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Strategic failure (submission) 399.21 KB
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The Australia Institute welcomes the opportunity to make a submission on the procurement of strategic water entitlements. This submission relates to four “strategic” purchases of water by the Department of Agriculture and Water Resources in 2017, in the Murrumbidgee, Warrego, Condamine-Balonne and Lower Darling/Barka.

This submission addresses the Australian National Audit Office’s audit objectives and includes considerable detail on the Murrumbidgee purchase. The other purchases are discussed here, but are covered in more detail in previous Australia Institute research. Links are provided through this submission.

All the strategic purchases share some common flaws:

  • Questionable and overstated reliability of water.
  • Will either not return the stated volume to the environment or will increase productive use.
  • Lack of transparency and accountability, including information withheld from the Senate.
  • Procurement without open tender.
  • High prices paid.

None of these purchases are consistent with stated government policy:

  • They will not reduce consumptive take.
  • They do not contribute to a balanced portfolio of water holdings.
  • Processes were counter to accountability and transparency guidelines.
  • Purchases were counter to ethical procurement guidelines.

The Murrumbidgee purchase was of water that was already “underutilised” and the vendor’s stated intention was to use the money from the sale “to fund increased irrigation on another property”. The purchase of Lowbidgee Supplementary water exacerbates an unbalanced Commonwealth portfolio in the Murrumbidgee, which is already 43% based on this type of entitlement.

New dams funded under the efficiency program will reduce the reliability of Lowbidgee Supplementary water. That is, the government has bought an asset, then subsidised private infrastructure that erodes that asset, then purchased more of the original asset despite it being devalued. Worse still, the prices paid were roughly double those of earlier purchases. Other potential vendors appear to have been ignored, breaching ethical procurement guidelines.

The so-called strategic purchases of water in 2017 represent some of the lowest points of water management in the Murray Darling Basin. Huge benefits have flowed to powerful, well-connected parties, while taxpayers, communities and the health of our rivers have been sacrificed. We urge the ANAO to dedicate considerable resources and time to this important investigation and we would be happy to provide further assistance.

 

Publication Details
Publication Year:
2019