Water wars in the Murray-Darling Basin

A disregard for academic research and a lack of accountability in institutions continue to wreck Australia’s environment, Quentin Grafton and John Williams write.

Two Royal Commissions reported adverse findings over the past couple of weeks. The report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry triggered the resignation of both the CEO and Chair of the National Australia Bank (NAB), a public recognition of wrongdoing, and a bi-partisan agreement to respond to the Royal Commission’s recommendations.

The Murray-Darling Basin Royal Commission found that “the Murray-Darling Basin Authority (MDBA) has shown itself to be unwilling or incapable of acting lawfully. That state of affairs exists today, and is the principal reason why there are serious doubts whether the current senior management, and Board, of the MDBA are capable of fulfilling their statutory obligations and functions.”

The Australian Government’s own Productivity Commission Five-Year Assessment on the Basin Plan also found “significant risks to implementation cannot be managed effectively under current institutional and governance arrangements” and that “failing to act will be costly for the environment and taxpayers”.

And the response of the MDBA to these findings? An opinion piece by its CEO proclaiming “the Basin Plan is a world-class policy” and that it is “a world-leading opportunity to protect our iconic rivers”.

In a communique on 6 February, the MDBA Board noted that its retiring Chair “has shown great leadership, perseverance, and energy over four challenging and rewarding years at the helm of the Authority” and thanked him for his “deep commitment to the water reform challenge”.

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Further, the Board “rejected the Commission’s findings that the MDBA had been negligent or had acted improperly or unlawfully. The Authority reiterated its full confidence in Chief Executive … and offered its full public support for his leadership of the MDBA and stewardship of the Basin Plan.”

Accountability is fundamental to any democracy. Indeed, this is recognised in the private sector such that the CEO of NAB, when announcing his resignation, said, “As CEO, I understand accountability.”

Where there is evidence of failure, those responsible need to be held to account while change is required to ensure the mistakes do not continue. Ignoring the mistakes and hubris is simply not good enough – be it in the banking sector or in the public sector and in water management.

The war of words about water reform in the Basin is not simply one person’s opinion versus another opinion. When there is published evidence in peer-reviewed scientific journals of deterioration of key aspects of the ecology in the Basin, ongoing failures of water reform, and misguided policies that may be reducing, not increasing, stream flows, politicians and senior public servants need to pay attention.

They cannot, and should not, be able to make unsubstantiated public statements contrary to the available evidence and continue with policies that have been found to be failing.

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Our own experience illustrates the problems researchers face in moving from evidence of water reform failures to improvements in policy implementation. We made a submission to the Parliamentary Inquiry on 21 March 2017 showing the deleterious effects of government-funded irrigation infrastructure subsidies on stream flows in the Basin. Our conclusion was that subsidies to increase irrigation efficiency materially reduce ‘return flows’ – water that was previously able to flow back to streams and groundwater – from farmers’ fields.

We met with the MDBA, including its CEO, in October 2017 to explain our preliminary findings and then again with MDBA officials in early 2018. We were told by the MDBA that return flows were “virtually nil” and an investigation of what might be the effect on return flows from water infrastructure subsidies was “not a priority”.

Fast forward to April 2018, and ABC’s radio program Background Briefing gave national attention to what is happening in the Basin, including our own work on return flows and stream flows.

Only after the radio program did the MDBA act, commissioning a group of researchers at the University of Melbourne to investigate the return flows issue. These researchers concluded in October 2018 that the decrease in return flows as a result of water infrastructure subsidies to increase irrigation efficiency was 121 GL/year – many multiples more than the estimated water thefts identified by the ABC 4 Corners program in July 2017, and most certainly not virtually nil.

Our own estimates being published in the Australasian Journal of Water Resources following a robust peer review process, and using our mid-point estimates, reveal two key findings.

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Firstly, water recovered from subsidies for irrigation efficiency costs as much as $50,000 per million litres after accounting for reductions in return flows. This figure is 25 times more than the alternative of acquiring water from direct purchase of water entitlements from willing sellers.

Secondly, the reduction in stream flows from lower return flows amounts to some 630 billion litres of water, on an annual basis, or a volume of water greater than what is in Sydney Harbour.

Our findings have two important policy implications. First, there is a critical need to measure the effects of return flows as a result of water infrastructure subsidies, and more generally, a requirement for comprehensive water accounting in the Basin that was agreed to by the Council of Australian Governments in 2004, but has still not been implemented.

Second, further expenditures on water infrastructure projects must be stopped until it can be independently and scientifically determined by how much – if at all – such infrastructure increases stream flows, as well as clarifying the reason public funds were allocated for water infrastructure. Already, $4 billion has been spent and another $4.5 billion has been allocated.

As with the findings of the Royal Commission and the Productivity Commission, our own results about unaccounted and large reductions in stream flows have fallen on deaf ears.

Until, and unless, peer-reviewed evidence in scientific journals is taken seriously, and those responsible for implementing the Basin Plan and water recovery for the environment are held accountable, expect more fish kills, a continuing environmental crisis, and no peace in the Murray-Darling Basin.