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Taxpayers fork out for most expensive water ever

The Federal Government today committed Australian taxpayers to effectively pay a record $20,000 per megalitre to recover water in the Murrumbidgee Irrigation Area. [1] 

Federal Environment Minister Keith Pitt has announced the government will allocate $126 million for water efficiency infrastructure to recover possibly just 7.4 gigalitres of water, with only 6.3 gigalitres to be returned to the environment 

“That means every megalitre of water saved will cost taxpayers $20,076,” Nature Conservation Council Acting Chief Executive Jacqui Mumford said. 

“That’s almost eight times the most recent price paid for the permanent trade of general security access to water on the open market in the Murrumbidgee. [2] By some estimates, this is the most expensive water yet in Murray-Darling River system. 

“It’s a scandalous waste of taxpayers’ money. There are far cheaper and more effective ways to meet the targets of the Murray-Darling Basin Plan.   

“If all water cost this much, the $13 billion Murray-Darling Basin fund would only buy 647.5 GL, about 20 per cent the 3,200 gigalitres required to be recovered under the Basin Plan. 

“And where is the government’s cost-benefit analysis to show value for money? Or how about its water recovery calculations? 

“Water buy-backs are a far cheaper way to achieve the same result, and the result is more certain than forecast gains from water efficiency measures, which are highly uncertain.” [3] 

Ms Mumford asked why the Morrison Government was giving irrigators 1,100 megalitres under this arrangement, rather than returning that water to the environment to restore natural river flows. 

“With climate change making less water available, such large sums should be used to diversify regional economies rather than subsidise already planned works of private irrigation schemes,” Ms Mumford said 

“Reports show that each dollar spent on human services like hospitals and schools creates four times as many jobs as spending on infrastructure upgrades.”  [4] 

REFERENCES 

[1] Murrumbidgee Irrigation says $126 million grant will allow it halve its water losses, ABC, 18-1-21.  

[2] See Key Water, Last Trades.  

[3] On the permanent trade market, it would cost $2,450/ML to by water access on the Murrumbidgee. See Key Water, Last Trades. 

[4] Modelling variants of the Murray-Darling Basin Plan in the context of adverse conditions in the Basin, Glyn Wittwer Centre of Policy Studies, Victoria University, March 2020. 

 

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