Following is Barnaby Joyce’s keynote address to The Quest for Water Efficiency Conference, hosted by the Committee for Economic Development of Australia, Melbourne, 12 June 2013:
Keynote Address: Politics and Water Policy
You can’t understand water unless you understand politics. This is true the world over. The Chinese character for “politics” is derived from root words meaning flood control.
Water is political because it has all the elements that make politics real for people. It involves competing uses, trade-offs, it does not respect state or international boundaries and humankind has been engaged in a centuries-long battle to control water flows against the random destruction of nature.
All of those elements have been in place in Australia over the past decade, as we have swung from our worst drought to the most destructive floods in our history.
Today, I want to argue that while we have got many things right in this country, the politics of water has at times let Australia down in the management of its water resources.
It has become fashionable to talk about the “consumption” of water, mostly in reference to its over-consumption. Indeed, in the Murray-Darling irrigation is referred to as a “consumptive” use of water, in comparison to the environmental uses of water that are apparently more benign.
We use the word consume without thinking too hard about its relevance to water. Water is not like other products or commodities. Burning coal means there is less coal to use, refining oil brings us closer to peak oil but using water does not reduce the amount of water there is in the world.
We only have one allotment of water, and that was delivered to us 4.4 billion years ago. There is no more water being created or destroyed. As the author Charles Fishman has observed, every glass of water you drink has had a rich history, most likely it has been through the digestive systems of dinosaurs, other animals and perhaps other humans before arriving in your glass.
So water cannot be used or consumed, and it is misleading to prosecute rice growers, cotton farmers or urban gardeners as consuming too much. The problem with that analysis is that it implies that the use of water to grow rice in Deniliquin, takes water away from people being able to water their garden in Melbourne but that is not the case.
Like politics, all water policy, is local.
Pointing this out does not mean there is not water scarcity in some areas, or that there are not competing uses of water. But what is important is that the lessons and issues regarding water in one area cannot easily be translated to other areas.
Murray-Darling
The Murray-Darling debate is a perfect example of this. There is a too common view that the Murray-Darling is a system of interconnected garden hoses. There is a misconception that you just need to add water to fix the Murray-Darling’s problems and it doesn’t matter all that much where that water came from.
It was most evident in the controversy that engulfed Cubbie Station for many years. Queenslanders were blamed for the problems of the Lower Lakes. And the reverse was true too. The Lower Lakes were blamed for all of the problems of the Murray-Darling.
Cubbie is just 200 metres above sea level; it is more than 1500 kilometres from the mouth of the Murray. Water that travels from Cubbie to the Great Australian Bight must travel this entire flat distance over sun-drenched areas and thirsty plains. The CSIRO estimates that, in normal conditions, just 18 per cent of the water from the Balonne system, where Cubbie is located, makes its way to the mouth of the Murray.
It reached its zenith when the Adelaide Advertiser declared on its front page that the 2011 Brisbane floods had led to three years of water being wasted! The claim was that the floodwaters that had flowed into Moreton Bay could have been put into the Western Corridor pipeline, sent up the range to Toowoomba, put in the Condamine and magically meandered its way to South Australia.
Putting aside the laws of physics, the laws of irony were breached first. Here was an article arguing that water was being wasted because it was left to flow out to sea near Brisbane, when it could have been, at great cost, sent more than 2000 kilometres away, to … flow out to sea near Adelaide.
Such thinking has real policy outcomes too. It has led to some disastrously wasteful decisions on water recovery in the Murray-Darling. For instance, the government spent $23 million buying Toorale station, shutting down 4 per cent of Bourke’s economy and 10 per cent of Bourke’s rating base. Barely any of the water from Toorale has been delivered to the environment because an environmental assessment conducted after the purchase concluded that the water storages could not be removed without damaging the wildlife that rely on the artificial water storages to survive. As reported by The Australian, Toorale has effectively become Australia’s biggest and most expensive birdbath.
Like in the Toorale purchase, too often governments ignore the wider economic and social costs of their decisions. This should be no surprise. Governments are simply maximising their returns like anyone else would. So it should be no surprise that when water needs to be recovered they would choose the cheapest option available.
There are really two options to save water for the environment in the Murray-Darling.
First, we can buy the water back from licence holders, take the water out of production and return it to the environment. This option does reduce water use in rural Australia. It will reduce food production and mean fewer jobs and economic development in regional towns.
Second, we can invest in more efficient ways of using water, thus being able to return water to the environment without reducing the amount of food produced or regional economic activity.
Water buybacks are cheaper. They typically cost about $2000 per megalitre, whereas infrastructure investment can cost anywhere from $2000 to $5000 per megalitre.
So it should be no surprise that a cash-strapped government has gone for the cheaper option. So far Labor has invested just 10 per cent of the funds available for water infrastructure investment. In contrast, it has spent 70 per cent of the funds available to buyback water.
The Coalition believes that this approach is too skewed. Governments should be made to consider the wider economic and social impacts of their decisions. If society would like to take 2750 gigalitres of water out of agricultural production, then it should be willing to face up to the full social cost of that change, including the loss of jobs and regional development.
Requiring at least some of the water recovery to come through infrastructure investment makes governments face up to those costs.
That is why the Coalition has proposed capping water buybacks at 1500 gigalitres. The government has already recovered around 1250 gigalitres through water buybacks. That means that the maximum additional buyback that Murray-Darling communities would face would be an additional 250 gigalitres.
It should be noted that this is the government’s own water recovery strategy too. At the moment, they plan to get 1500 gigalitres of the required water through buybacks. It is just that the Labor Party, unlike the Coalition, will not commit to this target.
Last year, the Coalition tried to amend some of the legislation enabling the Basin Plan to insert this cap as a legally binding rule. The Government did not support us, and neither did the country independents, Tony Windsor and Rob Oakeshott.
We believe that a cap on buybacks will provide the 2.1 million people who live in the Murray-Darling Basin the certainty to get on and plan for their futures. While the threat of future water buybacks is there, that cannot happen.
We are constantly told that there are enormous opportunities for Australia to export food to the rising middle class. Given that the Murray-Darling produces 40 per cent of our agriculture, that area has to be part of any strategy to boost exports to Asia.
How will we take those opportunities though if we won’t give agricultural communities the certainty of how much water will be available for productive use? How much mining investment do you think we would attract if we said, we will sell you this tenement but we will decide annually how much coal you can export each year, and that amount may change depending on the political environment of the time?
This is especially so in water where many people have lost trust in this government to manage the $10 billion the Coalition put aside for the Murray-Darling in 2007. In 2011, a bi-partisan committee, chaired by Tony Windsor, concluded that:
The Committee heard of grave mistrust of this department across Basin communities resulting from the failure of the department to identify and respond to community concerns on a range of issues. In addition, this department has demonstrated a consistent failure to deliver water programs, including strategic water buyback, which is in the best interests of productive communities. This department should no longer be responsible for delivering these programs.
Remember that this comment was not a partisan one; it was signed off by Liberal, National, Labor and Independent members. It is often remarked that overseas investors have a more positive view of Australian agriculture than domestic investors. But if they can’t trust their own government, why would they invest?
Northern Australia and Dams
In my view the same blindness to economic and social impacts has contributed to the fact that Australia has not built a dam for more than 20 years. Bert Kelly once remarked that every time he heard funding for a dam announced, he could feel an election coming on. You could almost say the reverse now. Every time you hear a proposed dam being scrapped, you can feel an election coming on.
There are some good reasons why we are not building more dams in the more developed parts of Australia. For one, where we have developed the best dam sites have been taken. For instance, this was evident in the Queensland Government’s proposal to build a dam at Traveston on a geological fault line in an area that would have delivered a dam with an average depth of only around 5 metres. A more than $2 billion cost for a yield of only around 100 megalitres was not value for money.
But there have been some very poor reasons why we have not built dams.
Another reason we have not built dams is because we were told that it would not rain again thanks to climate change. Those predictions have been far off the mark, and a study the other day now claims that climate change will lead to more flooding in the Murray-Darling not less.
Another of those reasons is that we have not looked at the local costs and benefits of building dams. As I said above, all water issues are local issues. But we have been too ready to take the advice on dam building from other countries, or more developed areas of Australia, and apply them to the entire country; such as when areas of our country that are not as developed still have lots of potential for a variety of water supply options. No one option, be it dams or something else, should be pre-emptively vetoed.
That is why the Coalition established the Dams and Water Management Task Group that I am the Deputy Chair of. That group has travelled to every state and territory in the country looking at potential sites and investigating water supply options. A leak earlier this year suggested that the Coalition is going to build 100 dams but we are not about to let 100 flowers boom.
More than 100 potential dam sites have been suggested to us but only a fraction of these will ever be built or even considered. Some of the suggestions are just ideas, others are more substantial but have not been looked at since the days of Surveyor-Generals and Public Works departments. A lot more work will need to be done on most before a dam can be built. All the more reason we should start now.
Water is wealth and dams put water away when it rains to ensure that it is available in drier times. Dams throughout Australia help produce Australia’s food, support towns and communities, produce the majority of Australia’s renewable energy, act as an essential input to our manufacturing and mining industries and help mitigate the impacts of floods.
Australia experiences a highly variable rainfall climate and therefore the use of dams to moderate the impacts of this cycle are more important here than in most other countries. For example, Melbourne’s water supply system has 10 times the per capita storage volume of London’s water supply system for this very reason.
In 1980 Australian dams could hold enough water to supply Australia’s water needs for almost seven years. Today, our dams can hold enough water to store less than six years of water supplies. If no new dams are built, Australia’s storage capacity will fall to below four years’ of supply by 2050.
The Coalition will announce its response to the work of the Dams task group closer to the election but some early findings are clear.
Australia can make better use of its water resources. While Australia is the driest inhabited continent in the world, more water is available for use per person in Australia than in North America, Western Europe or Asia.
Australia uses just 6 per cent of its available water, compared to a world average of 9 per cent. Most of that water use goes to produce food and Australia produces enough food to feed 60 million people worldwide. If we increased our water use to equal the world average, Australia could feed almost 100 million people — even before accounting for any future increases in agricultural productivity.
But doing so will take the real vision to invest in our water resources to help the world deal with the future food task. The world population is set to grow by more than 2 billion people in the next half century. As a result, world cereal production will need to increase by three 3 tonnes a year and meat production would need to increase by 200 million tonnes per year.
Achieving any substantial increase in Australia’s agricultural production will need to involve investment in more irrigation. Irrigation generates 50 per cent of Australia’s agricultural profit from less than 2 per cent of our agricultural land. Irrigation produces food more efficiently and in doing so benefits the environment because more food is produced using less land.
That is not to ignore that too much water is used in some parts of Australia. As discussed earlier, over a number of decades, water has been over-allocated in the Murray-Darling, more than 40 per cent of the water available in the Murray-Darling is used for productive purposes and that will be reduced to 33 per cent after the implementation of the Basin Plan.
The level of water use in the Murray-Darling cannot be compared to undeveloped parts of Australia, and any attempt to do so is a gross distortion of the facts. For instance, just 5 per cent of our water resources in northern Australia are used, even though 60 per cent of Australia’s water falls there.
In the north of Australia there is significant potential for new water storages.
Those that are anti-development often claim that the soils in northern Australia are too poor, as if anywhere north and west of Brisbane must be a desert. This is simply incorrect. The CSIRO estimates that there is between 5 and 17 million hectares of arable soil in northern Australia. When the task group visited Go-Go Station in Western Australia, we were advised that there was 100,000 hectares of blacksoil on this property alone.
To put these figures in context, Australia only irrigates 2 million hectares across the entire nation.
The Ord is already expanding to more than double its area under irrigation, and future opportunities may lie in the West Kimberley as well, although these will be further away.
In the Northern Territory there are opportunities to expand the use of groundwater. The Northern Territory’s groundwater resources are poorly understood, and it would appear that the current approach errs on the side of caution because of this lack of knowledge.
Off-stream storage has real potential in the Gulf. The Queensland Government recently sold 80,000 megalitres of water in a tender that was over-subscribed in the Flinders catchment.
In north and central Queensland there are plenty of options some of which will be needed to provide more water to the coal industry.
Decisions on urban water
Most of these immediate water needs will be focused on water for agriculture or mining. The CSIRO estimates that most of our capital cities will not need further water supply augmentations for 10 to 15 years. Although there will be exceptions. Darwin’s population is rapidly growing and a response will probably be needed before then.
While that might seem some time off Australia needs to start planning for new water storages now. It can take 10 to 15 years for a dam to progress from concept to construction completion. We need to start planning for new water supply solutions today before it is too late.
The most recent drought put immense strain on Australia’s urban water resources. Dam levels in Sydney and Melbourne fell below 40 per cent, and below 20 per cent in Brisbane. Governments were forced to make rushed decisions to increase water supplies, and over $10 billion was invested in desalination plants to deliver 500 gigalitres of new water. It is partly because of these investments mean that Australia’s major cities have sufficient supply to meet demand for probably the next 15 years.
Yet it is clear now that mistakes were made. Too much was spent unnecessarily on desalination capacity. Only the desalination plants in Perth are being regularly used to supply water needs, while desalination plants in South-East Queensland, Sydney, Melbourne and Adelaide lie dormant at great cost to water consumers. Water prices have increased by 64 per cent since 2007.
These flawed decisions imposed higher water prices on consumers and potentially cheaper alternatives, such as dams, were ignored or given little consideration.
I don’t want to be too critical of those governments because those decisions were made under political pressure, and no government can afford for a major city to run out of water when facing a drought crisis.
The lesson for us though is a stitch in time saves nine. If we had done the preparation on what should be the future water supply options, then governments could readily evaluate a range of options, rather than jump for those that provided the quickest fix.
That is why the Coalition has committed all infrastructure investments of more than $100 million, that are supported by the Commonwealth, will require an analysis by Infrastructure Australia. That includes the investments that the Coalition will make in dams and other water infrastructure. That approach will be consistent with the National Water Initiative that the former Coalition Government put in place.
The Coalition will also ensure that we conduct feasibility studies now on future water supply options so that we are ready when our future water supplies dwindle. We will have more to say on that in our response to the Dams task group.
Conclusion
As a Senator I have been based in St George for almost eight years. St George is a town that is built on irrigation. A town of no more than 5000 in the district produces more than $500 million of cotton every year, around $200 million in grain and then melons, onions and other produce.
That is all there because we built a dam on the Balonne River and a weir downstream. The result has been a massive increase in productivity.
We are often told that Australia needs to do more to increase its productivity. Well, irrigation is a productivity booster. It turns water into “white gold”. Around 50 per cent of the value added in Australian agriculture comes from the 2 per cent of our land that is irrigated.
As a country we have come through the worst drought in our history. Rightly, much of our water policies over that time have focused on managing water shortages and conserving water for the environment.
But we must also recognise that water has more than just environmental uses. Our policies must be balanced to ensure that we protect the environment, develop our economy and sustain those towns and communities that rely on the use of water to survive.
That is why a Coalition Government will invest water efficiency not just buybacks, that is why a Coalition Government will build new dams to open up new areas of our country to agricultural and mining development and that is why a Coalition Government will start planning today to tackle the water shortages that will come in our future.
Barnaby Is Right 
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