As attempts to restore water to the river basin fail to meet their targets, scientists warn irrigator subsidies may cost 10 times initial estimates. By Karen Middleton.

Murray–Darling recovery in peril

The federal government’s subsidies to restore water to the Murray–Darling river system have fallen dramatically short of their yearly target, recovering less than 3 per cent of what was anticipated by the end of the financial year.

Department of Agriculture figures on efficiency gains suggest that of the government’s forecast 62 gigalitres to be recovered by June 30 this year, only 1.3 gigalitres have been achieved.

The Saturday Paper has confirmed the timing of the federal election delayed the adoption of some proposed projects, which the states and territories are responsible for putting forward.

If approved when ministers next meet in August, two pending projects, believed to be from Victoria and the ACT, are likely to cut the deficit by about half.

But a further 30 gigalitres will still need to be found for last year’s target to be met.

The shortfall follows warnings from two of Australia’s most respected water scientists that the government’s irrigation efficiency scheme is already costing taxpayers up to 10 times more per million litres saved than first estimated.

Australian National University hydrologists Dr John Williams and Dr Quentin Grafton have calculated what they argue is the cost of the government’s contentious scheme to pay irrigators to be more efficient in Australia’s most important river basin, which is struggling to survive the impacts of climate change and overuse.

They are calling for an urgent audit of water use in the Murray–Darling Basin, echoed this week by some of those who were involved in early moves towards a basin plan, decades ago.

In a detailed analysis of the subsidy scheme published in March, Williams and Grafton calculated the scheme is likely to be recovering and returning about 70 gigalitres – 70 billion litres – a year to the environment in the Murray–Darling Basin. Not the 700 gigalitres the government has estimated.

Using a mid-point estimate – neither the best-case scenario, nor the worst – the scientists say, “… the actual average cost of increasing stream and river flows per [megalitre] would be 10 times more expensive than is estimated by the Australian Government”.

Under the subsidy scheme, the government has spent about $4 billion – of an earmarked $8 billion – paying basin irrigators to make improvements on their properties, such as building dams to capture runoff and lining channels to reduce seepage. The irrigators are then required to surrender entitlement to some of the water they save, typically 50 per cent, so it’s left for the environment rather than extracted for use.

The discrepancy between the two sets of figures comes in how much water each estimates returns to the environment naturally through irrigation – known as return flows – and how much is flowing as a direct result of the efficiency programs and surrender of entitlements.

The government’s estimate was based on an assumption that infrastructure improvements wouldn’t actually save any water: that the change in return flows would be zero.

Williams and Grafton say the government’s method allows for a kind of phantom count. It counts as savings water that used to leak back to the environment but doesn’t anymore because there will be less natural flow once seepage is reduced.

The scientists suggest the government estimate – that the scheme is costing about $5000 for every million litres, or megalitre, returned to the river system – is out by a factor of 10. They say it is more likely to cost about $50,000.

Their paper “Missing in action: possible effects of water recovery on stream and river flows in the Murray–Darling Basin, Australia” was published in the Australasian Journal of Water Resources. The journal ensured the work was peer-reviewed in several countries and its methodology endorsed.

A spokesman for the Murray–Darling Basin Authority said that while return flows needed to be monitored and better understood, “generally we’re on track”.

Williams and Grafton disagree.

“We readily acknowledge there remains a great deal of uncertainty about the actual effect on return flows from increases in irrigation efficiency in the MDB [Murray–Darling Basin],” reads their paper, but reductions in return flows from less leaky channels “have not been accounted for”.

Williams and Grafton say the scheme is already 2.5 times more expensive than the alternative preferred by them and others, which involves buying back irrigators’ water entitlements directly.

While there have been some buybacks, the government favours the subsidies.

Water Resources Minister David Littleproud said subsidies protected rural jobs while water buybacks decimated communities.

“Taxpayer-funded water efficiency projects help farmers grow more with less water and return water to the river system,” Littleproud said in a statement. “This way, the river, the farmer and the community all win.”

The buyback option would likely reduce the amount of water-intensive farming in the basin over time.

Under the subsidy scheme, as ABC TV’s Four Corners reported this week, irrigators are being paid to undertake infrastructure improvements that, in some cases, they would have made anyway. Having increased their production efficiency, some are now choosing to expand operations, buying water from other existing licences. Those irrigators argue that means the expansion is contributing to the economy without increasing water use.

Some critics of the basin plan argue there is already too much water allocated to farming and industry – an allocation the South Australian royal commission on the basin plan was told last year was not based on the best science – and that the river is suffering.

John Williams said the lack of accurate information on the subsidy scheme – and water use overall – could distort the water market.

He said if the river system were a corporation, the failure to scrutinise it would not be acceptable.

“You can have a set of accounts for a company but until you actually have an audit of them, you can’t know the health of the company,” he said.

The government has acknowledged it has paid higher than market prices for the water entitlements being surrendered under the efficiency scheme.

Some basin producers say prices are being pushed beyond the reach of small farmers, putting more pressure on the system.

Critics also point to the kind of farming being allowed, involving not just water-intensive seasonal crops, such as cotton, which are replanted – or not – each year, but also permanent plantings of citrus and nuts, which require large volumes of water regardless.

The National Irrigators’ Council’s chief executive, Steve Whan, disputes the assumptions made by Williams and Grafton and their findings, suggesting theirs is “quite a narrow opinion” and their estimate of return flows to the river is “just unrealistic”.

“The reality of the basin plan is that nobody particularly likes it and that probably means it’s about right,” Whan told The Saturday Paper.

“We live in a democracy. It was a negotiation. We didn’t get what we wanted out of the plan but it’s the only thing that gives any measure of certainty.”

Williams and Grafton criticise what they call “a dearth of publicly available information” about the water in the Murray–Darling.

Their concern reflects an intergenerational failure in the quest for a successful management plan, reaching back decades.

First Nations peoples managed the system skilfully for thousands of years, but work towards a formal bureaucratic management system began soon after Federation.

In the late 1970s and 1980s, the Fraser and Hawke governments took steps to forge an intergovernmental agreement, and federal parliament passed the River Murray Waters Amendment Act in 1983.

During that debate, former shadow environment minister David Connolly, who represented the safe Liberal seat of Bradfield, on Sydney’s north shore, spoke passionately about what was happening to the Murray–Darling and what should be done about it.

Connolly observed that “self-interest and parochialism” had been a problem in the basin since well before Federation.

So concerned was Connolly by the state of things that he led a group of opposition MPs on a tour through communities from Albury to Adelaide, which he believes was the first parliamentary delegation to travel the river route.

Connolly was particularly impressed by the local people’s commitment to the river system. He said they were watching “year by year, a gradual deterioration in its capacity”.

“There is a very deep-seated concern for the long-term viability of the Murray system,” he told parliament on August 24, 1983.

In 1996, Connolly retired to a farm outside Canberra, where he still lives. He is no less passionate about the river system, though saddened by its current state.

“I don’t think the situation has improved markedly, despite the huge amount of money that has obviously been spent,” the former Liberal MP told The Saturday Paper.

“The fundamental problem that we had back then, that we clearly have today, is there simply is not enough water to meet both the socioeconomic needs and the environmental needs.”

In 1985, the federal government reached what it called “an historic breakthrough” with NSW, Victoria and South Australia on river management, announcing a decision “to shelve parochial interests and adopt a co-operative approach to better management of the basin”.

The communiqué lists among key issues the need for “new institutional structures” to better co-ordinate intergovernmental action, and “the need for effective community participation in the resolution of the water, land and environmental problems of the basin”.

Thirty-four years on, poor community engagement is being cited as a key reason that an agreement on a detailed basin plan stalled for so long.

In the late ’80s, the then Murray–Darling Basin Commission put huge effort into keeping the basin communities engaged.

The commission established Special Forever, a groundbreaking student stewardship program, run by 1200 teacher volunteers and engaging 38,000 children in protecting and preserving the river and its wildlife. The program’s manager, David Eastburn, was also the head of the commission’s communications unit.

“At times we were dealing with quite angry people,” Eastburn told The Saturday Paper this week, referring to the anxieties around future livelihoods. “But we’d be around there making the videos, getting to know them, giving them a fish poster for their grandkids. We could often answer their questions on the spot … and because we returned to communities fairly often, they would come onside.”

Eastburn said resourcing for Special Forever was wound back under the Howard government and the program eventually closed.

Likewise, early efforts to make the wider basin community part of the preservation process waned.

Eastburn said once “technocrats” took over the basin commission, resources were diverted and community relationship-building effectively stopped.

“They didn’t want the pain of dealing with the community,” he said.

“They didn’t involve the community as authentic partners, as originally promised. The government didn’t have the human or financial resources, the authority or anything. They can’t force the people to do it unless they were onside.”

The current Murray–Darling Basin Authority has a unit handling consultations and defends the extent of its engagement with stakeholders.

But a government-commissioned study of the irrigation efficiency measures by EY consultants published in January last year reported “a general lack of clarity as to measures and objectives, no common language and an absence of trust”.

“Stakeholders are experiencing fatigue from multiple consultation streams and have expressed a desire to discuss Basin Plan issues on a holistic basis and for deeper two-way engagement,” said the EY report. “To move forward there is a need to better engage with community and industry leaders, build greater trust and develop a social licence.”

The consultants said there should be a greater focus on “centrally collecting information and data specifically relating to water efficiency measures”.

“This is required to better understand the socioeconomic impacts of water efficiency measures, the economics of participation, the associated value for money implications and risks in achieving the program within the required statutory budget,” said their report.

It acknowledged “elements” of the Basin Plan had had an impact but that it had been “positive and negative”.

According to the report, the government’s objective of recovering 450 gigalitres to the river by 2024 can be met, provided its recommendations are followed.

The ANU scientists query that – and whether it will be enough to restore the river to health.

Their call for accurate data is a common theme among those with a stake in the future of the river.

“I totally agree,” David Connolly told The Saturday Paper. “That’s what we said in ’83.”

Steve Whan of the Irrigators’ Council concurs.

“We do need more work and we do need more water accounting,” he said.

Along the mighty Murray–Darling, it’s the only bit of common ground. 

This article was first published in the print edition of The Saturday Paper on Jul 13, 2019 as "Murray–Darling recovery in peril".

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Karen Middleton is The Saturday Paper’s chief political correspondent.

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