Canavan rejects claims of excessive Basin water purchase

Canavan rejects claims of excessive Basin water purchase


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Matt Canavan has rebuffed reporting suggesting ‘tens of millions of dollars’ was overpaid to a large private cotton company for Murray Darling Basin water.

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Queensland Nationals Senator Matt Canavan.

Queensland Nationals Senator Matt Canavan.

QUEENSLAND Nationals Senator Matt Canavan has rebuffed and described as “absolutely incorrect” reporting suggesting ‘tens of millions of dollars’ was overpaid to a large private cotton company for water purchases in the Murray Darling Basin.

The serious claims were raised in a report by the Canberra based think-tank the Australia Institute levelled at former Agriculture and Water Resources Minister Barnaby Joyce.

But that document also refers to and details a comedy skit in the Monty Python movie the ‘Life of Brian’ involving a character named ‘Harry the Haggler’.

It claimed that in July 2017, the minister’s Department paid St George based cotton and farming company Eastern Australia Agriculture (EAA) $80 million for nearly 29 gigalitres of water, saying it was “well above the value recognised by the vendor” which also recorded a $52m profit, on the transaction.

“EAA’s entire properties, including the water licences were valued at $107m in total, just $27m more than DAWR paid, despite that EAA retained more water than they sold - 31.6 gigalitres,” it said.

“On this basis alone, it appears that DAWR have paid tens of millions of dollars too much.

“EAAs original asking price was $2,200 per megalitre.

“(The Department) displayed Pythonesque haggling skills and paid a final price of $2,745 per megalitre.

“DAWR paid 25pc more per megalitre than originally requested by EAA, 139pc higher than the Commonwealth had previously paid for the same type of licence and 85pc higher than the average price for a more reliable type of water licence.”

The Australia Institute said its report was based on documents made available under an Order for Production of documents requested by Nick Xenophon Team SA Senator Rex Patrick.

“The Australia Institute recommends an independent audit of the Commonwealth Environmental Water Holder’s portfolio and a review of the governance arrangements for the management of the Murray-Darling Basin - a serious change of culture in Australia’s water management agencies is overdue,” it said.

But in a fiery question time in the Senate, Greens Senator Sarah Hanson-Young clashed with Senator Canavan over the reported figures.

“Why is it, minister, that every time the Nationals get their hands on the water portfolio rich cotton producers get richer and every other taxpayer gets ripped off and the river suffers?” she asked.

But Senator Canavan – speaking for the current Minister David Littleproud – hit back at the question and allegations from the Green’s water spokesperson saying “unfortunately it contains a number of incorrect claims”.

“The water purchase from Eastern Australia Agriculture was for an amount of water that was greater than five times the figures that were quoted in the media that you referred to in your question, Senator Hanson-Young - so it's incorrect,” he said.

“It is absolutely incorrect to say that the government paid a price that was above the seller's price.”

Senator Canavan said documents on the matter had been released and if Senator Hanson-Young had “taken the time to pay attention to them” they showed that the original sale offer was “very different from the final purchase”.

He said the documents showed that the amount of water purchased was “a lot more than was originally offered and, when you end up getting a lot more than was offered, of course the price has to be higher as well”.

“I can assure (the Senate) that the government's purchases of water here have been advised through independent analysis and valuation,” he said.

“We are confident that we have purchased water at good value for money for the taxpayer.

“We're also confident that these water purchases will help deliver the environmental objectives and outcomes of the Murray-Darling Basin Plan.

“The government is committed to making sure that we do deliver.

“We are trying our best to get this delivery done, in the clear politicisation and opposition to independent advice that we've seen from Senator Hanson-Young's side and the Labor side, who have ignored the results of the Northern Basin Review and potentially put at risk the delivery of the overall plan, which is to the benefit of the whole Murray-Darling.”

Senator Hanson-Young also accused the Nationals of a pattern of behaviour where they “pay their mates for water buybacks, the taxpayer ends up paying more than the water is worth”.

“Can the minister describe: is this a rort, is it a kickback or is it just good old-fashioned pork-barrelling for the National Party at the cost of the taxpayer just to look after your mates?” she said.

But Senator Canavan returned fire saying there was a pattern of behaviour from the Australian Greens “that they don't do their homework”.

“They rely on media articles from The Guardian or Fairfax without themselves looking at the documents I quoted in my first answer, which are publicly available,” he said.

“So Senator Hanson-Young can reduce herself to invective and confected claims, but I would encourage her to actually look at the documents the government have transparently released in this case, which clearly show that the allegations in the articles Senator Hanson-Young referred to were wrong, incorrect, and the government is confident that we are getting value for money for the purchase of water in the Murray-Darling Basin Plan.”

Senator Canavan said it was also a “shame” that the Northern Basin Review amendments were not passed, because they were based on independent advice from the Murray-Darling Basin Authority.

He said the former Labor government listened to the MDBA when putting in the Basin Plan, and they also committed to conducting an independent Northern Basin Review, “whose recommendations they have now rejected”.

“That has put at risk 200 jobs,” he said.

“According to the MDBA, 200 jobs are at risk, because the Labor Party politically joined with the Greens rather than listen to the independent advice of the experts in this area.”

The Australia Institute report said the water purchased was for Over Land Flow (OLF) licences, which cannot be traded between irrigators, because they are attached to land.

It said “They have no legal status or any recognition at a location other than where they were originally purchased.

That is, there appears to be no legal basis for the Commonwealth to ensure it gets to the places it is intended to be used”.

“More importantly, OLF licences should not be treated as equivalent to river flows when meeting the water recovery target,” it said.

“Because one gigalitre of water on the floodplain is not equivalent to one gigalitre of water in a river, it is a flaw to count the two as equivalent.

“That is, it is at best an error to count OLF volumes towards a water recovery target that was determined based on river flows.

“The purchase appears to be in breach of the Commonwealth Procurement Rules because it was not made available to all licence holders in the valley.”

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The story Canavan rejects claims of excessive Basin water purchase first appeared on Farm Online.

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