The failure of the Murray–Darling Basin Plan to recover sufficient water to avert further environmental damage has pushed the government towards more buybacks, infuriating farmers and state politicians. By Margaret Simons.
No winners in Murray–Darling Basin Plan
If politics is how societies, short of war, decide on the sharing of resources, then water – particularly in a dry country – is unavoidably political.
It is not about parties. It is the politics of place, of community, of food security and ultimately the nature of our federation. It could hardly be more difficult, or more important.
In August the federal minister for water, Tanya Plibersek, announced plans to change the laws that govern the Murray–Darling Basin Plan – the 11-year-old agreement under which states and the Commonwealth cooperate to reclaim water from agriculture in the interests of the environment and sustainability.
Plibersek declared what’s already a widely accepted fact: aspects of the plan are failing and will not be completed by the 2024 deadline. She intends to recover more water, including, controversially, by buying it back from irrigators. The previous government capped buybacks in 2015, citing damage to rural communities and industries.
The fate of the bill Plibersek introduced to parliament is likely to depend on the Greens and independents. It has been referred to a Senate committee inquiry and the submissions reinforce that when it comes to our most productive agricultural region, little is agreed.
Some important aspects of the legislation are so far relatively uncontroversial. The powers of the inspector-general of water compliance will be increased and water markets reformed, with prohibitions on insider trading and market manipulation.
Other aspects have convulsed the basin’s communities. The bill would remove a stipulation that the government can buy back water only if doing so will not damage rural communities. Plibersek says she wants to minimise buybacks and has promised money to compensate those affected, though so far there are no specifics.
Victoria is so infuriated it has withheld agreeing to Plibersek’s measures, effectively threatening to exit the Murray–Darling Basin Plan. Victoria’s minister for water, Harriet Shing, told The Saturday Paper that even 100 gigalitres of additional buybacks from the state could mean $140 million a year in lost agricultural production, 460 job losses on farms and more indirectly. Victorian irrigators predict higher water prices, and therefore higher food prices.
Shing argues, with some justification, that Victoria has already done more than its share in water recovery. It has met its targets and given up more water through buybacks than any other state. Plibersek agrees Victoria has done well but insists that if it doesn’t sign up to the changes, as New South Wales has done, it can’t expect Commonwealth funding for key infrastructure projects designed to get environmental water to the wetlands that need it. It will take “fundamental change” to recover more water – in particular, most of an agreed 450 gigalitres promised to South Australia.
“I don’t require the permission of any state or territory government to make these changes,” says Plibersek, “or to purchase water towards the targets. But I’d rather do it with them.”
When Anthony Albanese gave Plibersek, his potential rival for the leadership, the water portfolio, he awarded her the ultimate thankless task. There will be no easy victories, no glory and plenty of pain for the minister.
Water from the river system has been historically over-allocated. Correcting that is what the basin plan is all about. And there has been success. Most of the initial target of 2750 gigalitres has been recovered for the environment and used to save wetlands, birds and fish. But when it comes to farmers, there can be no winners. The only question is how much water, and therefore how much money, jobs and industry, each region will lose. And while the river would certainly be in a worse state without the Murray–Darling Basin Plan, the hard fact is that, thanks largely to climate change, things will still get worse.
Few people understand water policy, and that allows politicians on all sides to fudge. The Murray–Darling is really two river systems. In the southern basin, the Murray is fed by the Murrumbidgee and its tributaries and the big rivers of Victoria. This is the home of dairy farms, horticulture, rice and fruit. The rivers are reliable, defined by big dams and storages. Water use is closely metered and compliance is high.
The northern basin is different. The Darling, or Baaka, is fed by the Barwon and other boom and bust tropical rivers of the north. This is the land of droughts and flooding rains, and the dominant crop is cotton. Historically, irrigators have been allowed to draw water whenever the river was above a certain level, and metering has been inconsistent. In recent decades big private dams have spread over the inland of northern NSW, to capture floodwaters before they reach the rivers.
Politicians, including Plibersek and Greens Senator Sarah Hanson-Young, have used the image of the disastrous fish kills on the Darling/Baaka in their rhetoric on the plan. Yet the proposed buybacks will have virtually no impact on this problem. Water would be recovered almost entirely from the southern basin, while the dams to the north that are largely to blame for reduced flows in the Darling/Baaka, and the fish kills, are relatively untouched by this round of reforms.
Plibersek says flood-plain harvesting is “a matter for state and territory governments”, though she emphasises it should comply with the limits set by the plan.
NSW is belatedly moving to regulate flood-plain harvesting, but nobody knows how much those dams are retaining.
The Murray–Darling Basin Plan is one of the most significant pieces of public policy of its kind in the world. Devised under the Howard government and legislated by Labor in 2012, it was an object of bitter controversy and compromise from the start. Scientists calculated that a minimum of 3000 to 4000 gigalitres of water needed to be withdrawn from agriculture for the river to be sustainable. That was progressively pegged back to 2750 gigalitres.
It was later agreed that amount could be further cut in return for infrastructure projects designed to save water or achieve environmental outcomes with less. Some of these sustainable diversion limit adjustment mechanisms (SDLAMs) were legislated into the agreement when they were little more than back-of-the-envelope ideas.
Plibersek has finally confirmed the obvious – many will arrive late or not at all, and more than half the water savings they were meant to achieve are unlikely to happen. In its submission to the Senate committee, the Australian Conservation Foundation calls for the SDLAMs to be abandoned.
Plibersek has instead extended their deadlines, and re-entered the fray with the government chequebook. She is already buying water, largely in the north.
The main controversy in the bill is the use of buybacks to reclaim an outstanding 424 gigalitres of 450 promised to South Australia, to flow down to the lakes at the Murray mouth and the Coorong. Rivers die from the mouth upwards, South Australians are fond of pointing out, and they’re preoccupied with keeping the Murray open, flushing salt to the sea. In the Coalition’s decade of government, only two gigalitres of the 450 was recovered.
The history of buybacks is fraught. The conventional view in rural Australia is that those made under the Rudd–Gillard government were largely to blame for the decline in rural industries and communities. Various pieces of research have backed up this view.
Rob Priestly, spokesperson for the Goulburn–Murray Irrigation District (GMID) water leadership group, and an independent candidate for the seat of Nicholls in the 2022 federal election, talks about his home town of Katandra West, “once wall-to-wall irrigation and now a fraction of that with only a few dairy farms”. He points to Tongala, once home to a Nestlé operation, and Rochester, where the closed Murray Goulburn dairy plant remains – “both large factories now empty in the middle of their communities”.
The region has already given back a lot of water, he says, and the bigger worry this time will be what happens to fresh fruit, vegetables and dairy production: “A hell of a lot of the cheap fresh food comes from the spot they will buy the water.”
He argues the job multiplier for these products is greater than that for cotton – which is mostly baled up and exported for processing offshore.
Research commissioned by the GMID and the Victorian government suggests further buybacks would reduce economic output in the southern basin by $855 million annually, and shed 1500 jobs, as well as distort the market, raise the cost of water and increase the cost of food.
Plibersek is more convinced by work from Professor Sarah Wheeler, of the University of Adelaide, who says the damage from buybacks has been greatly exaggerated, and studies saying otherwise are “poor quality”. Wheeler and others argue buybacks are by far the cheapest and most effective way of recovering water.
Plibersek says “these apocalyptic claims tend to take every single trend, such as consolidation of farming and pressure from supermarkets on prices, and blame it on water buybacks”.
The GMID has also commissioned a report by consultants Maryanne Slattery and Bill Johnson that overturns long-accepted thinking about the north and south. They reject the notion that the Darling/Baaka, which in recent years has often failed to connect with the Murray, is not sufficiently reliable to provide much water to South Australia. Using the Murray–Darling Basin Authority’s own figures, they argue that, pre-settlement, the rivers of the north used to provide about a quarter of the flows to South Australia, and could do so again. They suggest that instead of buying water in the south, the Commonwealth should enter into a wholesale buyback of cotton growers’ water licences in the north.
Priestly says that plan would “kill two birds with one stone. It restores the Darling/Baaka, and it gets water for South Australia.” It is gaining support from the South Australian irrigators and the communities around the fish kill sites.
But the Slattery and Johnson report has no supporters in parliament as yet, and other scientists dismiss it. The leader of the Greens, Adam Bandt, has moved an amendment to Plibersek’s bill specifying the water must be recovered in the south.
Meanwhile, some argue the whole plan needs revising, to focus less on the amount recovered and more on using existing environmental water effectively. The Victorians point out that Plibersek is now refusing funding to infrastructure projects that would achieve exactly those aims.
Shing and Plibersek say they will continue to seek agreement.
The outcome, like everything in the history of the Murray–Darling Basin, is likely to be a compromise. There is, after all, no ideal.
This article was first published in the print edition of The Saturday Paper on October 14, 2023 as "Basin instinct".
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