Billions down the drain

That’s the headline on my opinion piece in yesterday’s Fin, over the Fold

Billions down the drain

The resignation of Mike Taylor as chair of the Murray Darling Basin Authority reflects a dispute over the interpretation of the 2007 Water Act, under which the MDBA has drawn up its draft Basin Plan. The Guide to the Plan, released a couple of months ago, attracted immediate outrage. Copies were burned at public meetings held in communities in the Basin.

The public dispute has arisen because the MDBA has interpreted the Act as requiring that environmental needs for water should receive absolute priority, while the government says that the Act requires environmental, economic and social impacts of policy to be taken into account.

Regardless of the legalities, a sensible policy must take all impacts into account, and the MDBA did so in the draft plan. The central argument underlying its proposal for a return of 3000 to 4000 gigalitres of water to the environment was that anything less would not be sufficient to restore ecosystems to a sustainable level while anything more would impose unacceptable social and economic costs.

The real problems with the Basin Plan and the Water Act go much deeper. They involve policy mistakes made by the Howard Government when the National Water Action Plan was announced, and perpetuated under Labor.

More importantly, they reflect a misconceived policy focus, in which discussions of the social and economic impacts of planning for the Basin are discussed almost entirely in terms of the size of the irrigated agriculture sector.

The centrepiece of Howard’s Plan was a $10 billion bucket of money allocated to fixing Australia’s water problems and particularly those of the Basin. The plan was conceived almost entirely in engineering terms, and based idea of saving water currently wasted through processes like seepage from unlined channels.

In reality, most water ‘lost’ through seepage returns to the environment in one way another. Very few cost-effective measures to increase water use efficiency have been identified.

Howard’s plan included $3 billion allocated to the purchase of water rights from irrigators willing to sell them, but this was seen as a last resort, and almost nothing was done in his government’s final year of office.

When Labor came to office, the priorities were reversed and the main focus was on purchase from willing sellers. The effort was highlt successful. Entitlements with an average annual allocation of 700 GL have been purchased at a total cost of around $1.5 billion. The $10 billion allocated to the MDB is more than sufficient to purchase enough water for the sustainable environmental allocation of 3-4000 GL identified by the MDBA. There is no need for any cuts in entitlements for irrigators who do not wish to sell.

But Labor’s Water for the Future Plan no fundamental changes in policy. The allocation of more than $6 billion to engineering works remained. Critically, the MDBA continued to work on the basis that its job was to identify the amount of water needed for the environment. It was up to governments to work out how the water would be obtained.

This approach made a nonsense of modelling work on the economic and social impact of the proposals. Without assumptions on the way in which policy is financed and implemented, it is impossible to determine the social and economic impact.

Unsurprisingly, this approach was framed, in public discussion as proposing ‘cuts’ to irrigators’ allocations. Despite repeated statements from the Gillard government that no one would have their entitlement reduced unless they chose to sell, the MDBA did nothing to dispel this presumption, which has remained dominant – media coverage of the issue has continuously referred to “water cuts”.

The economic impact of purchases of entitlements is radically different to that of across-the-board cuts, with or without compensation. Expanded purchases will leave irrigators better off, not worse. The main potential losers are farm employees and business in country towns, who will face reduced demand if farmers shift from irrigation to less intensive dryland agriculture. Even here, the impact will be modest in most parts of the Basin, where irrigation is a relatively small part of economic activity. But some towns will face a significant adverse shock.

A focus on the real winners and losers points up the foolishness of spending billions of dollars subsidising irrigation infrastructure. This money could be far better spent on social infrastructure, aimed both at addressing existing deficiencies and at assisting the adjustment to new sources of economic activity, including tourism and service activities as well as dryland agriculture.

69 thoughts on “Billions down the drain

  1. @Alice

    Most people accept that there is a limit (and I’m amongst “most people” on this). My reservations turn on where those limits are, when we have to act, and in what ways, given that such policies will have serious costs.

    It seems to me that given the uncertainties and risks associated with resource depletion, if policies that were warranted on other grounds (and that respected equity and human rights) could be devised then such policies would pass the no regrets test. We don’t need to be confident that failure to curb population growth would be disastrous.

    Quality public education in developing countries, improvements in the status of women, contraceptive availability (especially condoms) high quality health care, secular governance, industrialisation and so forth would almost certainly curb population growth. Such policies are especially germane in equatorial and sub-saharan Africa and the sub-continent/south Asia, which two regions are most in need of development and likely to contribute principally to world population growth.

    Rather than focusing on population growth curves, one should orient policy towards equity and empowerment, putting more resources into looking after the needs of the people we have. If we do that, we get a fairer world, and population growth should abate to something like replacement and perhaps drift downwards over the next couple of centuries.

  2. Jill@7, The major difference is that the farmers who spent their own money on water savings retain the full benefits themselves and don’t have to surrender entitlement to the govt.

    Sam, presumably the red sea is surrounded by desert because it doesn’t rain much in the first place. Adding a small amount of evaporated water to a dry atmosphere really won’t do anything. Now I don’t wish to make out that irrigation induced evaporation makes a big difference in the MDB, but it would have a much larger effect than the Red Sea. We have moisture bearing weather patterns, and we also have higher ground in our catchments, which are in the East to which our patterns generally head.
    Something in the order of 500,000GL falls as rain in the MDB, so the 15000GL evaporating from fields, storages and distribution could constitute in the region of 3% .

  3. @Fran Barlow
    says “Quality public education in developing countries, improvements in the status of women, contraceptive availability (especially condoms) high quality health care, secular governance, industrialisation and so forth would almost certainly curb population growth.”

    Except that its not happening – what is happening is greater polarisation between the rich and the poor, an absolute obsessive approach by governments whether right or supposedly “left” ha ha (like labor Australia which has in fact been infiltrated by yanks in the ranks and other assorted right wing types like Mark Arbib to push neo liberal agendas down peoples throats).

    Public investment in anything is a dirty word these days Fran no matter the government. You should know that. So you can cross out your “quality public education.” Only those who can afford it are increasingly getting an education. Go ask the British students.

  4. @Alice

    Plainly, I believe in the value of quality public education everywhere including, of course in the UK, but it’s especially urgent in the developing world.

    The UK situation is horrible in a broader sense because the Con-Dems are taking an axe to money to universities for teaching services and research as well.

    That said, at least in the UK literacy and numeracy is high, and the proportion of kids of both sexes having continuous education until at least 16 years of age is very high. Excluding immigration, population growth is far lower than in the places from which the bulk of world population growth will probably come.

  5. @Fran Barlow
    The rise ( a tripling) of tertiary education fees in the UK is an action by an upper class tory government and its complicit con dems (more con that dems) on the poor.
    It is an act of class warfare.

    Th Clegg government deserves every bit of hatred, every bit of student rebellion, every bit of thuggish lout behavior from students (as Clegg would call it) they get from this. The real thugs are wearing suits in parliament.

  6. I have recently heard, from a company rep who drove throught the area, that in and around Shepparton they are instaling some sort of plastic lining to all the open, dirt bottomed irrigation channels.

    This may appear commendable at first glance, but as an SA irrigator operating from a system which has been pipelined for 15 years I believe the Victorian Government is f..ked in the head. These minimally rehabilitated channels now require fencing both sides because wildlife trying to cross the channel are trapped by the slippery sides. Now the wildlife will be trapped on either side of the fence and they still have a system which must be pipelined! It could also be a complete waste of money if some communities sell out their water entirely.

    If we had a stable, regulated agricultural sector, one could determine which commodities could be economically grown with an efficient irrigation infrastructure. Once that was known, on farm water needs would be known which would then be a reliable basis for calculating pipe sizes and costs for a proper rehabilitation of a system.

    Leaving it to the market leads to enormous waste, as JQ said billions, before everything sorts itself out. The most ‘apparently’ efficient crops and methods may not be the most desirable as food and bio security concerns should trump the market. I believe local wealth and local jobs can trump ‘apparent’ efficiency as long as best practice is employed as much as possible.

    Alice has argued wonderfully for local producers while I have been working today. Thanks for that Alice.

    Iconoklast, great work arguing against Fran Barlow on overpopulation. I wish I could have been here to support you but remember that a strong enemy can only make you stronger, and that many others were reading the debate. Just remember that Fran is mostly on our side but is a bit misguided on n…..r power and overpopulation:) At least she didn’t invoke Xenophobia which is a major improvement from her side of the debate.

  7. “Plainly, I believe in the value of quality public education everywhere … in the UK literacy and numeracy is high”

    You (and Alice) might find these two excerpts interesting:

    In 2007, the government set a new target, to help 95% of the adult population achieve enough literacy and numeracy to get by in life by 2020.

    Compare with the situation before “quality public education everywhere”:

    Click to access educn016.pdf

    In 1839 a survey in Hull showed that out of the 14,526 adults (aged over 21), 14,109 had attended day or evening school, and only 1054 could not read: 92% of the population, in other words, could read. These adults would almost all have learned to read prior to the beginnings of state subsidies to private schools in 1833, subsidies which in any case remained very small throughout the 1830s. The development of steam printing in the 1830s dramatically reduced the cost of producing newspapers, which greatly expanded their circulation, despite restrictive taxes. After advertising duties were removed in 1853, stamp taxes in 1855 and excise taxes on paper in 1861, newspaper sales increased still further. Despite the state’s efforts to prevent them[NB This is a reference to earlier examples of cracking down on paper and books by the government – J], working-class people had succeeded in establishing near-universal literacy, through the use of private education, long before the state established a single school of its own. While state subsidies to schools steadily increased between 1833 and the 1870 Education Act, two-thirds of school expenditure was still coming from voluntary sources as late as 1869. Literacy was achieved from a variety of educational establishments: the Mechanics Institute, the Literary and Philosophic Societies, Sunday Schools, home tuition and private schools, as well as church schools. In 1813 James Mill, the classical liberal philosopher and father of John Stuart Mill, described

    the rapid progress which the love of education is making among the lower orders in England. Even around London, in a circle of fifty miles radius, which is far from the most instructed and virtuous part of the kingdom, there is hardly a village that has not something of a school; and not many children of either sex who are not taught more or less, reading and writing. We have met with families in which, for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.6

    Parliament’s Report on the Education of the Lower Orders in 1818 concluded that “There is the most unquestionable evidence that the anxiety of the Poor for education continues daily increasing…and the means of educating the Poor are steadily increasing.”7 A Parliamentary survey published in 1835 showed that the numbers in schools had increased from 478,000 in 1818 to 1,294,000 in 1834 “without any interposition of the Government or public authorities”.8

  8. Perhaps the MDBA and Governments are mired in traditional thinking and it may be better to apply some thinkers in residence to the problem. The El Nino La Nina cycle is far better understood now and opportunity crops as well as periodic flooding of wetlands can be incorporated into what is already a regulated river system but to better benefit for the environment and commerce.

    Rojo made me aware that opportunity croppers must bear infrastructure costs even when they have no water. This only increases pressure to take water when it shouldn’t be taken. What can be done to ease the damage from floods by using opportunity crops? Floods are a part of the Australian ecosystem so how can we work within them for better outcomes for environment and commerce?

    We seem to have all the physical means at our disposal for regulating water for drought but are there other things that could be done to get us through droughts?

    Perhaps we should not be condeming anyone in regards to reform of the MDB except in expecting that the solutions are within our grasp. The vagaries of markets and globalization are at the very core of the problem because without some sort of known return on investment we could be and possibly are wasting billions.

  9. @Jarrah

    You know Jarrah, as a teacher, I do tend to take remarks on educational assessment rather more seriously than many. So when you adduced this 1839 Hull “survey”, the methodology of which as far as I can tell is completely undocumented, I began fleshing out a satirical response reminiscent of the witch-lynching scene in Monty Python’s Holy Grail. When you added James Mill in 1813, to impute learning from the existnece of school buildings, I felt sure that what you were doing would ttract the blogospheric term: Poe. You are rather too clever to be doing anything but parody. Well played! You had me going for a moment or two!

    Let it simply be stipulated that:

    a) the objects, scope and tracking of contemporary literacy assessment;
    b) the integrity of the methodologies;
    c) the context of assessment and the nature of the pools


    d) the design of assessment and reporting

    is so different from and better than anything that might have been undertaken in Hull of 1839 as to invite a hearty chuckle if not snorts of derision at anyone advancing such as probative.

    But you knew that of course?

    On a more serious note, I’d be surprised if the general level of literacy in seven of the top nine sources of likely world population increase: India, Pakistan, Nigeria, Democratic Republic of the Congo, Bangladesh, Uganda, Ethiopia were measurably better than Hull of 1839. In places where women are differentially disempowered, the population as a whole poor and ill-educated, one may expect far higher birth rates.

    The other two on that list, (China and the US) almost certainly are better than Hull of 1839. China’s on this list because it already has about 1.3bn people despite its one-child policy and any increase is large in absolute terms. Declining general standards of education (especially in the US south) and the growing religiosity of that party of the US is probably the key driver of population growth there. Of course, religion — in particular catholicism — is a key driver of population growth in the LDCs.


  10. @Fran Barlow
    Literacy and Numeracy Test, 1839:
    “Can you spell your name for me, please? O..A..T..S. Can you write your name here please? OATS. One last question: how many letters in your name? FOUR. Thank you sir, you are literate and numerate, well done!”

  11. The three Rs were better 40 years ago when private schools were the minority Jarrah (except catholic). Neoliberalism hasnt helped education. Check first year uni students assignments and wonder what happened. Don is right above. People left school earlier before public education was enshrined in this country shortly after the turn of the century (“every child shall have access to free education”) and lots couldnt manage more than an X for a signature in Australia.
    We did well and now some want to undo it.

  12. @Donald Oats

    I rather have an image of some chap wanding up to some worthy in a field and saying something like:

    Tell me good sir, what does that sign yonder say? [indicates sign]
    Local Worthy:
    arr … that says the village of Swine be that way, just past the well
    Examiner:And do all you other gentlemen agree? [motions to others in field]
    Other Local Worthies:‘course we do!
    Examiner:Good enough! You are all men of letters! Well done!

    Examiner leaves intending to ask the local vicar if everyone reads their bible every day in the time left over after working fourteen hours per day under some weaving machine.

    First Local Worthy:Did you catch what that pillock in the hat said about letters?
    Other Worthy:I think ‘e said we were getting some.
    First Local Worthy:I hope not. I got no time to be visiting the vicar to explain letters to me

  13. My excerpts aren’t meant to be definitive, but conducive to critical thinking about the necessity of public education, and its effectiveness.

    As for the surveys and tests, since there isn’t any method listed, you can imagine whatever amusing scenarios you like. I wouldn’t be so sure, though. Just because it happened a long time ago doesn’t mean it was crap:

    Exam papers taken by 11-year-olds applying for places to King Edward’s School in Birmingham in 1898.


    1. Write out in your best handwriting:—

    ‘O Mary, go and call the cattle home,
    And call the cattle home,
    And call the cattle home,
    Across the sands o’ Dee.’
    The western wind was wild and dank with foam,
    And all alone went she.

    The western tide crept up along the sand,
    And o’er and o’er the sand,
    And round and round the sand,
    As far as eye could see.
    The rolling mist came down and hid the land —
    And never home came she.

    2. Parse fully ‘And call the cattle home.’

    3. Explain the meaning of o’ Dee, dank with foam, western tide, round and round the sand, the rolling mist.

    4. Write out separately the simple sentences in the last two lines of the above passage and analyse them.

    5. Write out what you consider to be the meaning of the above passage.


    1. On the outline map provided, mark the position of Carlisle, Canterbury, Plymouth, Hull, Gloucester, Swansea, Southampton, Worcester, Leeds, Leicester and Norwich; Morecambe Bay, The Wash, Solent, Menai Straits and Lyme Bay; St Bees Head, The Naze, Lizard Point; the rivers Trent and Severn; Whernside, the North Downs, and Plinlimmon; and state on a separate paper what the towns named above are noted for.

    2. Where are silver, platinum, tin, wool, wheat, palm oil, furs and cacao got from?

    3. Name the conditions upon which the climate of a country depends, and explain the reason of any one of them.

    4. Name the British possessions in America with the chief town in each. Which is the most important?

    5. Where are Omdurman, Wai-Hei-Wai, Crete, Santiago, and West Key, and what are they noted for?


    1. Write in columns the nominative singular, genitive plural, gender, and meaning of:— operibus, principe, imperatori, genere, apro, nivem, vires, frondi, muri.

    2. Give the comparative of noxius, acer, male, diu; the superlative of piger, humilis, fortiter, multum; the English and genitive sing. of solus, uter, quisque.

    3. Write these phrases in a column and put opposite to each its Latin: he will go; he may wish; he had; he had been; he will be heard; and give in a column the English of fore, amatum, regendus, monetor.

    4. Give in columns the perfect Indic. and active supine of ago, pono, dono, cedo, jungo, claudo.

    Mention one example each of verbs followed by the nominative, the accusative, the genitive, the dative, the ablative.

    5. Translate into Latin:—

    1. The general’s little son was loved by the soldiers.
    2. Let no bodies be buried within this city.
    3. Ask Tullius who found the lions.
    4. He said that the city had been taken, and, the war being finished, the forces would return.

    6. Translate into English:—

    Exceptus est imperatoris adventus incredibili honore atque amore: tum primum enim veniebat ab illo Aegypti bello. Nihil relinquebatur quod ad ornatum locorum omnium qua iturus erat excogitari posset.


    1. What kings of England began to reign in the years 871, 1135, 1216, 1377, 1422, 1509, 1625, 1685, 1727, 1830?

    2. Give some account of Egbert, William II, Richard III, Robert Blake, Lord Nelson.

    3. State what you know of — Henry II’s quarrel with Becket, the taking of Calais by Edward III, the attempt to make Lady Jane Grey queen, the trial of the Seven bishops, the Gordon riots.

    4. What important results followed — the raising of the siege of Orleans, the Gunpowder plot, the Scottish rebellion of 1639, the surrender at Yorktown, the battles of Bannockburn, Bosworth, Ethandune, La Hogue, Plassey, and Vittoria?

    5. How are the following persons connected with English History,— Harold Hardrada, Saladin, James IV of Scotland, Philip II of Spain, Frederick the Elector Palatine?


    1. Multiply 642035 by 24506.

    2. Add together £132 4s. 1d., £243 7s. 2d., £303 16s 2d., and £1.030 5s. 3d.; and divide the sum by 17. (Two answers to be given.)

    3. Write out Length Measure, and reduce 217204 inches to miles, &c.

    4. Find the G.C.M. of 13621 and 159848.

    5. Find, by Practice, the cost of 537 things at £5 3s. 71/2d. each.

    6. Subtract 37/16 from 51/4; multiply 63/4 by 5/36; divide 43/8 by 11/6; and find the value of 21/4 of 12/3 of 13/5.

    7. Five horses and 28 sheep cost £126 14s., and 16 sheep cost £22 8s.; find the total cost of 2 horses and 10 sheep.

    8. Subtract 3.25741 from 3.3; multiply 28.436 by 8.245; and divide .86655 by 26.5.

    9. Simplify 183/4 – 22/3 ÷ 11/5 – 31/2 x 4/7.

    10. Find the square root of 5.185,440,100.

    11. Find the cost of papering the walls of a room 16ft long, 13ft 6in. wide, and 9ft high, with paper 11/2ft wide at 2s. 3d. a piece of 12yds in length.

    12. A and B rent a number of fields between them for a year, the rent and other expenses amounting to £108 17s. 6d. A puts in 2 horses, 5 oxen and 10 sheep; and B puts in 4 horses, 1 ox, and 27 sheep. If a horse eats as much as 3 sheep and an ox as much as 2 sheep, how much should A and B each pay?

  14. Alice :
    @ken n
    Ken n says “We swap navel oranges with the US – we sell in winter and buy in summer”. not quite again Ken n.
    Tell that to the once owners of the thousands of acres of much juicier, mush fresher slightly paler and slightly more greener looking in parts (because the sun does it) orchards of valencias we used to grow here that have been bulldozed because the US developed a more orange looking orange, with a bigger pith and girth, which Woolworths happily stocks, but which is as dry as a bone and comparatively (to Valencias) juiceless by the time it gets here.

    One issue here that many people aren’t aware of is, oranges don’t simply turn orange when they are ripe, the way most fruit changes colour when it ripens. They do it once they are ripe and are hit with a cold shock. It could well be that Australian oranges simply don’t get as much of that; you’d have to ask a specialist to get more precise information, though.

  15. @P.M.Lawrence
    The green shades on a valencia are some sort of sun protection – according to “oranges Australia” website – this is not a very scientific description though…
    “•Valencia has a green tinge on the skin which is actually nature’s own suncscreen! It protects the orange from the hot climate in Australia at that time of the year.”

    What you say seems to fits PM.. because it doesnt get enough of a cold shock in such a hot country. Its also known as “regreening” and happens at the warmer time of year. Valencias are greener than most other local oranges also because they are the only orange grown in Australia at the height of summer. The Valencia is also apparently at its sweetest when there are those green tinges on them.

  16. @Jarrah

    I’m betting the “11-year-olds” who “passed” that test had someone cheat on their behalf. This was a test designed to exclude everyone outside of the cultural elite rather than to test accomplishment.

    I’m also betting it wasn’t administered in Hull in 1839 to 14,000+ persons.

  17. “I’m also betting it wasn’t administered in Hull in 1839 to 14,000+ persons.”

    A safe bet. But it does suggest that your suppositions (regarding design, scope and integrity of literacy tests) might not be as close to the mark as you’d like to think.

  18. Also, the test is genuine and was taken under exam conditions as we today understand them. Your scare quotes are indicative of your biases, not reality.

  19. @Jarrah

    For pity’s sake Jarrah — I took you for better than this.

    I expect nongs like Michael Duffy to run with this. Who cares if Edwin West thinks undocumented material is the kind of thing that serves the libertarian cause?

    The question is — why are you running with this sub-intellectual japery? You surely know that it proves nothing at all about general literacy in 1898. You also have zero evidence about the integrity of the test or to what extent it was actually used to admit upper class twits to their elite fraternity.

    You’re merely miffed that I called you on it. If you wish to debunk public education, you’ll need something better than anecdata and a passion for all things private and ad hoc.

    And just for the record, there were at least four mistakes in the composition of that test. That tells me something salient.

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