Clarity on the Murray

Is there a real threat to the Murray-Darling Basin system? 

Prime Minister Julia Gillard’s endorsement of market-based reforms deserves much praise but does not say how this would be applied in the case of climate change and water. The reality is that the government’s policies there are not market- based but involve extensive regulation and intervention. Yet the government has shown little capacity for establishing regulatory arrangements based on relevant factors in these areas. 

Take the Murray-Darling Basin shemozzle. 

During the election Water Minister Tony Burke assured us the Murray Darling Authority was independent and Gillard stated “we will implement the authority plan” on the allocation of water to irrigators. However, when the authority’s initial report (stated to be only a “guide”) gave priority to supposed environmental needs of the river system, the irrigators were justifiably outraged at the potential cuts in their water allocations. Regional development minister Crean then accepted “it was never going to be a decision for the authority … the government has to put out a plan and it will do that”. 

Now Burke has obtained legal advice that indicates the authority should have given equal weight to environmental, economic and social implications and authority head Taylor has admitted he is unsure as to whether even the minimum initial environmental allocation by the authority is too high. 

Meantime, it has been reported that independent Tony Windsor has been appointed to head an inquiry to check the human costs and that he indicated he does not expect a resolution to the process in this electoral term, ending in 2013 (however Windsor’s press release says only that he will be part of a Parliamentary Inquiry); independent Bob Katter has indicated he will introduce a private members bill to stop irrigation buybacks if social and economic costs are too high; and senator Heffernan will head a Senate inquiry. 

So, will the irrigators have to wait until 2013 for a government plan that takes account of the outcome of these inquiries and Taylor’s re-assessment of the environmental needs? Surely the government must act more quickly than that and, as Crean has promised, put out its plan before 2013. 

In doing so it must not make use only of the views of the authority or of the various supposed water “experts” that do not seem to properly understand how the water system has worked in the past and how it should be managed now.  Most importantly, it must make an independent assessment of whether there is a need for any environmental allocation. 

First, while there is a long history of fluctuating inflows that can be expected to continue, assessments of the future outlook should not be based on the view that, if increased temperatures occur, rainfall will drop. A statistical analysis of rainfall since 1910 reveals no significant downward trend as temperatures increased but does suggest that in the hotter summer months rainfall is higher. The implication is that, if anything, rainfall will be higher if temperatures do increase in the years ahead. 

Even Bureau of Meteorology experts cannot be relied on to make reliable assessments here. Only a couple of weeks ago the head of climate monitoring and prediction in the Melbourne office, Dr David Jones, asserted that southern Australia had experienced a drying trend that more closely resembled climate change than a drought. According to Jones “We have had 13 below average years in a row. We have never seen more than 6 years in a row before,” he said. But while the Melbourne CBD office itself has experienced 13 years of below average rainfall, the pattern for this highly urbanized site is not typical of southern Australia nor of the Murray Darling area. More generally, southern Australia has only been getting drier in comparison to the very wet 1950s and 1970s. It is not drier with respect to the first half of the 20^th century.  

Second, the arrangements established through human endeavour over the last hundred years or so have demonstrated a capacity to handle periods of low inflow. It should not be forgotten that the original River Murray Agreement was formulated in the wake of the devastating 1914-15 drought. Despite the recent longest period of below average inflow since gauging statistics began in 1962, a continuing stream flow was maintained for almost all city, town, industrial and rural use in line with this agreement. 

Third, increasing the water flow down the river system would be highly unlikely to help the environment per se and would simply flow out to sea. The floodplains are all outside the river banks (which vary between 8 and 13 metres above normal water flow) and the capacity of existing storages is insufficient to allow water to be put over the river banks and into these ecosystems. River red gums in the flood plains generally survive periods of low rainfall and regenerate when natural rainfall occurs. True, the bird and fish life are adversely affected in drought conditions but there is far more of such life now than before the introduction of water conservation and irrigation. The above average rainfall in 2010 has already witnessed a major revival of such life. 

Fourth, the principal need today is not to increase river water flows but to add to existing dams and weirs to collect and store water in periods when inflows are well above average. Water can then be released for hydro-power, domestic and industrial use, and to maintain stream flow for irrigation. Certainly it is only the staged release from existing catchments that sustains water flow for downstream communities, including Adelaide. Dams enhance and make more sustainable the river environment itself. 

What should the Government’s plan be? Above all, it must re-assess the need for environmental allocations by asking Treasury to prepare a comprehensive critique of the assessments of the authority and other experts (it will be recalled that Treasury head Ken Henry complained that Treasury was not consulted on water under the Howard Government). That critique should include an examination of whether any further buy-backs of water are needed and whether the substantial funds already allocated in the budget for the Murray Darling can be saved in the forthcoming mid-year review or put to better water infrastructure. 

Des Moore, a former Deputy Secretary, Treasury, is Director, Institute for Private Enterprise.

This article has drawn on research undertaken by Mr William Kininmonth and Mr Ron Pike.