Still waiting for the detailed plan

The policies needed to underpin water savings in the Murray-Darling Basin still haven\u27t been announced, writes WAYNE CHAMLEY IN MID AUGUST the Water Bill 2007 was passed by federal parliament. The legislation proposes new management powers and statutory arrangements over the Murray-Darling Basin, as well as new roles for the Bureau of Meteorology and the Australian Competition and Consumer Council. The environment and water minister, Malcolm Turnbull, claims that the legislation is necessary to enable the commonwealth government to implement the prime minister’s ten-point National Plan for Water Security, which was supported by the governments of Queensland, NSW and South Australia. The government of Victoria has always been opposed to the plan and has yet to indicate whether it will challenge the new legislation in the High Court of Australia. Even today very little detailed information is available about the government’s intentions, beyond what was released by the prime minister when he launched the plan in January this year. Other data about water in the Murray-Darling Basin has been published by the consultants CapitalAG, who were engaged by the Murray-Darling Basin Commission some five years ago to provide detailed options for making water savings. It’s interesting to compare the consultant’s published data and the information in the prime minister’s plan. Essentially the actions proposed in the prime minister’s plan aim to achieve an increase in water efficiency within the Murray-Darling Basin in four sectors of agricultural production: pastures, cotton, cereals and rice. These sectors account for about 93 per cent of the area irrigated and 92 per cent of all the water used in the basin. In 1999-2000 this was about 9000 billion litres of surface water and 2000 billion litres of groundwater. Using Australian Bureau of Statistics data and mathematical modelling, the consultants identified substantial potential water savings if four actions were taken across the basin: Low-cost, on-farm investments: These investments would aim to lift a substantial number of irrigators to world best practice. If just 50 per cent of the irrigators adopted new practices over ten years, the saved surface water would be around 900 billion litres. Changes in irrigators’ practices would be brought about through their participation in activities such as online education, TAFE courses and mentoring; ramping up advisory services about irrigation; and demonstration farms, field days and a yearly program of farm tours. While not costed in detail, if between $200 million and $500 million were allocated then the unit cost for the expected water savings would be between $200 and $500 per million litres. High-cost, on-farm investments: This action requires investment in available technologies, as well as an ability and interest by the user in operating the technology to get maximum performance. The consultants calculated that if 50 per cent of the irrigators adopted this scenario, the saved surface water would be about 1240 billion litres. The prime minister’s plan indicates that this action or something close to it will be promoted. But the plan does not make clear who will pay for the technologies and how irrigators will be educated about their use. No estimate is given for the number of irrigators who must make these investments so that the water savings are realised. It so happens that the figure for saved water in the prime minister’s plan (1200 billion litres) is very close to the figure calculated by the consultants (1240 billion litres). In the Murray-Darling Basin there are 20,884 farms involved with irrigated crops and pasture. Although water-saving technologies have been available for at least twenty years, only about 15 per cent of all the irrigators in Australia use them. Government ministers and bureaucrats are being very optimistic if they believe that over ten years or so, some 10,000 farmers are suddenly going to go “high tech”. Refurbishing and modernising irrigation infrastructure: The consultant’s report and the prime minister’s plan are in agreement on this proposed action. From the consultant’s work it can be calculated that moving from an average water loss figure of 25 per cent to 20 per cent will achieve a water saving of about 300 GL, and that savings double with every further 5 per cent reduction in water loss. Reducing losses from say 25 per cent to 10 per cent would therefore save about 1200 billion litres. The prime minister’s plan identifies an investment of $3 billion and a water saving of around 1500 billion litres. This works out at around $2000 per million litres saved. Getting the policy settings right: This scenario is the least developed by the consultants and will usually turn out to be the most dangerous for any government. What is required here is a major change in government policies and, as a consequence, practices both on and off the farm. Policy changes would have to be linked to major structural change in some sectors of the irrigation industry and the government would have to be prepared to: • close off taxation loopholes and regulate some forms of corporate investment, • clarify the national objectives in relation to trading in water entitlements, • inquire into the introduction of differential water pricing, • link taxation incentives to environmental targets and objectives, • define the opportunities for legitimate carbon emissions trading by rural enterprises, • overall, present a better policy environment which provides greater investment security. The prime minister’s plan avoids any mention of policy changes and instead proposes a buy-back of over-allocated water entitlements. It can be expected that most of this proposed purchasing will go on in NSW, if irrigators agree to sell. The target must be about 300 billion litres and this action is costed at $3 billion. On the information so far presented, the federal government is in fact offering to pay $10,000 per million litres. As with all behavior change, the extent of the savings realised will depend on the level of participation and the degree of compliance, as well as the dollars that might have to be spent by the irrigators, in addition to the proposed government spending. Whether all of this achieves any level of water security remains to be seen. • Wayne Chamley works as a consultant in the areas of environment and health. He is a member of the Watermark Australia Project and co-author of its report, Our Water Mark: Australians Making a Difference in Water Reform. 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