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Impact of the Murray-Darling Basin Plan on regional Australia

CHAIR —I welcome representatives of the Wimmera Irrigation Association to today’s hearing. Would any of you like to say anything about the capacity in which you appear?

Mr Grahame —I am an adviser-consultant to the irrigators association.

CHAIR —Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. We have your submission in front of us. Do you want to speak to it briefly and then answer some questions in relation to it?

Mr Atkin —Yes, we would like to speak to it briefly. The Wimmera Irrigators Association shares the concerns of many communities about the potential ramifications of removing an economic asset in the form of water from a community. But we are in quite a different situation, a unique situation, where our irrigation community at the moment is a willing seller of water, potentially, hopefully, to the environment. I will come back to that in a little bit more detail shortly.

Just to put it into context for panel members, the Wimmera irrigation area covers approximately 3,500 hectares. It was established in the late 1890s and early 1900s, principally around horticulture. It is one of the earliest irrigation schemes in Victoria. Also, it had some further expansion around the war years through soldier settlement projects. It is located to the west, east and north of Horsham, so it is quite a scattered irrigation area. At the moment there are approximately 220 irrigators. Within our bulk entitlement for the Wimmera Mallee there is an allocation of 28,000 megalitres to irrigation, which includes 9,000 megalitres in distribution losses. Due to the historical nature of the irrigation area, probably 60 per cent of irrigators hold less than 30 megalitres in entitlements. That has been one of the issues we have had to deal with in recent years.

About three years ago we went through the process, in conjunction with our local water manager, of looking at modernisation and a number of other ways forward for the system. At that point we were in the middle of a 10-year drought for the region but about eight years of no water for the actual irrigation system. So it was a fairly dire situation for irrigators. As a result of that we looked at modernisation. There are a number of issues arising through that, but it still remains on the table as a fallback option for us, as opposed to trying to sell and close our irrigation system.

Some irrigators had tried to participate in the past in the federal government tender water buyback processes, but for some reason, although while we are within the Murray-Darling Basin, our area was excluded from participating in those various schemes. We are getting similar feedback with regard to the potential access to modernisation funding. We might be on the fringes and well down on the priority list as far as trying to receive funding for modernisation in future. This led irrigators to look at what seemed at the time the most obvious option. That was to try to sell our water, close the irrigation system, decommission it and sell the water to the Australian government for return to the environment.

Locally, the Wimmera River is a heritage river and it is considered to be in very poor condition environmentally and in poor condition hydrologically. The Wimmera River feeds into a number of terminal lakes, including Lake Hindmarsh, Ramsar listed Lake Albacutya and a number of other smaller lakes in Lake Wyperfeld, which are also, I gather, listed as heritage lakes. I am not quite sure exactly what that connotation means. At the moment, we have 100 per cent agreement from all irrigators to sell our water to the federal government, if they are interested in purchasing it. Obviously, it is contingent upon an agreed price, and also that agreed price requires funds to enable the system to be decommissioned.

As you will note from our presentation, we have been down the irrigator-led proposal process. We initially submitted one price and that was rejected as not being value for money. We submitted a subsequent lower price and that was again rejected. Just prior to Christmas we were in the process of submitting a third proposal, which did not go in formally but was being discussed verbally between the Irrigation Association and DEWHA—or whatever they are called these days. During that process the Murray-Darling Basin Plan was released. It suggested that our region did not require recovery of any additional water for the environment. We have some issues with that. We are not quite sure whether the underlying science has been correctly interpreted. Jim might expand on that for you shortly. At the moment those discussions have been halted. That is where we are at the moment.

For the first time in about 10 years we have a full allocation of water in our reservoirs for an irrigation season. Therefore, this offer to the federal government may have a limited life if some irrigators want to push re-irrigating and starting up the irrigation system again. Because it has been out of action for seven or eight years, it is going to impose a lot of additional costs on irrigators to reinstate the irrigation system. Jim, would you like to expand on that?

CHAIR —Before you go on, how big a land area is this?

Mr Atkin —About 3,500 hectares in total. I am not sure whether that is the actual irrigated area or the overall area that is serviced.

Dr STONE —Why would you want to swap that for a stock and domestic system?

Mr Atkin —Just recently the Wimmera Mallee pipeline system was completed. That provides piped water to—

Dr STONE —So you do not need domestic infrastructure; it is in place.

Mr Atkin —No, we already have that in place. So the only channel distribution water at the moment is the irrigation system, should it be up and running once again.

Mr Delahunty —Carrying on from what Rob said in regard to the fact that we are actually willing sellers and want to present the water for sale, while we were in the negotiation phase with DEWHA—if you can call it a negotiation phase—the draft plan came out. It is not really a negotiation phase; it is a tender phase, which is very hard for us to deal with and unfair, but that is what we have to deal with. In the middle of that, the draft plan came out. The draft plan clearly says that there is no more water required for the environment in the Wimmera-Avoca region. We think they have made an error there. I am happy to give you copies of this if you wish, at any time.

Chapter 18 in the draft plan, which assesses the environmental water requirements for the Wimmera River terminal wetlands, draws heavily from a report which was done by the Ecological Associates in 2004. A lot of the Ecological Associates report has been transposed from that report directly into chapter 18 in a different format. One thing they did not transpose into the draft is a chart, a copy of which I have here. Again, I am happy to leave it with you. It has three sections: it fails to meet the objective, largely meets the objective or meets the objective. This is for getting water into Lake Albacutya and Lake Hindmarsh, which are the terminal lakes of the Wimmera River.

The enhanced flow scenarios here show that to largely meet the objective they need an enhanced flow of at least 80 gigalitres. The presumption would be that the 83 gigalitres that have been saved from the Wimmera Mallee pipeline are significant enough to meet the ‘largely meets the objective’ level. Unfortunately, of the 83 gigalitres that are saved from the Wimmera Mallee pipeline, only 45.6 gigalitres are destined for the Wimmera River. The remainder is destined for the Yarriambiack Creek flow. The Glenelg gets 22 gigalitres and Richardson River gets four gigalitres. The Waranga Channel is another nine gigalitres. It appears that they are only getting about half of what they think they are going to get. The chart shows that just 20 gigalitres make a big difference between failing to meet the objective and largely meeting the objective—from 80 gigalitres to 100 gigalitres. We are proposing that the Wimmera River does indeed need the water that the Wimmera irrigators have available to meet that objective.

CHAIR —You are the first one we have run into who is questioning the science. In that direction, you are.

Mr Delahunty —Okay, that’s sarcasm!

CHAIR —These are the sorts of things we have been looking for, and they are out in a lot of the catchments. There is water use efficiency here, there is environmental efficiency there, through engineering and other things. There are certain willing sellers. This is one of the issues—whether it is strategic, whether it is Swiss cheese, and all these things come into it. But there are willing sellers out there and some of them, we have found, are unable to sell for a whole range of reasons. Your case is different to some of the others. We cannot become your water broker but you could give the committee any detail that you can on that, because one of the things we will do in the report is try to identify examples where water is available. It would be valuable if you were able to put to a page together with that water account you just gave and we might be able to run that up. Obviously, there is always going to be hesitancy in terms of price, because if people see an open-ended process they will just keep leveraging the price.

Mr Delahunty —At the moment it appears we are locked out of the irrigator led proposal system totally, because the plan is suggesting that the water is not necessary. Our first step to get back into the negotiation phase would be to show them that the water is indeed required for the terminal lakes. I am happy to pass that information on to you at the end of this meeting or at some other date.

CHAIR —Thank you.

Mr Atkin —Also, not only us but other organisations within the Wimmera such as the Wimmera Catchment Management Authority, the Grampians Wimmera Mallee Water and other related environmental bodies have all picked up on, in different directions, a similar feeling to ours. I understand they have all made representation to the Murray-Darling Basin Authority.

Mr ZAPPIA —How many growers do you represent?

Mr Delahunty —There are about 220 irrigators in the system. As Rob said, it is a bit of the 80-20 rule: about 20 per cent of them hold 80 per cent of the water.

Dr STONE —You mentioned that 10 gigalitres from the Waranga channel was being earmarked for the Waranga?

Mr Delahunty —It is 8.9 gigalitres.

Dr STONE —Is it your understanding that that water therefore will end up in Bendigo and Ballarat through the pipeline?

Mr Delahunty —I have no idea where that water would go.

Dr STONE —I think that is the story, which is an interesting use of water which you thought you were committing to environmental flow.

Mr Delahunty —Perhaps you should chase that up. This comes out of the Ecological Associates report 2004. I am happy to email you that whole document. The answer for that may well be in there somewhere.

Dr STONE —I understand it is replacement water for 10 gigalitres, which is being taken off at Colbinabbin through what is called the ‘super pipe’—the goldfields pipe to Bendigo and Ballarat.

Mr Delahunty —That may be the case.

Dr STONE —I will check that.

Mr Atkin —I do know that, prior to the completion of the Wimmera Mallee pipeline, about nine megalitres per annum was available through the Goulburn-Murray system to supply towns on the eastern fringe of our Wimmera-Mallee region. It is managed by Grampians Wimmera Mallee Water. Whether that is related, I am not quite sure.

Mr Frankel —As the other two fellows have said, there is a unique opportunity here now where we do have a 100 per cent participation rate in the sale of a system. We do not know how long that will last, with the availability of water and the enthusiasm that we did have. We went down the path of the irrigator led proposal and achieved a 100 percent participation rate, so we have set in train the mindset of the irrigators that that would be fulfilled. We are so disappointed now that that seems to have changed with this draft proposal type of submission. We are hoping that that is not the case.

Dr STONE —Given that you have a stock and domestic alternative now in place for these irrigators, so they do not have to use part of their water sales money for that—and I am presuming the price you are asking has built-in adjustment and that is why you are asking more than market value for your water—what are the elements of your price that the Commonwealth found not appropriate or too much?

Mr Frankel —As you will probably be aware, it is very difficult to negotiate when a blanket response comes back that says just ‘not value for money’, when we have put in submissions and we have compared it. We stated the fact that water being purchased for environmental use is dramatically higher than what we were asked for. We have virtually compared our water with similar water in other areas. Whether that is the right or the wrong thing to do, I do not know, but that is the way we have done it. We have definitely come back substantially from what is being paid and is being agreed to being paid by both governments for environmental use water.

Dr STONE —About $2,400, for example, is what was being paid at the peak for the successful tenders for environmental flow.

Mr Frankel —And you are aware of the figures that we put in our proposal—substantially different.

CHAIR —It is just the water that you want to sell, not the land and infrastructure?

Mr Frankel —The water, 28,000 megs.

Mr Atkin —We have endeavoured through discussions to have a restructure or compensation component priced into the asking price but it has always been strongly stated that that has to be excluded, that they are only willing to pay for the water itself. That is why part of our proposal is for actual purchase of the water and then a small component, about $5.5 million, is for decommissioning of the system over and above the actual price of the water. So in a sense I suppose that is part of a restructuring package that we are trying to seek through DEWHA.

Mr Delahunty —On that pricing issue, DEWHA employed some consultants from Melbourne to price the water. Indeed, they spent a lot of time doing it. They came up to our area, interviewed a few of us and looked around. I think it took them about three or four months to come up with the conclusion and come up with their report. It took that long because DEWHA sent it back, they told us, at least two or three times. They used the words ‘they could not understand the methodology of the pricing’. Finally, when they got a report that they were happy with, they presented it to us. When we read the report, it was solely based on what they considered the water to be valued at for irrigation. They did not touch on what it was worth for the environment, and that is what it was supposed to be purchased for. Following from that, our level of security being about 72 per cent, water in New South Wales has been purchased for higher values than we tendered for at a similar level of security as in New South Wales. So it is a little disappointing that they have discriminated against us on the same basis. But then we ran out of time, and the plan came out and hit it all on the head.

CHAIR —Thank you for taking the time to come along. If you get that document to us, Jim, we might be able to help in some shape or other.

Mr Delahunty —Good.

Mr Atkin —Thank you for the opportunity to appear, Mr Chairman.

CHAIR —It has been a pleasure.

[3.35 pm]

CHAIR —Thank you ladies and gentlemen. That is the end of the formal submissions. A number of people want to comment. They will have to be relatively quick comments. Do not feel as though you have to make a speech about the history of a particular idea or solution that you may have. The important thing about this is that it establishes contact. So if someone has an idea that may work, we want to establish that contact. Obviously you cannot get everything said in a few minutes, but it does establish a link between us and the concept you are talking about. Because of the number of speakers, each of you will be confined to about four minutes. A bell will go at three minutes to indicate that you are on the final approach!

Mr Hackett —My concern was initiated when the Murray-Darling draft plan came out, with complete disregard for one of the most important aspects—the south-west of Victoria from the Grampians to the South Australian border and the south-east of South Australia are not included in the plan. That is a vital part of the health of the Coorong, which has been a major environmental problem with the Murray-Darling Basin. I see the solution is in South Australia and Victoria in that area. The water naturally gravitates through unconfined aquifers and confined aquifers until there is a rain event and then the surface water through Rainbow Creek and Mosquito Creek should end up going through to the Marcollat Watercourse that ends up in the Coorong and freshens up the Coorong from the right end. The top end of the Coorong is where the freshening should take place. It needs to be taken on board by the committee to include that area because there are huge amounts of drainage; I was on a subcommittee in South Australia for nine years and I still keep in touch with the people on that. You reckon this one is a hard one to crack, but you try to tell farmers to go from area based to volumetric and cop a water reduction—not easy. That was part of my role there.

The Coorong will benefit if, instead of diverting the water straight into the ocean and wasting it, they put it so that it firstly recharges the unconfined aquifer; and secondly, goes where it is supposed to go through Marcollat into the Coorong. That would make a huge difference. I am saying this because of my role as a consultant: from the Lachlan Valley to the Coonawarra and all along the Riverland, I see the problems cropping up. Perhaps I can offer a bit of a solution.

One of the things I see is that the plan does not seem to address groundwater enough. The network of underground streams within the basin is enormous and people are drawing water from that. The allocation there and the effect on the environment need to be looked at. The second wastage area is the lake systems of Lake Victoria, Menindee Lakes, Lake Alexander and Lake Albert. That can be fixed. The private enterprise in the Langhorne Creek area and surrounding areas stepped in and put in their own pipe systems when the lake failed to meet the water standards required there for stock and for viticultural production. The weir at Wellington would allow the lake to revert to what it used to be, and that is a salt lake. That should be looked at. The evaporation losses from there could be looked at cost wise to allow us in the long term to have deep-water storages in the mountains. The groundwater in the Lachlan Basin is well known. The Lachlan River—I do not know whether it has got to the Murrumbidgee yet through the Lachlan Marshes—but the groundwater used there is having an adverse effect on the Lachlan flows.

CHAIR —David, you might be able to send us the balance of that material and we will be able to include it in your evidence.

Mr Hackett —Thank you for the time.

Mr Scougall —I only put my name down here in case I did not get the answers I wanted to hear. Some of them have been brought up; some of them have not. I would like those of you who said ‘the buyers sold the water willingly’ to put out their hands and get smacked. We sold water and we did not have a gun to our heads regarding the government, but we had a bank that told us that this was an offer we could not afford to refuse. I think it was Sharman who asked: is there room for more advancement in agriculture, with water saving in mind, if grants were available? We, and I know others in our area, put in for grants under the Howard scheme for water savings. We had a group come in and do the presentation for us. It cost us around $9,000 to have it all prepared. I know of five other groups that did similar amounts of money and presentations. We seemed to get a form letter back that covered everything in one simple statement: ‘You did not help enough people with your format so we cannot supply the money’. No matter how many people we helped or what benefits accrued, that was the format answer we all got.

There was another question regarding the effects the zero allocation had on our farming. We were made an offer by a group who wanted to put a large dairy in the area. It was going to be a totally enclosed dairy where all the feed was brought to them. They had already purchased a large block of land and a lot of water, and their initial site for the dairy was rejected on the grounds it was too close to Swan Hill. They were referred to us, and they came and investigated our place, and spent 15 months making sure that water tables and everything else complied. They even went through the Indigenous side of it. They did everything in their power to get it through. At that stage there was a kerfuffle going on with the water industry. Our allocation was zero. We were told we were not allowed to pump. In the end, their backers said, ‘No, there is too much hassle with the water.’ The ones that put forward the initial project had worked out that they could still go ahead and make money on the grounds, even with the way the water was, but the backers said, ‘No; it is too big a risk, we will go somewhere else.’ The fellow confided in us later on that they had investigated a lot of areas within New South Wales, Victoria and Tasmania and could not come up with a better site. But that was their final answer.

With regard to river health, which we are all told is what the environmental flows are for: I was born in Swan Hill and I have lived here most my life—I spent my first 12 years over in the Mallee, but that is the only time I have been away from the river—and the sickest I have seen the river is in the last three months, when it has been under environmental flow controls. We have had blackwater that was so putrid that you could barely drink it—you would not drink it. The sheep did not even want to drink it. Fish were dying in it and the native crayfish wanted to get out of it. That was under environmental flows. If that is what all this is about, people need to wake up to themselves.

One other point was on water theft. Someone was asked whether knew someone who was involved. Yes, I do. We put in a system ourselves which involved a pump at the river which went through a subsurface channel across a floodway, and a second lift pump took it into our irrigation area. The agreement at the time was that the water on our land was our water. The fellow who was caught ‘thieving water’, as they termed it, was working on the premise that we were told that the water on our ground was our water. What they did not tell us is that they changed the rules in the meantime, and you had to have a flood licence to pump that water. He was fined and everything was sorted out and that was the end of it.

CHAIR —We might have to pull you up there, Geoff. If you have any other information, you are welcome to send it through to us.

Mr Scougall —Thank you for the time.

CHAIR —Jeremy Morton.

Mr Morton —Thank you for coming back to Swan Hill and thank you for the opportunity. I wanted to speak to you about the federal government’s approach to recovering water for the environment. The way I see it is that there are three basic ways they recover water. One is a buyback, which is a fairly cheap and quick way of recovering water. It can also be extremely damaging. There is a buyback with some sort of efficiency measure as well. Then there are efficiency measures such as investing in infrastructure, which is extremely expensive and fairly slow to return the water and there are significant risks of that investment becoming redundant if irrigators sell the water that that infrastructure was put in place to serve. A bit of background: I am one of a group of irrigators west of Moulamein who were sitting around a campfire on the river in Easter 2008 and decided we would approach the federal government and see if they were interested in purchasing our water and closing down the irrigation system that supplied us. That was Easter 2008. In August, we met with the then department head, James Horne, and with Colin Mues and discussed our proposal with them. They thought it was a great proposal and they said, ‘At this stage we have not got any way of dealing with this, but leave it with us’. In October that year, the irrigator led group proposal program was initiated. At about the same time we had the Prime Minister at the time, Kevin Rudd, put out a press release in which he said that he would work with irrigation communities to buy out water entitlements from areas willing to move out of irrigation, facilitated by a price premium reflecting the value of water savings from closure of infrastructure, such as supply channels. A fair bit has happened between now and then. At this stage we have a draft contract from the federal government to purchase our water. It is nearly three years since we initiated this process. They agreed to purchase it in July last year, but we still have not got to the finalised contract stage. We started off looking for a price of around $2,100 a megalitre. Along the journey the price has deteriorated significantly and—excuse the language—we have ended up with one pretty shitty deal. The result is that the 13 families who were originally involved are now five. The amount of water is about 40 per cent of what was originally proposed and the number of channels obviously is significantly less as well.

Dr STONE —How much water?

Mr Morton —It was about 40 per cent less than the original proposal, which was about 40,000 megalitres.

CHAIR —Forty gigs?

Mr Morton —Yes. I will not submit what I am reading out today, but I will make a submission which I will send on that will fill you in on some more detail. Obviously, I think there are some real benefits to these efficiencies from buybacks, but at this stage there is no premium to reflect the implications of disconnecting from the system. I think they need to revisit. Buybacks and water infrastructure upgrades and efficiencies from that are inextricably linked. This is especially the case when you have gravity irrigation schemes like Murray Irrigation and Goulburn-Murray Water. You have already identified the Swiss cheese effect of buybacks and how their indiscriminate nature causes heaps of problems for irrigation companies and the remaining irrigators. One of the other things it does is that any of the efficiency upgrades that government or irrigation companies invest in is at risk of being redundant if irrigators in the future decide to sell their water. If the Basin Plan aims to recover the volumes that they are suggesting, I think the indiscriminate buybacks need to change immediately, and the future of group schemes like MIL and Goulburn-Murray Water will be sealed. That future is one of many years of painful adjustment which could result in the ultimate demise of some irrigation companies and the people they service. The government should feel extremely uncomfortable with these perverse outcomes. The government needs to understand that it needs to pay a better price for groups of irrigators wishing to close down. All our discussions with government have been about cost—it is all about value for money and the taxpayers of Australia. While it might outwardly appear to be a good deal for taxpayers, it is placing an unacceptable burden on a small but vital part of the Australian community.

CHAIR —Jeremy, if we keep going over time we are going to have to cut people off at the end, because we have to be out of here.

Mr Morton —Thank you.

CHAIR —If you follow that up, though, I would be very interested in seeing the documentation in terms of the Moulamein and the 40 gigalitres. Glenn Stewart.

Mr Stewart —Thanks very much, Tony, and thank you for coming to Swan Hill. I am handing out a precis of my presentation, which I will quickly go through. We heard from the Mayor of Swan Hill about the $1.2 billion worth of GDP output out of this particular region. I want to draw your attention to the underlying social issues within this community. I think it is very important to your inquiry. Swan Hill LGA is ranked 10th highest in the state of Victoria for social disadvantage; that is the SEIFA index, which measures the community’s vulnerability. It compares 1,474 suburbs measured across Victoria. The state’s Robinvale and Swan Hill suburbs are in the two most disadvantaged deciles. In other words, 80 per cent of Victoria is more socioeconomically advantaged. Tony Vinson—as Vernon Knight mentioned earlier this morning—has identified Nyah, Nyah West and Lake Boga in his report Dropping off the edge as among Victoria’s 40 most socially disadvantaged communities.

I work for LLEN—Local Learning and Employment Network—which the Victorian politicians will know. Twenty-three point two per cent of the municipality of 15- to 19-year-olds were disengaged, according to state figures, compared to an average of 15.4. We have a higher rate of absenteeism amongst our young people. In terms of a couple of things that Michael was alluding to in his first question this morning, between 2006 and 2008 the Swan Hill/Kerang/Balranald communities had the highest rate of suicide in Australia—28 suicides in 28 months—so much so that the town hall had 700 people when Jeff Kennett came to talk about that. The Healthy Minds Network has done an enormous amount of work on that. So, well spotted, Michael. In 2007-08 the Swan Hill Rural City Council had more than double the Victorian average of family incidents, including higher rates of family incidents where charges were laid and where an intervention order, or an IVO, was applied for. During 2006, 9.8 per cent of all confinements for Swan Hill Rural City Council were to teenage mothers—women under the age of 20 years. What shocked the Victorian cabinet about this was that 65 per cent of young Indigenous mums in Swan Hill aged 15 to 19 were single mums.

One of the key statistics I want to talk to you about now is in the table that you can see in front of you. In 2009, the Swan Hill LGA had the lowest Year 12 attainment and completion rates, or equivalent, in Victoria, at 53.7 per cent. COAG has set that target in 2015 to be 92.5 per cent. One of the saving graces is that we have one of the highest VET participation rates per capita in the state. Where am I taking you? What is going to happen here if we have an economic downturn? We know young people are affected by that. Michael, you were talking about that before. Young people, apprentices or trainees, are the first people to be affected by those sorts of economic downturns. We have to be really careful about that.

We are highly exposed in this community to any changes in the Murray-Darling Basin Plan because we have one of the lowest attainment rates and we have pathways for our young people into that VET area. If we do get changes to water policy, we believe it will dampen economic activity and threaten the future availability of apprentices and traineeship opportunities in the region. As the economy slides into recession, we have noticed over the last six weeks in Swan Hill a two-tiered economy. Sussan, you asked whether there was any study linking early childhood. Margaret Alston’s work with Charles Sturt University is a great piece of work. It looks at seven different communities in the basin, and Gannawarra is one of those. We should also be looking at the NBN opportunities; the black spots area. This is occurring now. It will be functional by September this year.

CHAIR —Glenn, I have to stop you. You can submit some extra material. We are trying to give everybody a go.

Mr Stewart —Sure. Thank you.

CHAIR —Roger Schifferle.

Mr Schifferle —Basically, the science stinks. Someone started with the answers they wanted and then worked through someone else’s figures. No science has been done at all. For the record, they did not know what their salt was when they were talking to you—the Balranald gentleman. In the 1970s when I was farming they used to broadcast every morning the parts per million. When it was over 300, the orchard guys were told not to pump. We are now pumping from the saltiest part of Australia—pumping the flood water off—and it is below 100. The farmers themselves cleaned up their act long ago. There is no need for this.

As far as the woody weeds the Balranald gentleman spoke of, when Major Mitchell came through here there were three trees between Swan Hill and Nyah; that is 60 miles of river. To the south of Swan Hill on the Little Murray there were none. These have planted themselves since the introduction of the levy banks. They are toxic. When they were pumped through the Barmah Forest, they killed every fish in four major rivers here. This is this year. This is the first time in a major flood there has not been a breeding bonanza of birds. We usually have six different types of arctic terns nesting here and millions of swans. This time, nothing. This is the first time it has happened.

The black water event is not natural, neither are those trees to this area. You get more biodiversity along the old Murray if you go out to Wakool and Marren where there were platypuses. There never will be again. The millions of frogs in the cracks you will never see again. I was a professional fisherman for many years. I know that this stuff lasts in the mud for 30 years in some places. You will not wash it out. You have done more damage than has ever been done to the river. That is all.

CHAIR —Thanks Roger; I appreciate that. Doug Harris.

Mr D Harris —I have a prepared statement here which I will read, ‘The Murray-Darling Basin Plan—a social, economic and environmental disaster’. The negative direct and indirect aspects of the plan on agriculture and business activity in the community are indisputable. However, I wish to make three further points. First, the plan deals with actions but not consequences. If we grow and lock up more and more forests and water them periodically with environmental flows, two inevitable consequences will be more frequent: severe bushfires and more severe fish kills. Unprecedented fires and fish kills have occurred recently with enormous social, economic and community impact. They are blamed on climatic or natural factors, conveniently absolving governments and authorities of any responsibility.

Any plan that focuses on one aspect of the environment without considering and taking responsibility for the full environmental, social, economic and community consequences is fatally flawed. Secondly, if the plan purports to preserve the natural environment at the expense of man-made changes, such as using water for irrigation, one obvious option for saving water is to remove the barrages. The barrages have changed the natural environment since 1940 so that we are now being asked to sacrifice limited water to maintain a man-made freshwater lake system. In a world in which hunger is increasing, the question is: is tourism more important than food production? We are now being told that Australia may become a net importer of food. Why? It is because environmentalists want to increase their stranglehold on land and water to limit and prevent economic development. That is just simply not good enough. It is about time we woke up.

Thirdly, some environmentalists are claiming that our current floods are due to global warming. If increasing temperatures will increase rainfall—although some environmentalists have claimed that the opposite is true—a more urgent need might be flood mitigation than watering dry forests. We really need to understand the environment before making drastic changes to it. The undue haste to adopt the plan suggests that the Murray-Darling Basin authorities are not confident of the permanence of the dry trend of recent years but want to seize the opportunity to permanently reduce irrigation.

Finally, it is imperative that a full cost-benefit analysis of the plan, if it ever goes ahead, be undertaken that gives equal weight to the social, economic and environmental factors impacted. A half-baked, dislocated plan, such as is being proposed, is a disaster just waiting to happen. Such a cost-benefit analysis cannot have been done if so many factors have not even been costed. In research, the key to deciding whether to go ahead with a project is simply whether the cost-to-benefit ratio is suitable. The benefits need to outweigh the cost by a considerable margin. In the case of this plan, the cost and the benefits have not been fully assessed, and that is a disgrace. Mr Chair, I would strongly recommend that this plan be thrown out. Thank you.

CHAIR —Thank you, Doug. Peta Thornton?

Ms Thornton —Thank you for the opportunity to speak. I grew up at Nyah, near the Murray River, close to the Nyah and Vinifera Forest. I only spent time away during my university years in Melbourne, and came back to live in Swan Hill to work in various organisations with an environmental background. Then I fell in love with a farmer and started helping him grow stone fruit at Waraneen. That is cutting a long story short, I guess. Now we raise three children together. Over the years, back in Swan Hill, I have volunteered for many community groups in the area, but today I am speaking on my own behalf. In contrast to the other witnesses, I welcome the Murray-Darling Basin Plan and its obligations and aims to regain the health of our rivers and the environments associated with them. I decided, rather than refer to studies and science, which you have plenty of, to speak from my own experiences, and I will try to speak very honestly.

After witnessing our local red gum forests flooded most years during my childhood, over the past 15 years we have seen very few floods. This was due to drought but, as I understand it, also due to changes in water policy. When water rights were allowed to be bought and sold, many megalitres of water that were previously unused were then able to be sold, which led to a net increase in water use and basically left less for the river. A basic understanding of red gum ecology tells you that this is a problem because it is a cycle of flooding and drying in different levels. It is not as simple as saying there are thousands of red gums coming up in certain areas and, therefore, red gums are in a healthy state. Driving through the region from Swan Hill to Mildura over the past 20 years I have often wondered how there is any water left flowing down the river, with thousands of acres of development, MISs et cetera. There is a limit to what our environment can provide. Over the ages, societies have been made and broken over how water and other resources are used.

As a farmer, I feel it is a privilege, not a right, to farm here in the Murray-Darling Basin. For me it is important to grow clean food, quality produce, efficiently, but not at the expense of our magnificent river. I understand that what I do on the farm has an effect in other places. We have approximately 160 acres of land, and only 218 megalitres of water, with which we grow stone fruit. Our farm supports three families. Whilst the last years of drought have been tough, water trading has given us the opportunity to grow our business using temporary water purchases when needed, and now the new Goulburn-Murray water system gives us tools to plan with carryover et cetera.

In many ways, the onset of water trading brought new wealth to entitlement holders, flexibility in being able to choose to sell and not grow year by year, options for diversification and retirement and during lower allocations—we have a small allocation—to increase our yield and income. As some of the studies also suggest, during the time of drought, yields were still the same. On farm we use drip irrigation and soil moisture monitoring tools, but we plan to spend more on that in future years. We do feel the pressure to get bigger, but this is due to commodity prices and cost of production rather than being allocation-driven. This is a trend that can be seen in dryland farming as well as irrigation. So it is not just because of the Murray-Darling Basin Plan. I am not saying that farmers have not seen it tough but after doing a crude survey of the cars that drop off children at my school, farmers are doing a lot better than some of the others at the school down the road. We also have the benefit of exceptional circumstances, which is not afforded to other businesses.

Our great rivers are our lifeblood. As an Australian, to just say, ‘Murray-Darling Basin’ moves the spirit. Not to do something if our rivers are sick is like not affording your mother treatment when an oncologist tells you she has cancer. Please do all the infrastructure works that can be done not only to make our system more efficient but also in order to sell this plan.

CHAIR —Peta, we might have to wind you up there.

Ms Thornton —Thank you.

CHAIR —My wife made the fatal mistake of marrying a farmer too; I know how you feel. Thank you. Neil McFarlane?

Mr McFarlane —Thank you for the opportunity to speak. I am going to speak in fairly general terms. I was born in this town and have spent most of my working life on a dryland farm close to the Murray. I have been involved all my adult life in many aspects of agricultural and environment management locally and also spent 3½ years as an adviser to a Victorian government department on a wide range of land management and environmental matters state-wide. I continue these interests in retirement.

To me it seemed logical that the Murray-Darling Basin should be managed as an entity in cooperation with state and federal governments. The situation in the past has seen the states operating more like separate countries than parts of one nation. That is probably an artefact of our history. This sort of self-interest has to stop. The public deplores the present state of rivers, forests, wetlands, water quality, insecurity of water supply et cetera, and usually blames ‘they’ or ‘government’. The problem is actually us—all of us—and our demands, management and exploitation of the resource.

We obviously cannot turn back the clock completely by removing dams, weirs et cetera. We have to recognise that we have exploited the basic environmental resource to the limit. Before European settlement, 100 per cent of the run-off from the catchment in any year was available to the riverine environment and flood plains. About two years out of three saw some level of flooding beyond the main channels somewhere in the system. Now, even in the better water catchments, that flooding may only occur one year in 10. A system evolved over a millennium cannot readily adapt to or cope with the massive change in the water regime which has taken place in the past hundred years.

No flooding equals red gum forest decline, loss of temporary or permanent wetlands, weed invasion, loss of aquatic species, loss of all sorts of biota from insects to frogs and birds and mammals—in fact, loss of industry; that is, forestry and tourism; loss of amenity, landscape, wildlife, recreation value such as fishing and boating, to name some. All of this is due to over-exploitation of the primary resource: water. Governments have been criticised for buying water rights for environmental purposes, though this is essential if you want to keep the riverine environment alive. It cannot help if the water is not available. Governments have also done something that, in my view, is monumentally stupid, which is to allow this national asset, water, to be privatised.

I am not saying that water should not be saleable or traded; I think that is very necessary. But I believe that water is one asset that no country should ever privatise. The result is that many water rights which are seldom or only partially used are now fully drawn upon every year—and that was touched on by an earlier speaker or two—providing there is water available, and used by huge irrigation operators that are totally dependent on it. Much of this development locally over little more than 10 years seems to have occurred with no strategic planning whatever, but grew due to ready availability of cheap land, commercial trading of water, tax incentives and private and corporate money looking for long-term investments. It is entirely dependent on water security. It is not even clear whether these crops are the most economically efficient long term, though I have no indication that they are not. Some local landholders have profited handsomely by selling. Others are left with the legacy of vastly inflated land values and thus rates and management problems due to chemical use vis-a-vis the places adjacent.

CHAIR —Thank you, Neil. You might send us a bit more material if you have it. Peter McClusky?

Mr McClusky —Thank you, Mr Chairman. I represent the National Aglime Association and the Victorian Limestone Producers Association. Essentially both organisations have the same ideas about this situation. The National Aglime people are essentially down the east coast of Australia and selling into the basin and the Victorian people are basically along the south coast and some sell into the basin area. I submitted a paper on this, but I will just speak to a couple of the points. The NAA wishes to submit that, according to the Guide to the Basin Plan, 30 per cent of Australia’s food is produced in the basin area and 40 per cent of farmed land is in the basin. Much of this land is subject to acidification, for which agricultural lime is an important soil ameliorant which can increase productivity by around 20 per cent. In other words, we have a commercial interest in this, but we also believe we are making some suggestions in the national interest, not of a technical nature, that may have been reiterated elsewhere but are coordinated here.

The importance of a healthy basin for food security must be maintained. The Water Act 2007 gave priority to environmental flows ahead of economic and social. In view of the above, NAA maintains that economic flows need to be treated at least equally to environmental and social in an amended Water Act. More dams need to be erected to capture excess water during peak flows, using money allocated for buy-backs. The water would then be available for environmental flows in dry periods, once the science has been worked out correctly. Dams, weirs, locks, irrigation channels and irrigated farmland have massively expanded wetlands. Cutting economic allocations would mean reducing the benefits to wildlife and the environment. As farming in the basin reduces as a result of permanent economic allocation reductions, the viability of towns and regions in the basin would decline and add considerable stress on the infrastructure of areas the basin population would seek to relocate to. NAA would be pleased to provide more information as required. Thank you.

CHAIR —Thank you, Peter. That draws to a close today’s proceedings, ladies and gentlemen. I thank those who have spoken today, those who have attended and those who are interested.

Because this is our last public hearing before we start drafting up the document, I would like to thank the people in the catchment for the way in which they have received this committee. We have been to most of the places where the authority has visited, and the difference in the reception has been quite incredible. We appreciate that because we appreciate that there was quite a degree—quite rightly, in my own private view—of angst in terms of the way the document was presented and the fairly brutal impact that, it was fairly plain to see, could occur if in fact the document was implemented as an eventual plan.

There are a lot of people out there who are still very concerned. We believe there is a way through this. It will mean some change, but not great pain, as has been suggested. The document said that entitlement holdings would have to be cut to achieve the 3,000 gigalitres. That number today is about 2,000, because of the buy-back arrangements and other things that have happened in the last period of time. So there have not been any entitlement cuts take place, even though a third of the target has been reduced. The people here today have talked about the things such as water use efficiency, environmental water use efficiency, on-farm efficiency, evaporative savings, some modifications to overbank flows and all of those issues. Then on top of that are strategic buy-back and other methods, and we still have not got to entitlement cuts. Someone made the point today that no government has said that it is going to acquire your water—so if you don’t want to sell your water, don’t sell it. No government has said it is going to come along and take your water but, unfortunately, that inference was left—people thought someone was going to turn up at their door and actually take away their water that they were legitimately given in terms of their entitlements from various governments.

We do appreciate the way the committee has been received, so thank you. And thank you, John, for the work you have put in. You can be very proud of the Wimmera Mallee pipeline. I know it is dear to your heart and it is a water use efficiency measure. We thank you for the information that you have imparted to the committee, both privately and publicly. Thank you, Hansard; thank you, secretariat; thank you, ball boys. We will go away and do the hard work over the next few months and, hopefully, you will not be disappointed. Thank you very much, ladies and gentlemen.

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 4.20 pm