The Murray Darling Basin: the end of an era

I first started working on the problems of the Murray-Darling river system 30 years ago, just as the great expansion of irrigated agriculture was reaching its limits. I’ve done a lot of different things since then, but kept on coming back to this issue. For a brief moment after the election of the Rudd government and the implementation of the Water for the Future plan, it seemed like Australia finally had the policy right. The government would buy back enough of the water rights it had given away in the past, and use them to restore something close enough to natural flow patterns to protect the most vulnerable natural environments. The money spent on the purchases would ease the pain of the adjustments that have been going on for decades anyway, as a result of “closer settlement” policies that encouraged the creation of farms too small to support a family properly.

All of that fell in a heap with the disastrous mismanagement of the Draft Basin Plan, which led to its rejection first by irrigators instead of the government. At this point, the process reverted to the time-honored patterns of political horse-trading and I announced a year or so ago that I was moving on. Now the Basin Plan is finally law. The best that can be said is that it is not the disaster it might have been. Billions of dollars have been allocated to infrastructure boondoggles, and the allocation of water to the environment is less than what is needed. But the 2750 GL environmental allocation is much more than seemed remotely plausible a decade or so ago, and there seems to be some effort to stop the most wasteful infrastructure project.

Meanwhile, on the academic front, I’ve had one last gift from my decades of work on this topic, with a publication in Nature Climate Change, something I’ve long aspired to. Admittedly, I’m listed last among nearly 20 authors of an article that’s only a few pages long. I wrote a fair bit in the drafting process, but only a couple of sentences ended up in the final paper. Still, that’s the way things are done in the natural sciences, so I’m not going to complain. For those who can’t get access, the shorter version is that, while Australia hasn’t done a great job with the management of our water resources, we are still doing better than anyone else.

As I’ve mentioned before, I’ll be starting a new Australian Research Council Laureate project next year, on bounded rationality and financial crises. I’ll also continue working on climate change, and may touch on the issue as it relates to the Basin. But, apart from that, I think it’s time to declare an end to my work on the Murray. I think the work I put into this problem, along with many other natural and social scientists, led to a better outcome than we might have seen otherwise. And, sometime before too long, I really will take the family on the houseboat trip I’ve been planning since the beginning.

18 thoughts on “The Murray Darling Basin: the end of an era

  1. I’m not sure that this will restore natural flow patterns so much as perpetuate unnatural flows. I’m referring to the estimated 1,300 GL evaporation from the lower Murray lakes, one issue in which I’m in agreement with Tim Flannery. In the same way Downton Abbey reflects history-as-you’d-like-it-to-be the earthworks that prevent seawater incursion represent a gilded view of nature.

    I think the salt water barrier should be before the lakes near where Capt Sturt tasted salt water 200 years ago. Fly to Pomanda Island SA on Google Earth to see the layout. The main reason for giving the lakes all that fresh water seems to be green idealism. I think the MDBC should cut a deal with SA … lose the lakes and get some more of that upstream water.

  2. It is a better outcome than we could have hoped for realistically. (Grammarians does that construction – ending with “realistically” – save me from the crime of the dangling preposition?)

    The burning of the report was tantrum behaviour by those sectional interests who wanted it all their own way and damn the environment and everyone else.

  3. Ikonoclast, I’m not a Grammarian ( luckily, I went to a State school) but a possible reconstitution would be: “Realistically, it is a better outcome than that for which we could have hoped” (?)
    I was hoping for more but then I’m not realistic. Our only hope now, is that global warming kicks in, flooding Lake Eyre every year and flooding the Darling …frequently. Wasn’t the Snowy scheme supposed to divert waters westward, generating carbon free energy and keeping the Murray healthy? It’s certainly ruined the Snowy River
    Have we finally paid off the scheme yet? (It WAS bloody Labor’s idea, wasn’t it)

  4. The government would buy back enough of the water rights it had given away in the past,

    Without checking, I’d presume there has been little or no tax paid on the value gained from those water rights since they were acquired for free. So much effort goes into dealing with the problems created by letting a lucky few people get hold of natural wealth in the past. (The biggest natural wealth is land, by the way.)

  5. @Ikonoclast

    Grammarians does that construction – ending with “realistically” – save me from the crime of the dangling preposition?)

    Not really — it’s the clause rather than the sentence that is compromised.

    Of course

    a) this is a blog — informal register applies
    b) Not everyone accepts that dangling prepositions are wrong. Some think them a marker of low status. Some are bothered by that. Others think them inelegant. It’s a taste thing.

    Particularly in idiom, following Dryden’s prescriptions seems comical.

  6. @ Ikonoclast
    “It is a better outcome than we could have hoped for realistically.” I think this sentence is sound. I also think it’s correct.

  7. @Ron E Joggles

    The placement of “realistically” is a little inelegant. Ideally, in formal register, it should precede the verb it modifies — here {(have) hoped}.

    Of course, as noted, this blog is a vehicle for informal register.

  8. taxes are paid on irrigation entitlement. Capital gains tax on sale for instance, I suspect very few licences remain in the hands of the original grantees. not to mention profit and consequent income tax, employee taxes, payroll taxes and so on.

    Annual fees that go to govt agencies and the public sector associated with water management generate significant economic activity even in drought.

    Return on water “given away” has been significant.

  9. Irrigation licences invariably attract annual fees, which can be significant.

    How significant? Citations would be useful.

    taxes are paid on irrigation entitlement. Capital gains tax on sale for instance

    So they can pay less tax than tax on income and only if they sell.

    employee taxes, payroll taxes

    I would presume employee taxes are on the value of employee’s work, not on water rights. Sure the water leads to taxable income from its sale value, but that’s not the same thing as tax on the capital gain of water rights.

  10. Not sure how to cite my water bill, but it has a fixed charge of $29000 per year to State water whether I get any water or not. The usage charge varies from zero (as several of the years last decade provided no water) to approx $100000 should I use all my entitlement in a single year. If the water is available to do so.

    I hold only a little above average entitlement in my district, some will have bills 10 times the above.

    Re CGT, what’s your point? My point is a CGT liability exists because govt allocated water and consequently is worth something to the taxpayer whether now or later. Not sure how this guarantees less income tax, unless you aren’t good at what you do.

    Re employee taxes, less water – fewer staff. fairly simple.

  11. @rojo

    In a good production year you use $129,000 of water. I assume your other inputs are also substantial in such a year. The return you expect should be commensurate i.e. provide a healthy profit. Then again, only long term term averaged profits would really count, say average yearly profits over a decade. But again, as you point out, bad decades can happen too (“several of the years last decade provided no water”).

    All this illustrates that irrigation farming from a river basin which suffers decadal, or even greater cycles of flood and drought, is always going to be a dubious business. This is the reality in Australia with virtually no snow-fed rivers, no glacial melt rivers and no large, reliable tropical or monsoon fed rivers. In addition, we don’t have the ground water of many other countries; being the driest populated continent. On top of this and governing actual flows, of the MD Basin and much besides, is the El Nino – La Nina cycle.

    My point is, that with modern knowledge, the modern Australian farmer is in the business with his/her eyes wide open. The farmer could get a ten year bonanza and almost be set for life (on a large property).* The farmer could get a ten year drought and be ruined. Over-allocation of water is another risk. Left in place, it wrecks the basin for farming and everything else. Sooner or later everything has to be sustainable so a government with any eye on the future has to listen to the science and wind back to a sustainable setting. These are all risks of business. Business people take the bonanzas and windfalls happily enough. The flip side is the risk they take.

    * Note: Maybe smart would-be farmers will wait out drought spells, check the wet spell predictions of the El Nino, and buy in cheap at the start of the cycle. Then sell out (to a mug) when the farm looks great and shows great balance sheets near the predicted end of the cycle.

  12. Geoff, unfortunately the drying out of most of subtropical Australia appears a much more likely result of global warming than increased rainfall. But when it does rain we can look forward to more devastating floods.

  13. Thanks for that, Ronald.
    I was expressing a hope rather than an opinion, which would have been that since cyclones seem to feed off warm water, their frequency and violence would increase and they would occur further & further south, thus flushing the Darling out more regularly but I’ll pre-empt a storm of derisory comment by admitting my ignorance now.
    However, I have proof that only eight angels can dance on the head of a pin.

  14. Iconoclast, I like to think (and thus far it has come about) that farming averages out. Where I am in northern NSW we have a volatile water reliability. Normally we are prepared for a couple of years in ten with no water, but the four we had between 2000 – 2010 just about sorted us out. A spectacular year in 2011 and good water assured for 2012 and 2013 put things back on track.

    It is certainly about factoring risk, and we’ll look to build a bit more fat into the business going forward to bridge droughts of longer duration.

    I don’t think I’ll buy and sell the farm on El Nino predictions , but we do use El Nino to decide how much extra “speculation” crop we would plant over and above what we have water on hand for i.e. none for El Nino, to +30% for a likely La Nina period.

  15. @Ronald Brak
    Wry humour never hurt anyone, eh Ronald. even for failed oldancers.

    My original comment was one of disappointment with the final (?) report. Once again (as with the whole global warming debate) the viral infection of economics takes precedent over the survival of the natural system. We’d rather see the Murray system gradually morph into an occasional drain, into which we can all put our straws when it finally rains (tough luck, Adelaide) than disturb our economic growth or suggest to those living off the muddy fringes that, like those north of the Goyder line, a continuous guaranteed living off that land is not possible no matter what water has been “allocated”.

    Isn’t the report a case of counting their chickens – “when it rains, you can have this much and YOU can have what’s left”?

    Do you have a reference to the tropical forests in Qld drying out with global warming just to entrench my pessimism?

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