Water policy
Sarah MANSFIELD (Western Victoria) (12:02): (90) My question is to the Minister for Water. Concerns about the effects of open tender water purchases on water price led to a shift towards infrastructure-based recovery, like farm upgrades. Participants in these programs received funds to improve water efficiency in exchange for part of their water entitlements, but farms participating in these programs tended to use savings to increase water use by an estimated 23 per cent across all farms. This rebound effect has meant that on-farm efficiency projects increase allocation prices more than buybacks. What is the government’s rationale for advocating for efficiency projects over buybacks?
Harriet SHING (Eastern Victoria – Minister for Water, Minister for Regional Development, Minister for Commonwealth Games Legacy, Minister for Equality) (12:03): Thank you for that question, which provides me with an opportunity to talk about the way in which on-farm efficiencies operate in contradistinction to off-farm efficiency work. At the heart of water policy and the really complex, interlinking components of a system that, as I have indicated in this place before, operates across numerous jurisdictions and also involves federal regulation, it is important to set out some context about the Victorian position that we have taken over time as it relates to on-farm efficiencies, and then what I can do with the time we have available is take you to why it is that off-farm efficiency projects have actually delivered more water back into the system and deployed a range of innovations that get to the heart of the problem that we are trying to manage.
I do want to indicate, though, that it is pleasing that we have been able to provide you with information about the nature of the system further to your question about the water register and transparency and accountability and indeed enforcement of trading in the Victorian system, and I am looking forward to continuing with those conversations as you meet with people across the sector to understand better the way in which projects are being rolled out and implemented, the sorts of challenges and problems that we are looking to address and the way in which we are working with a range of jurisdictions.
In Victoria we have actually sought to attempt on-farm water recovery programs, and they are not the silver bullet that they have been made out to be. On-farm projects take water out of the consumptive pool and they actually push up water prices, which is also what I discussed last sitting week in relation to buybacks. They do not actually address the problem that we are seeking to lean into here, and we know that evidence from the Australian Bureau of Agricultural and Resource Economics and Sciences and the University of Adelaide has shown that on-farm programs negatively affect water users across the basin. They may provide short-term benefits but they are not enduring. We also know from the Frontier Economics report, which is a public document, that there have been a range of hardships experienced by primary producers and irrigators across the basin communities as they relate to the impact of buybacks, which I suppose feeds into the other part of your question. We have raised concerns about the validity of water savings from on-farm projects in other states.
With the remaining 22 seconds that I have I also want to confirm that we do support off-farm water infrastructure projects. These include the Lower Murray Water and Goulburn-Murray Water water efficiency programs. The WEP has indeed delivered over 17 gigalitres of water without negatively impacting upon communities. As I said, they are really complex interlinking projects, infrastructure and investments – (Time expired)
Sarah MANSFIELD (Western Victoria) (12:06): Thank you, Minister Shing, for your response, because from what you are saying it sounds like perhaps the government is not prioritising these on-farm efficiency projects to quite the extent that we understood they might have been. I would be interested in some clarity on that. I guess one of the other justifications that is sometimes used for these on-farm efficiency projects is that they create jobs. In fact every dollar spent on health, education and community care creates four times as many jobs as handouts for water infrastructure projects. So what is the government’s justification for efficiency projects, given they are expensive for water recovery, contribute the most upward pressure on water prices and are ineffective at job creation?
Harriet SHING (Eastern Victoria – Minister for Water, Minister for Regional Development, Minister for Commonwealth Games Legacy, Minister for Equality) (12:07): Thank you for that question. There is a lot in that and a number of cascading supplementary questions. I have got 55 seconds. In the time that I have available, unless the house is prepared to indulge me until the end of the day, I am very happy to say that there are a range of consequences around the application of socio-economic criteria as they function within the 2018 agreement entered into by the states as part of delivery of the objectives of the Murray-Darling Basin plan. This is intended to leave communities no worse off as a consequence of efficiency measures, and indeed it has been determined that buybacks and on-farm work do not deliver the outcomes that they intend to deliver. In fact off-farm work and efficiencies across irrigation systems, including through watering of flood plains, actually get the water to where we need it to be. This is why we are looking to deploy technology and innovation in delivering those benefits over time.