4 March 2008

BASIN CUT A BLUNT INSTRUMENT

One of Australia's largest irrigation companies has labelled a new plan for compulsory acquisition of irrigator entitlements as unnecessary and contrary to government policy in seeking to achieve a sustainable balance between consumptive users and the environment.

Murrumbidgee Irrigation (MI) is a private company supplying water to over 3,000 customers in the Murrumbidgee Irrigation Area (MIA) of NSW. MI Chairman Dick Thompson has warned against a compulsory cut and suggested that the new plan's author, Professor Mike Young has got it wrong.

“It was always envisaged that the cornerstones of Government action in returning water to the environment was through purchase from willing sellers and water savings projects. In terms of purchase from willing sellers, this makes sense as it allows those who wish to exit the industry or scale down their operation to do so”, said Mr Thompson

Mike Young's plan would have those wishing to stay in the industry have their entitlements slashed in exchange for cash that they would then have to use to purchase back from those wishing to leave the industry.

This would be a ludicrous outcome and completely at odds with the notion of a market solution. Thankfully in her recent visit to the MIA, Minister for Water and Climate Change Penny Wong poured cold water on compulsory acquisition stating that it was not on the Government's agenda.

Mr Thompson said that the plan gives no credence to the use of water savings and alternatives to the purchase of permanent entitlement as part of the broader solution.

“While I'm not suggesting that there are enough savings to meet the Government's target, they should be pursued to the maximum extent. If we are serious about finding water for the environment at least cost to the community, then we must reject across-the-board cuts and develop a package of market, infrastructure and management solutions,” he said.

Some innovative approaches already taken by MI includes their RiverReach project currently in pilot-stage which would see water entitlements remain with water users but share allocation against those entitlements with the environment, based on agreed trigger points and prices. Also the $29 million investment in improving the efficiency of MI's natural drainage site Barren Box Storage and Wetland has resulted in around 20,000 ML of water savings each year returned to the environment, in particular the Snowy River.

Ends

For further information regarding this media release, please contact Dick Thompson, Chairman Murrumbidgee Irrigation on 02 6962 0200.