Australia’s water problem seems to be quite beyond the nation’s politicians.
They’re usually fine with schemes that involve picking a winner from competing interest groups and distributing abundant cash, but when it comes to dealing with a chronic scarcity and saying NO, paralysis sets in.
It seems to me there are two issues that flow from the end of Australia’s 50-year wet: the impending collapse of the Murray-Darling basin due to over-allocation for irrigation, and urban water rationing due to the fact that it is woefully under-priced.
Yesterday I moderated a panel discussion on water at the Australian Institute of Company Directors that included Professor Mike Young from Adelaide University’s school of earth and environmental sciences, Alan Cornell, the chairman of Yarra Valley Water, and David Karpin, chairman of Warrnambool Cheese & Butter and deputy chairman of Racing Victoria.
The consensus was that the price of water in the cities needs to at least double, probably triple.
Currently, according to Alan Cornell, businesses pay $1.10 per kilolitre and individuals pay $1.76. He says the price should be at least $3, which he gets by adding a profit margin to the $2.50 per kL cost (capital plus running costs) of desalinated water from the proposed plant at Warragul.
But he would say that, I suppose, since Yarra Valley Water might be the beneficiary of a big increase in the water price, unless it was all done through taxes. But price is always a better way to deal with shortage than rationing.
Bringing the flexibility of a decent price mechanism to water would allow a higher price to be placed on water guarantees for those who really need it.
And why does industry pay so much less for water than I do? The result of that, surely, is that businesses have little or no incentive to conserve it, while billions of dollars are wiped off the value of residential real estate by the dying of gardens.
As for the distress of the Murray-Darling, Mike Young showed a graph (see p6 of his presentation, available on his web site) that clearly shows why there is a problem. It is the annual inflows into the Murray River system back to 1892.
The period between 1896 and 1950 was basically a long dry period, with four extended droughts, including a 12-year horror from 1938 to 1950. Most of the years during the first half of the century saw inflows below the long-term median of 9,000 gigalitres a year.
From 1950 to 2002 was a long wet period. According to Mike Young’s graph, there were only four drought years – the rest of the time the inflow was above the median.
The past six years have been drought years, the longest since 1938-1950. Young rhetorically asked whether we were prepared for this one to extend to 2014 – that is, what if we are only halfway through the current drought?
That question is answered by yesterday’s leaked report from scientists commissioned by the South Australian Murray-Darling Basin Natural Resource Management Board, which was delivered to ministers a month ago.
It said, in effect, that the Murray-Darling has only six months to live.
Maybe they’re exaggerating for effect – who knows? But the statement that the Murray River is on the brink of ecological collapse should surely have set alarm bells publicly ringing immediately. Instead, we only hear about it through a leak a month later – one-sixth of the way, apparently, through the remaining life of Australia’s largest river system. What a disgrace.
All the Federal Minister, Penny Wong, could say yesterday when confronted on the subject was that it’s a complicated issue. Yes, but it’s not new.
It’s true that we had 50 years of wet and now six years of dry, which is a short enough time for everyone to persuade themselves that it will start raining again soon and everything will be okay. But clearly there is a problem now.
Listening to David Karpin, who was talking as a representative of water users (dairy farming and racing) I was struck by what seemed an obvious fact: Australia’s dairy industry is simply too big. So is the rice growing industry for that matter.
But Australia’s milk production is enormous and 75 per cent of it is exported, so the industry is not there to feed us. It is basically converting water into milk for export to other countries. The water has dried up but we’re still exporting millions of litres of it.
I’m not suggesting that buying dairy farmers off the land is the only solution to the collapse of the Murray-Darling, but it is definitely part of it.
Mike Young is a water evangelist. Last night he was in Kyabram talking to a hostile audience of dairy farmers, which he was supremely confident of winning over with his simple message.
It is that a 10 per cent decline in rainfall leads to a 30 per cent decline in mean storage inflow, and that if evaporation and the flow to the sea remains steady at 2,000 GL each, then water for the environment and consumption falls by 67 per cent. That’s just from a 10 per cent drop in rainfall.
If rainfall declines 20 per cent, there is nothing left for consumption (ie. irrigation) and the environment.
The environment is the vested interest that always loses, according to Mike Young. He says the basis of any sustainable scheme to save the Murray must be to give it a share of the pie that has the same status as other users.
But everyone already knows that. It just requires money and political courage.
There’s plenty of money about these days, but an even greater abundance of things to spend it on.
And as for political courage? Sorry – that’s in a drought.
Even more water power to your elbow AK. And to Asa Wahlquist and others who try to spread the word in ways we can understand, starkly and finally. As a city dweller who used to share baths as a kid and pour the leftover water on to the garden wonder how we lost the water conservation lessons from primary school. Charge us city dwellers, business, it may be the only way. We have to stop exporting what wetness we have left. A BBC report this morning also underlines our contribution to the world food shortage via our drought. It may be that we have to kick the ball to others while we save our fragile continent – and learn to work it according to its requirements not Europe’s. Senator Wong we look to you and your PM to take some tough decisions, this is 1000 times harder than your work in Bali, but who wants to be known as the government who talked big on climate change and fiddled whilst the Murray Darling died?
Kohler: But he would say that, I suppose, since Yarra Valley Water might be the beneficiary of a big increase in the water price, unless it was all done through taxes. But price is always a better way to deal with shortage than rationing. …Why is this Allan? Everybody rich or poor needs a certain amount of water to drink, cook and maintain their hiegine. You will never make water expensive enough to deter the rich for whom the cost of water is pin money and rich companies who can pass on their costs from using water excessively. The only people who will reduce their usage are the poor and the 20% of us with excessive mortgages. Some of these people will very innovatively bypass their water meters. A minimum amount of water should be guaranteed to every household on the basis of the number of people living. It should be at zero cost. Anything above that should be billed at a cost that acts as a driver to innovation and reduced consumption. Of course any green house gas producing water production methods would be even more expensive. By the way the desal plant is not being built in Warragul. It hink it might be Wonthaggi. Warragul is a bloody long way from the sea!
When I was in Germany 10 years ago doing some investigations industry paid $A24 to use 1000 litres. $A6 to buy, $A18 to discharge. Because they speak German, although most speak speak English, but we don’t speak German, we just don’t know..
The Victorian Desal Plant will be located on the Bass Coast west of Wonthaggi, not 50km inland at Warragul.
Well said AK, Bill, and Jan. Can we stop providing media cover (eg, Belinda N) for Wong and Rudd and the Govt that enables them not to act decisively on this? Yes, yes, everyone’s to blame for not acting when that was needed. Now for action – if there is one thing Australians will rally behind right now, it is a govt that will do the really tough stuff on water, including bludgeoning the self-satisfioed states into line. This can make your real reputation as statesmen (or -persons, if we haven’t left the 1980s). Please don’t stuff about with smoke and mirrors, as in car manufacturing, and budget savings.