16 thoughts on “The Murray-Darling Basin scandal: economists have seen it coming for decades

  1. We do not just have john’s article on the Murray Darling fiasco but also another one by two people who were involved in the reviewing the whole thing.

    As the late Mr Spock would say fascinating.

  2. so who paid whom, when, where, how and how much?

    if i am completely out of line does that means incompetence?

    and if it is incompetence was it spontaneous or planned?

    or some other “thing”.

  3. MDBP Fed Govt infrasture for water plan exchange rate:
    $1 cost common wealth $2.70. And in private hands.

    Deaf. As. A. Post. Said UNESCO.
    “David Littleproud, defended the water infrastructure scheme, saying water efficiency projects “return water to the river system whilst protecting rural jobs and communities rather than decimating them as water buybacks do”.

    Makes pink batts seem like a gold standard.

  4. I thought the Four Corners presentation was so concerned to slam the scheme that they left out adequate explanations. I cannot see anything wrong at all, in principle, with water trading including trading by non-farmers. Strongly agree with John that measures to reduce waste on-farm reduce the recharge of streams and aquifers. Building new dams on an already stressed system seems difficult to rationalise.

  5. These agri-business companies are so big and powerful (too big to fail) Govts, federal and state, are frightened of stepping on their toes. Combined with budget cutbacks to govt bodies the regulation of these companies is difficult, at best.

  6. this seems to be very similar to the tariff problem.of yesteryear. Those involved will argue furiously against recgnising reality but eventually reality sets in. come to think of it it sounds a lot like putting a price on carbon.
    Eventually more and more people will come on board when reality hits them . some farmers are on board now however you still have some s= til saying the only problem is droughtproofing the region. This always means more dams.
    As Harry notes this makes no sense. indeed ti could well acerbate the problems.

  7. Does on site water storage reduce stream-flow when that storage is fed from legally-binding entitlements? My assumption is that, apart from evaporation losses, it will not. So building extra dams to store water is not much of an issue in the sense that it will not lead, in itself, to less water beng left for the environment. .

  8. Harry,
    I guess (on 1st glance) the initial question is where does the seepage go? We know the evaporated water is lost, but does the seepage get fed back into the system for downstream utilization by farmers or inhabitants of the river system or does it seep into some kind of underground river or aquifer that might get fed out into another less utilised outlet? No doubt this has been studied, analysed and reported somewhere…

  9. Harry, it is easy to become confused about the hydrology of water saving (and I am). Surely, it is more important to concentrate on public finance aspects of the problem. Where is the justification for spending any money on the private infrastructure needs of irrigators, on-farm or off-farm, let alone huge sums? And even if you could find a justification, are there defensible criteria for allocating taxpayers’ money between farms, between industries and between districts? I suggest there aren’t, which is why I agree with the Four Corners description of lawyer Richard Beasley (who worked for the South Australian Royal Commission) that to all intents and purposes the Murray-Darling Basin Plan is a ‘rort’. I also agree with Quentin Grafton that the Plan is a scandal and disgrace to public administration. The villains of the piece include the organised conservation movement who went along with infrastructure spending seeking to placate irrigators and the flawed idea (stunt?) of a comprehensive plan rather than a patient, gradual project-by-project approach to environmental remediation, based on buyback. The Four Corners programme also suffered by playing to the crowd with superficial treatment of water trading, and scaremongering about corporations and foreign ownership, when the real issues are home grown. It is also a mistake to attribute responsibility to the National Party and Coalition when Labor Party grandees like Wong and Burke (federally) and Brumby and Thwaites (Victoria) were up to their necks in this tawdry money-wasting exercise.

  10. Harry your assumption of what occurs to legally binding entitlements is probably not correct in the rea= ding i have done.

    In a very simply way if you build a dam you must divert water surely.

    The key to the solution is get the right price and let the market sort it out. I doubt if we would have rice and cotton for example.
    like reducing tariffs you would gently get to the right price but ensure all participants where it is ending up.

  11. Afterthought. It was interesting to hear a couple of irrigators say on the Four Corners programme that they had been paid (big time) by the Commonwealth to do things they would have done anyway on their farms, once funds were available.This is consistent with a body of research on farmers’ uptake of innovations; notably for Australian irrigation by Neil Barr and John Cary in the case of laser levelling. An important finding was that labour saving was more important than water saving per se in choice of irrigation technique. Irrespective of difficult questions about the hydrology of water saving on individual irrigation farms and in the aggregate – put another way, an example of the fallacy of composition – current arrangements under the MDB Plan are effectively dispensing a form of economic rent, at great cost and, inevitably, inequitably.

  12. Alastair, Self-evidently the efficiency-improvement program was a bribe to get the assent of farmers who see buybacks as destroying rural communities. Of course I don’t agree with bribery but that’s what it was.

  13. I’ve found my voice again. I feel sorry for all of you. 😉

    The progress of the M-D Basin scandal/fiasco must give some pause for thought to people like me, that is to say people who advocate dirigist action. The M-D plan was an attempt at a scientifically specified policy, implemented in a dirigist fashion. It foundered, was thoroughly corrupted and turned into an enormous bribery and rent seeking exercise as Alastair W. and Harry C. outline above. Not only has it failed to deliver its objectives, it has made the situation objectively worse, ecologically and economically. Thirteen billion dollars (or whatever it is) to make things worse in all respects, is a very steep price.

    There seems to be a particular problem in running a late stage, hybrid dirigist-neoliberal system. A little dirgism in a neoliberal system is a dangerous thing. This, I think, is the crux of our problem. The state has been reduced (partially) towards the minarchist rump desired by neoliberal corporatism. The state can raise money only in certain permissible ways. The state should tax the middle class but not the rich and not corporations in any significant way. The state should not “print” money, though it still does to some extent. The state should only borrow money in the main from corporations, to give corporations places to park otherwise un-investable money; money un-investable due to over-accumulation.

    Also, the state’s legitimacy and practical capacity to administer, regulate and conduct compliance has been reduced by the ongoing neoliberal minimisation of the state. This was always the intended goal. Weaken the democratic state so that it cannot control the conduct of dominant capital and corporations. We see the results with the M-D scheme. The state now apparently cannot run big schemes except in a form where they can be corrupted, gamed and rorted. The money and rents from this corruption flow to the opportunistic and the already well-off.

    This suggests that before attempting large nation-saving and environment-saving dirigist projects we need first to re-strengthen and re-expand the democratic state itself plus all its administrative, regulatory and financial compliance apparatus. Just as one needs to strengthen and expand muscles to do heavy lifting, the democratic state needs to be strengthened and expanded to do the dirigist heavy lifting necessary to counter dominant capital and corporations. This does not mean strengthening those parts of the minarchist state so beloved by capital and corporations and already too strong; meaning police, criminal courts, prisons and military. It means expanding health, welfare, education, social programs and state administrative arms for the control of capital, business and corporations. That’s the first step. Then the strengthened state can run dirigist projects with less co-opting of said programs by capital and corporations for their own purposes.

  14. dear Icono,

    i’m an idiot in economic studies, i know this.


    i’m going to have to go home and look it up.

    this is not a criticism of your comment but a plea to make such analysis intelligible to fools such as i.

    maybe the last election result was skewed by good policy not quite hitting the sweet spot of personal engagement.(the advertising industry and religions are dab hands at this)

    one example is the “poor us parade” connected to tax and investment housing by a group who i would lay odds were all recipients of really good dividends from financial entities busted for (but not charged) driving people into destitution.

  15. May,

    “Dirigisme or dirigism is an economic system where the state exerts a strong directive influence over investment. It designates a capitalist economy in which the state plays a strong directive role, as opposed to a merely regulatory one.” – Wikipedia.

    But we need to go further. We need policies implemented from a socialist and democratic viewpoint. Currently, we only get economic policies from a plutocratic and oligarchic viewpoint.

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