The Federal Government’s announcement it is advertising for projects to save water for the Murray-Darling Basin has sounded an alarm for Victorian water groups.
Federal Water Minister David Littleproud has announced the tenders for $1.5billion of water efficiency projects and promised they would deliver water savings without hurting basin communities.
However, Goulburn Murray Irrigation District Water Leadership Group co-chair David McKenzie warned the expression of interest process seemed like buyback by stealth, given participants apparently did not need to independently prove their infrastructure project resulted in water savings.
‘‘Past experience tells us participants will just go into the market to replace what they sold with Victorian and NSW entitlements at a lower price than they received from the Commonwealth,’’ Mr McKenzie said.
‘‘It doesn’t take a genius to work out this will drive up water entitlement prices for everyone across the southern Murray-Darling Basin.’’
The Commonwealth’s announcement it will pay 1.75 times the going market rate for water entitlements amounts to a deliberate inflationary intervention in an already overheated water market.
High-reliability entitlements are currently selling about $3300/Ml in Victoria and $3500/Ml in South Australia.
The Commonwealth expressions of interest effectively offers urban, industrial and SA irrigators $6000/Ml.
GMID Water Leadership Group co-chair and State Member for Shepparton Suzanna Sheed said it was highly irresponsible for any government to interfere in the market in this way and further undermine irrigated agriculture’s commercial viability in the southern basin.
‘‘We understood that the ministerial council agreement last month to develop additional socio-economic impact criteria would apply to all additional water recovery — urban, industrial, off-farm and on-farm,’’ Ms Sheed said.
‘‘Now we learn the Commonwealth apparently will only apply that additional criteria to on-farm projects in Victoria and NSW.
‘‘It is hard not to see this as a deliberate attempt to divide and conquer by putting pressure on Victoria and NSW to give their irrigators access to the same deal being offered to irrigators in other states.
‘‘Such cynical tactics are extremely disappointing, and show a total disregard for the socio-economic and water market impacts of recovering more water from the irrigation pool.
‘‘A smaller pool inevitably means reduced production, higher prices and more job losses, particularly in dry years.’’
As recently as June, Mr Littleproud said the Commonwealth needed further work to develop detailed additional criteria defining neutral or positive socio-economic impacts.