Basin battle begins

Residents of Queensland’s Balonne region – particularly in St George and Dirranbandi which are heavily dependent on cotton growing – won’t sleep well tonight after the Murray Darling Basin Authority today suggested cuts of 29-39% in the water that Condamine-Balonne irrigators can take out of regional watercourses.  Queensland Country Life (Murray cuts confirmed) reports:

POTENTIAL cuts to water allocations of up to 35 per cent for surface water and 40pc for groundwater have crushed irrigators’ hopes of a balanced Murray Darling Basin plan.

The Murray Darling Basin Authority (MDBA) this afternoon released its long awaited guidelines to the plan in a tightly guarded media lock-up in Canberra.

The guidelines propose stripping about 3000 to 4000 gigalitres of water a year from consumptive use and delivering it to the environment in a move the authority admits will eliminate in excess of $0.8 billion a year in irrigated agricultural activity from the Basin.

The authority said the cuts represent a reduction on current diversion limits of between 22 and 29pc on average across the Basin.

While irrigators will be compensated for any loss of entitlements, their local communities face potential negative flow-on impacts if irrigated agriculture (particularly cotton growing) declines, and the flow of income into the region declines proportionately. A leading NSW irrigation industry representative is forecasting large job losses:

NSW Irrigators Council chief executive, Andrew Gregson, tipped the cuts outlined in the guidelines would cost 12,000 jobs directly in NSW alone – with the flow-on effects likely to see that number rise to 17,000 at the low end.

“The idea it will only cost 800 jobs – which is what the authority is saying – is absolute rubbish,” Mr Gregson said.

Mr Gregson criticised the authority’s decision to release only volume one of the guidelines with the detail of how it calculated its numbers reserved for volume two, due out later this month.

“The sustainable diversion limits were not beyond what we expected but we also expected legitimate analysis and explanation of how they came to these numbers and we didn’t get it,” Mr Gregson said.

Mr Gregson will be a potent force in the irrigators’ battle against the Basin Plan (see my previous post on this topic).  Irrigators are worried that, if fellow irrigators sell their water rights to the Commonwealth, then the process of regional decline will accelerate, stripping local communities of commercial, financial and social services, and making it harder for those who remain.

At first glance, the cuts suggested for Queensland appear large relative to the small contribution that water from Queensland makes to the health of the overall Murray-Darling system.  But before we can make an informed judgment we need to see the underlying science in the Volume 2 report which the MDBA will release later this month.

The Commonwealth Water Minister Tony Burke has a tough job ahead of him.  It’s hard to see the Government taking the courageous decision (in the Humphrey Appleby sense of the term) to support the current Basin Plan.  It’s very likely the Government will consider the water savings it could get out of further subsidising irrigation infrastructure (e.g., lateral move machines, on-farm dams).  One of the Government’s key backers has already hinted he would approve of such a move (Windsor’s water wisdom).

Treasury and the Productivity Commission would hate this (because, from a purely financial point of view, straight water buybacks are more cost-effective than subsidising water use efficiency infrastructure), but the Government can live with frustrated bureaucrats more easily than it can with tens of thousands of Australians whose livelihoods are under threat.

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