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Tuesday, 20 November 1973
Page: 3508

Dr PATTERSON (Dawson) (Minister for Northern Development and Minister for the Northern Territory) - I move:

That the Bill be now read a second time. The purpose of this Bill is to provide legislation enabling the Australian Government to make a non-repayable grant of up to $5m to the Queensland Government to assist in the construction of the Kinchant Dam near Mirani in North Queensland. The Kinchant Dam will provide the main water storage for the Eton irrigation project, a scheme which will stabilise sugar production in an area highly susceptible to drought. It will also provide for future expansion of sugar production in line with market opportunities. Water will also be made available for intensive beef production on improved tropical pastures and the storage will be of considerable value to the local communities and tourists for recreational purposes.

The total cost of the project was estimated in February 1973 at $10.15m. The balance of the cost of the project will be financed by the Queensland Government. The project as a whole will comprise: Mirani Weir on the Pioneer River, with a storage capacity of 2.5 million cubic metres (2,000 acre feet) and estimated to cost $868,000; a pump station of 6.4 cubic metres per second (225 cusec capacity located adjacent to the weir, and an open diversion channel 5.25 kilometres (3.25 miles) long to convey water by gravity to the main storage, estimated to cost $955,000; Kinchant Dam on the north branch of Sandy Creek, with a storage capacity of 48.1 million cubic metres (39,000 acre feet), and estimated to cost $5,047,000; and irrigation and ancillary works comprising two main channels, distribution channels to farms, four pumping stations and associated distribution systems and drainage works, estimated to cost $3,280,000.

The Kinchant Dam will be located in a proven and established agricultural region with significant scope for increased efficient production. The region has been plagued, however, by recurring droughts and the absence of conserved water has seriously limited stability and growth. Fluctuating production seriously affects not only farm incomes but also the efficiency of operations of sugar mills in the area, especially the North Eton sugar mill. The proposed scheme will enable cane growers to stabilise production and to meet additional over-peak allocations. Unit milling costs would consequently be reduced and additional 'benefits to growers can be expected through the distribution of increased mill profits from the co-operative mills of North Eton, Marian and Racecourse. In the first stage of development of the project, water will be supplied to sugar cane growers on 137 cane assignments totalling some 5,100 hectares (12,600 acres) and to beef producers on 890 hectares (2,200 acres). The second stage will enable an expansion of irrigated cane on a further 3,140 hectares (7,550 acres) of assigned land.

An economic evaluation of the project has been carried out by the Bureau of Agricultural Economics. This evaluation examined the impact of the project from the national, regional and the individual farmers' viewpoints and the report on the project comments favourably on all aspects of its economic impact. The evaluation was based on conservative estimates of long-term sugar prices. For example, on the basis of a conservative longterm price estimate of £55 sterling c.i.f. London per long ton and sugar yields averaging 4.9 tons per acre, the return to capital was calculated at about 8 per cent per annum. On the other hand, based on an average London Daily Price over the past 18 months of about £85 sterling, the return would rise to about 14 per cent per annum, while at present world prices of around £100 sterling, the return to capital would be about 17 per cent per annum. It is estimated that annual additional sugar production arising from the initial development will be about 17,300 tonnes (17,000 tons) valued, on the basis of the average level of returns for the past three seasons, at between $1.7m and $2.0m. It is estimated that, at full development, the total additional sugar production from the scheme will be about 46,100 tonnes (45,350 tons) per year, valued at $4.6m to $5.4m, again on the basis of the average level of returns for the past three seasons.This would rise to almost $7m based on the current level of world prices.

The Eton project will significantly improve social and economic conditions in the area. The Bureau's regional analysis showed improvement over the national results; indeed it identified considerable regional monetary- and non-monetary benefits. In addition to stabilis- ing farm and mill peaks, employment opportunities will be created in connection with the capital works and farm and mill activities. The projected annual value of these benefits will be nearly Sim under stage 1 and about $1.5m at full development. The evaluation also showed that the project area would derive substantial net benefits. The project will be a major factor in helping to stabilise incomes in this established area. It is in the long-term national interest to underwrite our sugar marketing commitments by means of stable production levels. Our irrigated cane fields - and in this respect I would also mention the Burdekin delta - are among the most productive in the world, and the Eton project will assure an annual supply of at least 75,000 to 80,000 tonnes of sugar for export. The environmental study reported favourably on the proposed scheme. It is anticipated that no animal or plant pest species is likely to be introduced or that water quality in the Pioneer River is likely to be impaired. In addition, the storage created by Kinchant Dam will provide a facility for aquatic sports and recreation, and will encourage tourism.

This Government is committed to a program of continuing support for soundly-based water conservation projects in established and proven areas. The Eton project, for which Kinchant Dam will be the main storage, will fully meet these requirements. I commend the Bill to the House.

Debate (on motion by Mr Bonnett) adjourned.

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