How much is a job worth in a country town? Why Murray Darling Basin e-water costs more

Have the taxpayers got value for the money spent on making irrigation more efficient as part of the Murray Darling Basin Plan?

The answer depends on adding together two things, how much is the water worth and how much is it worth to have viable country communities, providing long term employment and producing our food and fibre?

The Murray Darling Basin is Australia’s most important agricultural region and it’s the biggest producer of irrigated crops – they’re the sort of thing you might take for granted, your fresh fruit, vegetables, nuts, rice, cotton and even your wine.

The people who live in the Basin and grow those crops, understand the importance of having a healthy river – it’s why most have accepted a plan that has already removed 20% of the water previously available for irrigation. But as the people who live there, they also want healthy communities and to be able to continue to grow your food.

When the Basin Plan was announced in 2007, then Prime Minister Howard, said it was about “increasing agricultural production using less water.”

That’s exactly why the two efficiency programs, highlighted by 4Corners this week, were put in place.

One, called the Private Irrigation Infrastructure Operators Program (PIIOP), helped irrigation districts to become more efficient (by doing things like piping water and reducing evaporation) and the other, called the On-Farm Irrigation Efficiency Program (OFIEP), helped make farming operations more efficient.

The programs started under the Rudd/Gillard Governments and continued during the Abbott Government. The final round went out in 2015. They have been extensively audited, but, as always, irrigators do support full transparency and accountability for Government funds.

NIC CEO, Steve Whan at Burrima Wetland in the Macquarie Marshes a property owned and restored by local irrigators.

According to the Federal Department’s web site a total $1.4 billion has been spent under these programs and that has acquired 345 billion litres of water for the environment.

It’s 345 billion litres of real water, now held by the environmental water holder and able to be used over and over again – one and a half Sydney harbours’ worth every two years.

It’s part of a much bigger parcel of environmental water that since 2009 has seen more than 9,000 billion litres (18 Sydney harbours) of additional flow producing positive results for rivers and native species, in more than 750 environmental watering events.

Interestingly, right now the only reason there is water flowing across the barrages at the bottom of the Murray is because of that environmental water.

Critics of these programs say the Commonwealth has paid too much, they advocate only buying water on the open market. To most of the affected areas, they are essentially saying, communities and food production, are not important.

In my experience, Australian’s care about Australian jobs, that’s why they are willing to support spending $50 billion building new submarines in Adelaide rather than the cheaper overseas construction option.

And that’s why both sides of politics felt it was important to spend extra to deliver a Basin Plan that didn’t sacrifice even more rural communities.

There’s no doubt that (at the time) it would have been cheaper to buy water on the open market.


Unfortunately, that did happen in many communities, with terrible results.

Those are the irrigation towns you drive through and see boarded-up shops; those are the districts where the population has declined, schools struggle to stay open and production falls. You can see it with the evidence of your own eyes; but it has also been well documented in detailed community-by-community socio-economic research.

The communities that saw environmental water returned via efficiency programs have seen the complete opposite.

Griffith is a case in point, it’s a community that despite tough times has done reasonably well. It’s on the Murrumbidgee, where most water savings came from efficiency programs and where economic analysis by Marsden Jacob Associates in 2017estimated that the “investments are likely to increase regional gross domestic product (or local value added) in the order of $470 million in real terms”, with between 75 and 112 extra jobs over the long term.

The value for money proposition must take those jobs and those communities into account.

On a straight analysis of cost per megalitre the on farm and irrigation district efficiency schemes have seen a cost of water of around $4,000 a megalitre. It was a lot then, but right now with General Security water trading at more than $2,000 and high security up to $7,000 even that price is looking a reasonable investment.

But add into it the jobs and communities? It’s hard to put a dollar value on how important it is to keep a regional community alive, it’s hard to put a dollar value on a family having an income, but in my mind, it makes the price very worthwhile.

/Public Release. View in full here.