pine Grove area. I only found out that this was on a few hours ago so I will be very brief and keep it succinct. I just wish to remind the panel that 100 per cent of the water in our system was environmental flows until we wisely created the irrigation industry. Once we set that industry up it took up vast amounts of water out, and has increasingly done so. It has become a very powerful political lobby as evidenced by the size of the irrigation lobby cheer squad that we see out in front of us now.

I think it is time to put a stop to how much is dragged out of our system. I remind you that a lot of the water that is generated in this system comes from public lands and the public as a whole has a right to expect that the water is used for environmental as well as productive purposes. I think the irrigation lobby is way too powerful in our political system.

I also hope that the panel does not think that they have to prop up the irrigation system as it is now. Clearly it needs to be rationalised into areas that are most productive. We also need to rationalise what sorts of foods we grow. The emotive stuff that I heard this morning about food and food production fails to look at the sorts of food that is produced. Only a few years ago we used to see grass being grown on irrigation lands for grazing sheep. That is clearly a waste of resources. There are far more nutritious foods that may be produced on smaller areas to prop up a large population.

Clearly this issue of overpopulation is something that the current crop of politicians is failing to address and hand-passing to the next generation. But at some stage we will have to confront it. We can argue that we need to keep producing more food to prop up a larger population, but at some stage we do reach a cap on how many people we can have. So this issue will have to be addressed at some stage in the future, but I would prefer it to be addressed now. That is all I would like to say, thank you.

CHAIR —Thank you, Peter. That concludes the hearings today. I would just like to publicly thank the people who have attended today, particularly those who have given submissions but also those who obviously have an interest in where they live and a broader interest in the catchment and the valley itself. We appreciate that. We are taking this issue seriously. Obviously it is a serious issue because it is one of the few issues where the four states and the Commonwealth actually signed off on an agreement back in 2007 to initiate a process. So there are obvious concerns both post and pre drought as to the health of the catchment itself. We will be doing what we can to filter through the various submissions—as I said earlier, there are something like 600 of them now—as to the various recommendations that can be made. This committee is essentially a microcosm of the parliament. If we can come up with some sort of consensual approach that moves forward and recognises the very real issues that are in the catchment, I think we can make a very positive contribution to the final arrangements. Thank you for your involvement in that. Some of the information has been invaluable. Thank you.

Resolved (on motion by Mr McCormack):

That this committee authorises publication, including publication on the parliamentary database, of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 12.32 pm