As the people rallying in large numbers over recent weeks in South Australia are being correctly informed, the root-cause of the problem with the Murray Darling Basin (MDB) is neither drought nor climate change: it is man-made. The MDB is being mismanaged and water has been over-allocated by governments.

The member governments of the Council of Australian Governments (COAG) are behaving as if there is no crisis, no drought, no disaster evolving in the Lower Lakes and the Coorong and it is business as usual.

The previous Howard Government's Management Investment Schemes has resulted in corporations buying up scarce water to establish new irrigation projects during the peak of the drought; the Queensland Government in 2007 tried to auction water licenses in the Warrego River until it was stopped by the Howard Government; the NSW Government until very recently (3/7/08) stood idly by while up stream farmers stole and diverted water from the Murray Darling; the Darling is bone dry, the Menindee Lakes have experienced significant problems with water quality (salinity) that has had major impacts on the citizens of Broken Hill and their plumbing systems (ABC TV Stateline South Australia 8/8/2008)

In Victoria, the Brumby Government is planning to pipe 75 GL (1 giga litre = 1 billion litres) of water per year from the Goulburn River to Melbourne and is ignoring calls from its own farmers for a moratorium to be placed on permanent water trade out of the district of origin, during what has been a long and protracted drought (4/7/08). It is also planning to build a 150 GL desalination plant in Bass to alleviate Melbourne's water problems. The South Australian Government is planning to build a weir at Wellington and for the first time in their history cut off the Lower Lakes from freshwater.

Not surprisingly, opposition is increasing amongst South Australians and Victorians living in these regions. On 10th August 2008, around 10,000 people attended a rally at Goolwa on one of the coldest Sunday mornings of the year and the numbers attending South Australian rallies continue to grow.

State of Emergency Needs to Called

Also correct is the need for a State of Emergency to be declared across the entire MDB to ensure the viability of the entire river system, given the neglect by state and federal governments and to address the consequences of a drought that is far from over. Those who rallied on the steps of the South Australian Parliament on 1st August 2008 were told of the need to be prepared to fight for the Murray Darling as was done to save the Franklin River. For too long the MDB has been treated a reservoir and not as a living natural system of water environments that need conservation.

Royal Commission Required

There is however a desperate need for the systemic causes of the neglect, mismanagement, over-allocation and market-based water reforms to be investigated and determined before making long term changes to the governance of the MDB and for that the new Federal Government needs to show leadership and call a public Commission of Inquiry, a Royal Commission.

Clearly there are choices that need to be made if there is not enough water to go around, particularly in times of drought. These are not choices that can be made by markets or politically independent national bodies established to support those markets; they must be made by government using political processes. The choices that need to be made are that the river and domestic needs must rank ahead of export needs. All high security water must be reserved for domestic needs, and choices must be made to give priority to households that depend upon river water and irrigators who put food on the table of Australians.

The advocates of reform such as the Wentworth Group promote the use of markets to manage water and to rely on a politically-independent body ? both ideas are ill conceived and result from the idea that governments are incapable and markets are the only ones that can be trusted i.e. the tired privatisation agenda is the only viable solution, water must go to the most efficient (economic) user who can afford to pay, irrespective of the consequences, and because we are in a crisis we must act now.

COAG and Market Privatisation by Stealth

Those who support water reform have been careful not to use the privatisation word and accordingly the public have not been told the truth by the Council of Australian Governments (COAG) that their water reforms are about enhancing the market privatisation of the waters of the MDB. What was once a licence, granted to a property owner by a state government to extract a quantity of water from the MDB, has been unbundled into a marketable property right that can be owned by anybody with the capital to purchase or a bank to hold as a mortgage.

These licences were not sold by state governments in the first place; the amount of water that a licensee can access as an allocation is controlled by state governments and needs to be charged for, given the considerable public and continuing investment in the infrastructure of the MDB, to recover a fair share of costs of the public infrastructure. It remains unclear to me how Australian governments achieved this monumental theft without the prior approval of the Australian electorate via a referendum, supported by subsequent changes to the Australian Constitution; this is truly an economic rationalist experiment on a grand scale.

COAG therefore is not a solution to our problems, but one of the causes. It was a COAG meeting in 1994 that decided to establish an open market or free trade in river water, instead of immediately addressing the over-allocation of water and establishing policies for its use, such as giving priority to maintaining the health of the river system and putting domestic needs ahead of export markets. COAG meetings are not open to the public or recorded in Hansard as they should be.

Snowy Mountains Scheme Privatisation

Let us not forget that the Howard Government supported by the NSW and Victorian state governments tried to privatise the Snowy Mountain Scheme including its waters in 2006, but John Howard backed down in the face of a massive backlash by farmers, environmentalists and unions. The Australian website reported 2/08/08 that "The head of the Snowy Mountains Hydro-Electric Scheme has launched a new campaign to privatise the authority in a move that could reignite a fierce battle between the Hydro and farmers, environmentalists and unions." This is cause for considerable concern.

The Howard Government also introduced farm-based managed investment schemes which have been labelled as a 'disgrace' by South Australia's Water Security Minister (The Australian 25/7/08) for distorting agricultural markets. These schemes are purely self-serving for their investors and where MDB water has been purchased by these corporations they are currently free to use the purchased water to produce products for overseas markets. COAG has used the new water market to expand the irrigation industry during one the most significant droughts in our recent history. Something is seriously wrong when those with money can buy whatever water they need whilst the rest of us, including the river system, have to go without or put in place expensive desalination plants with their considerable environmental baggage. Australians must control the waters of the MDB for the common good and not corporations, private investors or free trade agreements.

The establishment of a national, politically-independent body, advocated by the water reform movement, is no solution as in whose interest is this body going to serve and how is this body going to be accountable to the people of Australia? Handing control to the Federal Government is also not a solution for as we have seen it can't be trusted to make the right decision let alone represent the people of South Australia with its limited representation in the House of Representatives compared to the eastern states.

Former South Australian Premier Don Dunstan would never have allowed the management of the Murray Darling to allow the Lower Lakes and the Coorong to dry up. He must be turning in his grave given COAG's priority to establish water trading as a management solution. The Australian Editorial 5/8/2008 pointed out that 5,300 billion litres (5,300 GL) was diverted from the MDB in 2006-7 for farming, town and other uses was the lowest in a quarter of a century due to the severity of the drought. COAG has failed to ensure the Murray Darling gets a fair share of water to conserve the river as intended by our founding fathers in section 100 of the Australian Constitution.

Federal Government's Competition Policy

The market reform agenda was forced on states by the Commonwealth under the guise of Competition Policy in the mid 90's and none of the parties, including the media, involved in supporting water reform have been brave enough to explain to the Australian people that establishing a market in river water is privatisation. It also explains why progress has been so slow and neither the government nor the reform movement have initiated a public inquiry such as a Royal Commission or sought the democratic authority to establish a market to enhance the privatisation of the water of the Murray Darling. It is being done by stealth by the reform movement without publicly surfacing what is precisely wrong with current policies, management arrangements and governing laws.

In these circumstances a Royal Commission must be held to determine what is wrong with the management of the MDB and its governance and to make recommendations to address the problems even if that requires changing the Australian Constitution.

Apart from the NSW Government's $105 million RiverBank scheme as far as I am aware state governments have not purchased water from the Murray Darling because clause 100 of the Australian Constitution bestows water rights to the states and the state governments license the use of river water and regulate its use. Why purchase what you own, control and whose flow depends upon the vagaries of the climate? The NSW Government's RiverBank scheme purchase of "water access licenses" underscores the point, why is it purchasing a water access license it granted in the first place?

The Rudd government is the first Australian Government in history to purchase river water in 2008 and presumably is using clause 51 (xxxi) of the Australian Constitution to overcome clause 100 now that a water market is operating between states. The Commonwealth is purchasing water licenses from "willing sellers" within a state and not from state governments. The whole idea of purchasing water from "willing sellers" lacks any strategic focus on the part of governments as to what purpose the water was being used, its reliability (security) and whether it is being used to serve domestic or overseas markets. There is a risk the wrong water is being purchased from "willing sellers". Compensation as part of any structural adjustment of water allocation needs to be looked at on a case by case basis and be jointly funded by state and federal governments.

The Queensland government tried to auction water from the Warrego to the market in 2007, despite the drought, but was eventually stopped by the Howard Government. The selling of water licences by state governments also needs to be stopped, as it is another foundation stone in the market privatisation of the waters of the Murray Darling.

Exporting Water

Professor Randy Stringer of the University of Adelaide recently pointed out in a University of Adelaide Water Wednesday (www.water.adelaide.edu.au/events/) lecture on 2/7/08 that Australia exports a net 4,000 GL of water in agriculture products. This data comes from 2001 figures on page 137 of Farmhand's "Talking Water" report 2004. This begs the question of just how much of MDB's water is being used for export that has been either extracted or prevented from flowing into the river systems, it is time Australian knew the precise use of MDB water by all users, again this needs to be a matter addressed by a Royal Commission.

As recently as 28/6/08 Cubbie Station in Queensland announced that it plans to expand to grow food crops and wants to capitalise on world food shortages and high prices. Fair Water Use (Australia) believes the water storage capacity of the Cubbie Group is around 537 GL of MDB water. Just 50 GL of water held by the Cubbie Group would save Adelaide the expense of building a desalination plant! This is an unacceptable outcome of current water policy and clearly a market solution is not going to be the answer, as markets can only put self-interest first, not the collective interests of the rivers and the citizens of Australia as a whole. This can only be done and must be done by governments acting for the will of the people.

Alternative Policies and Strategies

At a time when climate change needs to be taken into account, societies and economies must be redesigned to ensure goods and services are produced and consumed with the least-possible utilisation of resources. This means that our food must to be produced as close as possible to the point of consumption and the needs of local markets must rank ahead of interstate and export markets. It goes without saying that looking after the end-to-end health of the Murray Darling needs to be an absolute priority and the needs of Australian citizens who directly rely upon its water supply and food production.

If the Federal Government truly has the interests of the Australian people and MDB at heart they should announce a Royal Commission: an open and transparent public Commission of Inquiry into the management of the MDB, including water withheld from the river (public and private), ground water, category of water use (type of crop to meet a domestic or export market), the health and environmental condition of dependent ecosystems, the impact and consequences of water reform, and current governance. It should also propose policies and actions that must be adopted by governments to address Australia's cyclic weather patterns and the consequences of climate change.

Given the current state of affairs, COAG needs to think carefully and begin the redemption process by declaring a State of Emergency in the MDB. A moratorium must be placed on water trading during this period. The reliance on the water market is not a substitute for effective water policy designed to secure the health and competitive position of Australians given climate change.

Effective water policy necessitates the states assuming control of all water, including that withheld from the Murray Darling by private interests and ground water, for the remainder of the drought and until such time as the Federal Government Royal Commission reports. COAG must direct the Murray Darling Basin Commission and regional water management bodies to implement emergency measures as follows:

• Critical domestic needs are put first to focus on sustaining the health and conservation of the Murray Darling system.
• Irrigators are able to meet the needs of Australians for food at an affordable price both now and in the future that enhances Australian's competitive position against imports i.e. like all costs the cost of water needs to be kept as low as possible.
• Reallocating water based upon domestic needs first (high-reliability water) and export use second (low-reliability water), taking into account the inherent variability of Australia's climate.
• Agricultural and industry pursuits must be appropriate given water availability and taking into account not only economic but environmental impact and climate change.
• All other options for sourcing and effectively using water are thoroughly researched and developed to improve the range of available options in times of severe drought and to ensure appropriate use of water in the good times.
• A Drought/Disaster Management Master Plan needs to be established for the MDB that addresses the above principles.

In Victoria the Bass Shire Council passed a motion on the 18th June 2008 "That this Council, informed by its research and investigation, believes the Government?s decision to commit to a desalination plant at Williamson?s Beach should be reversed. Council calls on the Premier, Hon. John Brumby MP, and the Victorian State Government, to abandon the decision to construct a desalination plant and to instead hold a comprehensive, open and transparent inquiry into options for Victoria?s water supply. Council believes that the outcome of such an inquiry should inform future Government decisions."

15th August 2008
 

References & Further Information

ABC Landline "The future of Managed Investment Schemes" 25th February 2007
http://www.abc.net.au/landline/content/2006/s1853485.htm

ABC News "Aust breaching Ramsar wetlands deal: water expert" 11th August 2008 (Associate Professor David Paton, of Adelaide University)
http://www.abc.net.au/news/stories/2008/08/11/2330550.htm

ABC News "Cubbie expansion sparks Murray-Darling fears" 28th June 2008
http://www.abc.net.au/news/stories/2008/06/28/2288704.htm

ABC News "Govt grilled on Murray-Darling rescue plan" 15th August 2008
http://www.abc.net.au/news/stories/2008/08/15/2335992.htm

ABC News "Lawyer raises doubts over water unbundling legislation" 2nd October 2007
http://www.abc.net.au/news/stories/2007/10/02/2048378.htm

ABC News "Paroo satellite snaps anger Murray-Darling farmers" 15th August 2008

http://www.abc.net.au/news/stories/2008/08/15/2336025.htm

ABC Radio PM "Murray River in need of more water" 26th September 2003
http://www.abc.net.au/pm/content/2003/s954742.htm

Australia's Gateway to Irrigation Information "Buying and Selling"
http://www.irrigate.net.au/water_trading/buying_selling/index.shtml

Bass Shire Council "Bass Coast walks from Desalination Plant" 20th March 2008
http://www.basscoast.vic.gov.au/content/content.asp?cnid=3724&ctid=

Blue Planet Project  Global Campaign (Canadian) for "Water Justice" (Maude Barlow is author of Blue Covenant)
http://www.blueplanetproject.net/

Conservation Council of South Australia "Save the Murray" campaign:
http://www.ccsa.asn.au

Council of Australian Governments "COAG website"
http://www.coag.gov.au/

Country News "Investing in Water Savings ? A Goulburn System Project":
http://www.countrynews.com.au/GoulburnSystemProject.asp

Dissent No 27 Spring 2008 Editorial "World Water Scam"
http://www.dissent.com.au/dissent_27_summary.htm

Fair Water Use (Australia) Campaign "Revive the Murray-Darling basin"
http://www.fairwateruse.com.au/

Farmhand "Talking Water" 12 Part Report 2004
http://www.farmhand.org.au/

Goulburn-Murray Water
http://www.g-mwater.com.au/

Government of South Australia Water Trading Overview "Water Trading in South Australia"
http://www.dwlbc.sa.gov.au/licensing/trading/index.html

Independent Murray Darling Basin Commission: Ian Kowalick 30th July 2008
http://www.news.com.au/adelaidenow/story/0,22606

Inland Rivers Network (NSW) Latest news "Help buy water for Warrego"
http://www.irnnsw.org.au/

Living Murray Submission 129 "For the Sake of the Murray" S. John Caldecott 11th February 2003
http://xlivingmurray.mdbc.gov.au/__data/page/224/129.pdf

Municipal Association of Victoria "Ratepayers benefit from $18.1m water unbundling package" 26th September 2007
http://www.mav.asn.au

Murray Darling Basin Commission (latest issue of the Murray Darling Basin Agreement is June 2006 165 pages)
http://www.mdbc.gov.au/home

Murray Darling Basin Commission Natural Resource Management "Water Trading" 16th March 2007
http://www.mdbc.gov.au/home

National Conservation Council of NSW "Win for the Warrego River" circa September 2007
http://nccnsw.org.au

Nature Conservation of NSW "Crack down on floodplain harvesting a good first step"
http://nccnsw.org.au/index

NSW Government Department of Environment and Climate Change  "Water access licence purchase (RiverBank)" 24th April 2008
http://www.naturalresources.nsw.gov.au/water/dealings1.shtml

NSW Government Media Release - Department of Water and Energy "Floodplain Harvesting Policy to Provide Security for NSW Rivers and Communities" 3rd July 2008
http://www.naturalresources.nsw.gov.au/mediarelnr/mr20080703_3902.html

NSW Government Natural Resources  "Water access and trade"
http://www.naturalresources.nsw.gov.au/water/licensing.shtml

NSW Government Natural Resources  "Water sharing plans"
http://www.naturalresources.nsw.gov.au/water/plans.shtml

NSW Government Natural Resources "Licensing under the Water Management Act 2000: Dealings in Water"
http://www.naturalresources.nsw.gov.au/water/dealings1.shtml

Parliament of Australia The Senate "The Australian Constitution"
http://www.aph.gov.au/SEnate/general/constitution/index.htm

Parliament of NSW  "Snowy Hydro Corporatisation Bill" 13th November 1997
http://www.parliament.nsw.gov.au

Parliament of NSW Minister For Land And Water Conservation "Motion of Censure" 8th April 1997
http://www.parliament.nsw.gov.au/prod/PARLMENT

Plug the Pipe Campaign (Victoria) ? campaigning against plan to pipe 75 GL per year from Goulburn River to Melbourne.
http://www.plugthepipe.com/

River Lakes and Coorong Action Group Inc. (RLCAG)
www.riverlakescoorong.com.au

Stop The Weir Campaign (South Australia) ? campaigning against the South Australian Government's plans to build a weir at Wellington and block water off from flowing into the Lower Lakes of the Murray.
http://www.stoptheweir.com

The Advertiser (Adelaide) "Save the Murray" Feature:
http://www.news.com.au

The Advertiser Editorial "Out of sight, lakes' plight ignored" 8th August 2008
(Calls for a State of Emergency and Royal Commission)
http://www.news.com.au/adelaidenow

The Age "Tired of waiting, Howard set to detonate water bomb" 25th January 2007
http://www.theage.com.au

The Australian "Fresh move to privatise Snowy Mountains Hydro scheme" 2nd August 2008
http://www.theaustralian.news.com.au

The Australian "Minister attacks farm-based managed investment schemes as a 'disgrace' 25th July 2008
http://www.theaustralian.news.com.au/story

The Sun Herald "Good harvest for Managed Investment Schemes" 2 July 2008
http://www.news.com.au/heraldsun/story/0,21985

The Sun Herald "Managed investment schemes in return" 1st December 2007
http://www.news.com.au/heraldsun/story

The University of Adelaide Professor Mike Young "A future-proofed Basin" 2008
http://www.myoung.net.au/water/count.php?para=13

The University of Adelaide Water Research Cluster Water Events in 2008: The second "Water Wednesday" seminar was held on 2 July 2008.
http://water.adelaide.edu.au/events/

Victoria Government The Department of Sustainability and the Environment Victoria Water Register "Unbundling"
http://www.waterregister.vic.gov.au/Public/Unbundling.aspx

Your Water Your Say "Bass Coast Shire Council?s Motion 18th June 2008" (Against Desalination in Victoria)
http://www.yourwateryoursay.org/2008/06/19

Your Water Your Say Campaign (Victoria) ? campaigning against the Victorian's Governments plans to build a 150 GL Desalination Plant in Bass.
http://www.yourwateryoursay.org/

Revision History

Article dated 14/8/2008 provided to Senator Hon John Faulkner at the Hallett Cove Community Cabinet Meeting.

Article dated 15/8/2008 (-1) Para "The advocates of reform ?" revised and ABC News Links added (x2) dated 15/8/2008. General edits to improve syntax for posting on http://www.fairwateruse.com.au/