An open letter to the Prime Minister, the Honourable Kevin Rudd

Dear Prime Minister,

Minister Penny Wong's address to the Murray Darling Association at the 65th National Conference in Adelaide (September 4th ) confirms your government's determination to allow nothing to hinder its attempts to engender a free market revival of a dying river system.

“We have been very clear about the fact we want to see a removal of impediments to farmers and irrigators being able to use the water market as and when they wish,” the Senator tells us.

I'm certain, you don't need to be reminded we are in a global recession and the best money minds in the world are scratching their heads to find ways to make the global market more transparent and accountable. Remember, we were assured 1929 was never supposed to re-occur so, is there such a thing as a fail-safe global market?

While great concerns persist, why choose this moment to let the water privateers loose “to use the water market as and when they wish”?

We’re in a decade long drought; a drought now being described as the result of climate change; 50% of which attributable to human activity. The experts predict erratic, El Nino dominated weather. Given this situation, the application of a flawed ‘free market’ to water management simply defies logic.

If there is one lesson we should have learned from this financial crisis, it is that so-called free markets are prone to being rorted.In the pursuit of a dollar, a pound, a euro or a yen, clever minds find clever ways to get an edge and the ones who end up paying for these market excesses are the ordinary people.

Despite overwhelming evidence of the destruction already caused by huge overseas and local agribusinesses buying up massive amounts of water for totally inappropriate flood irrigation, your Minister would have us believe...

“In the current drought conditions a free and fair water market is perhaps more important now than ever before”.

We have had sufficient time to asses the benefits of water trading. It's reasonable to assume the government has data on progress so far. Where is the audited data on national water resources to assure us the system is working?

“There are many, irrigators across the southern Basin who have all been making good use of the annual allocations market”.  

Prime Minister, who has bought the water? How much? Have the results favoured the greater good of the greatest number of Australians? What benefits have there been for the environment?

In her speech, your Minister also claims, “We are dealing with a legacy of over-allocation and mismanagement.” In reality, she is continuing to exacerbate both problems.

She claims: “A further focus of our plan for Basin reform is to make the water market fairer, faster and more transparent, so water can go to where it has most value”.

It is precisely this approach which sees her standing by while the Lower Lakes and the Coorong are dying, as are crucial internationally registered (Ramsar) Wetlands along the entire Murray-Darling System. Who is intervening to provide water to these systems, when foreign-owned agribusinesses and privateers allocate higher priority to high-value irrigation– because they can afford to do so?

Despite the fact that the Minister claims, “the Commonwealth has already taken over Basin-wide planning’ the NSW Government has just announced it will close off flows in the Lower Lachlan River, below Lake Cargelligo. What happens to the wetlands, and indeed what happens to the townships and graziers downstream from that town? “The closure also means 52 billion litres of Lachlan water entitlements, purchased by the Rudd Government as part of a $303million water buyback to restore river health, will not be delivered.

A spokeswoman for climate change minister Senator Penny Wong confirmed the Federal Government would receive ''zero allocation'' for environmental flows under NSW Government arrangements to close the lower Lachlan.” (Canberra Times 5/9/09)

It painfully obvious, there is a yawning gap between “planning” and “achievement of objectives”.

There is a simple contradiction between having a“basin-wide plan” and believing that free market forces will solve these problems. “Efficiency” as defined by economists does not equal “equity”,“social justice”, or “environmental sustainability”. It is time the Minister was called to account on these fronts.

Until we hear evidence to the contrary we must conclude the free market's run on water is a fatal abrogation of ministerial responsibility that puts profit for shareholders (water privateers) before the health of a fatally compromised river system.

A prescient article (The Age Dec 1st 2008) by Kenneth Davidson observed:

“According to the bank's auditor, the Murray-Darling Basin Commission, until 2000 the average flow from the mouth of the river was 5000 gigalitres a year. Climate change forecasts now predict the flow will become negative, meaning the river will dry up progressively, with acidification moving upstream from the mouth unless at least 500 gigalitres can be found to flush out the mouth now. In simple terms our Murray Bank is already trading while insolvent.

An additional 500 gigalitres will only allow it to limp along under administration, preventing a catastrophic collapse for the 2 million people who depend on it. And yet the new Council of Australian Governments water agreement now being reviewed by the Senate will allow the bank to continue to trade with derivatives in the form of water licences without water. If it was a real bank, the directors would be risking jail. Even so, Victoria's Premier wants to take more water from the bank based on future deposits, which the CSIRO suggests won't be available.”

In total defiance of any logic, water held in countless dams is now worth more to the owners on the market than it would be if used to irrigate crops to feed the nation.

A growing number of prominent people are sceptical the free market will save the day. Ross Gittins, Economics correspondent for the Sydney Morning Herald has just joined them.

“The events of the global financial crisis were a stark reminder that markets are populated by fallible human beings, subject to greed, envy and fear, short-sightedness, gullibility and rapaciousness. So markets are far from perfect. They need to operate within a government-imposed framework and be diligently regulated to ensure rules are obeyed.” (Sydney Morning Herald, 9/9/09)

While your government gambles with our most precious resource, every hour that passes is one hour closer to the point of no return.

Yours Sincerely,

Bernard Eddy

Australian Water Network