Sparks fly on energy costs and Basin Plan as Whan stands for irrigators

Sparks fly on energy costs and Basin Plan


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New National Irrigators’ Council CEO Steve Whan is facing a baptism of fire in Canberra amid heated arguments over energy and the Basin Plan.

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National Irrigators’ Council CEO Steve Whan.

National Irrigators’ Council CEO Steve Whan.

TWO major policy issues confronting Australia’s irrigated agriculture sector are currently dominating heated political arguments in federal parliament, proving to be a baptism of fire for new National Irrigators’ Council (NIC) CEO Steve Whan.

While he’s still familiarising himself with the role he started just a few weeks ago, Mr Whan - a former NSW Labor politician who climbed to the ranks of Primary Industries and Rural Affairs Minister from late 2009 to early 2011 - is already being forced to draw-deep on his 12-years of political experience.

Yesterday, his former Labor colleague and one-time federal Water and Environment Minister Tony Burke baited and threatened the current Agriculture and Water Resources Minister Barnaby Joyce over the Murray Darling Basin Plan.

Some have claimed it was nothing but a political diversion from an energy debate, focussed on South Australia, which also sits high on the NIC’s agenda – but Mr Burke did oversee the historic water-management plan being signed into federal law, in late 2012.

At the time it was considered a monumental political outcome given the fierce stand-off between the Coalition and Labor during the Rudd/Gillard/Rudd hung parliament era and a century of state and commonwealth bickering over water reforms.

Back then, Mr Joyce was the Shadow Water Minister and fought typically hard to ensure farming communities weren’t decimated by a Basin Plan that stripped them of pragmatic water supplies, just to serve ideological, city-centric environmental outcomes .

Call it a pay-back of sorts for some for questionable claims made by Mr Joyce about potential damage to irrigation communities from an unbalanced Basin Plan, Mr Burke is now threatening to seek amendments, in the federal parliament, if his opposite number makes changes that threaten the status quo.

“There has been good work done by both sides of parliament, but we cannot have a situation where the Deputy Prime Minister decides that that bipartisan cooperation has to come now to an end and expects the 650-gigalitre benefit for irrigation communities to be delivered and the 450-gigalitre improvement for the environment to be something that is just too difficult to deliver,” Mr Burke said yesterday during a speech on a general house-keeping bill, for agriculture and water.

“Unless we can get a guarantee from the Deputy Prime Minister that he will deliver the plan in full by making sure that the 450 gigalitres is as significant as the 650 gigalitres of down-water, and unless he can step back from his argument that the 450 gigalitres is undeliverable by refusing to quote the entirety of the plan, Labor will have no choice, when this bill reaches the Senate, but to move an amendment to the Water Act which says, 'You cannot get the full 650 gigalitres unless the 450 is delivered as well’.

“We are having that amendment drafted now - I want to be in a situation where we do not have to move it.

“But if the Deputy Prime Minister keeps on his current course, misrepresenting the plan and pretending he can deliver half a plan and say it is the whole plan, Labor will have no choice.”

Mr Burke said his party would not let an outcome that was 100 years in the making, “fall over because of an accident of history of who has the water portfolio right at this point in time”.

“Unless the government can satisfy us that the Murray-Darling Basin Plan is safe and unless they deliver the 450 gigalitres, the 650 will not be deliverable either,” he said.

In response, Mr Joyce accused Mr Burke of wanting to do away with socio-economic considerations in the Basin Plan and threatening the livelihoods of farmers, irrigators and devastating communities across the Basin.

Mr Joyce said the Shadow Water and Environment Minister had proposed his own amendments to the Basin Plan without even consulting state jurisdictions or Basin communities which would ultimately reject them.

He said Mr Burke and Labor were “well aware” a process was already in place for the Murray Darling Basin Ministerial Council to provide a plan to COAG by April 2017 for the implementation of efficiency measures in accordance with legislative requirements and the intergovernmental agreement.

“Mr Burke has proven that he is the biggest threat to the Basin Plan, the very plan he negotiated in 2012,” Mr Joyce said.

“He knows that any change would require drawn out consultation with Basin state governments and stakeholders, including consideration by the Murray-Darling Basin Ministerial Council, which would actually undermine, slow down or bring to a screeching halt the process already in place.”

Mr Joyce said the intergovernmental agreement was signed by the then Prime Minister Julia Gillard in 2013 and agreed to by all Basin state Premiers, including Jay Weatherill in SA.

He said that intergovernmental agreement clearly states that an additional 450 GL in environmental water may be recovered only if there are neutral or beneficial socio-economic impacts.

“This condition protects our vital basin communities who depend on water to make a living and are already struggling due to aggressive water buybacks under the previous Labor government,” he said.

“Perhaps Shadow Minister Tony Burke should have consulted with the members of his party before opting to play politics with this fragile issue that has huge impacts on Basin communities, home to more than two million people.”

Amid the political argy-bargy, Mr Whan said it was his job to be a strong representative of the views of NIC members who are irrigation companies and users of that irrigated water, for producing food and fibre.

He said along with a review of the northern Basin’s water sharing-arrangements, where a catch-cry had emerged saying, ‘enough is enough’ in terms of the water volumes to be taken from rural communities for environmental outcomes, his job also entailed ensuring there was, “as bipartisan as possible approach to the Basin Plan”.

“If it starts to become a political football, and if it starts to become as we’re seeing with electricity at the moment, something where people are trying to score political points, that news is all bad for the future of the Basin Plan but also for the future of irrigation communities,” he said.

“I’d hope that having been a minister in the NSW parliament and having spent a lot of time in politics, it gives me some knowledge and understanding of what motivates people.

“If you understand what motivates people, then you can work with them towards finding a resolution.”

While sparks have been flying over the Basin Plan in Canberra this week, federal parliament has also been running riot over electricity costs and the reliability of power supply.

Senior Nationals MP and Small Business Minister Michael McCormack attacked Opposition leader Bill Shorten and Labor with a colourful display in question time yesterday, saying his government would “take the ideology out of the energy debate”.

“When the farms and family businesses of Grey and the rest of South Australia were plunged into darkness again last Wednesday - for the eighth time, I might add, in recent months - South Australian small business was left counting the cost of picking up the tab: fridges and freezers left to defrost, thousands of dollars of stock now destined for the dump,” he said.

“For a couple of McDonald's outlets employing 150 people, many of them young people, their energy costs have gone up - almost doubled - by $50,000 each.

“Another one employs 90 people, an annual payroll of $1.2 million: their electricity bill increased 59 per cent, year-on-year, January to January.

“Sadly – unfortunately - the Labor energy policy is: 'Would you like a blackout with that?’.”

“The policies of (the ALP), just like their leader, are unrelia-Bill.”

But Mr Whan said issues regarding energy supply and affordability in South Australia also had serious short and long term implications for food and fibre production throughout the nation.

He cited an example of a pump station from the Central Irrigation Trust in SA which had suffered a 107pc increase in energy costs since 2010 - climbing from $880,000 to over $1.8m per year.

“Now if you think about passing those costs onto producers and the costs that the producers themselves are already facing, which are in the same league, that’s a really challenging rise in prices and one that directly affects the costs in putting fresh food on peoples’ tables in Australia,” he said.

“I’d suspect that for probably 99pc of Australian consumers, it has never even crossed their mind that electricity is a big component of their food costs.”

Mr Whan said irrigated agriculture helped feed Australians with product valued at over $15 billion in 2014-15 and was “a core part of putting fresh fruit, vegetables and dairy products on Australian tables”.

But he said, right now, the people growing Australia’s food are getting a “double whammy”.

“High electricity prices are making local production less competitive and unreliable supply is stopping the water flowing at critical points in the production cycle,” he said.

But he said pre-dating his time, the NIC had a strong energy policy which called for a 30pc reduction in prices and a food and fibre tariff, while proposing changes to the market’s administration.

“The feedback I hear from people is that the so called market isn’t an open market,” he said.

“It’s being ‘gamed’ by players in the system and decisions seem to be benefitting the profits of the generators and distributors rather than looking carefully at what the producers and the users need.

“We’ve made a number of suggestions in our policy for reforms to the way that assets are valued.

“We’re agnostic about the source of the power so long as it’s reliable and reasonably priced; that’s the key.

“I’ve actually come across a cotton producers who has replaced an electric pump station on the grid with a diesel electricity generator.

“Now we’ve got to look pretty seriously at ourselves and our energy policies when people decide that essentially using an imported fossil fuel is actually more cost-effective than using either renewables or Australian fossil fuel generated power.

“It’s something that should be causing policy-makers concern.”

Mr Whan said irrigation communities had also done a lot of work on improving water-use efficiencies and that industry modernisation needed to be well-ventilated, to the broader public.

“One of the things we all need to do - and maybe it’s a long term goal – is make Australians understand just how efficient irrigated agriculture is in Australia and what strides have been made to greater efficiency over the last number of years,” he said.

“The images that some people have, especially those in the city, are out of date and probably need a bit of assistance to overcome.”

The National Farmers’ Federation Vice President and Water Taskforce Chair Les Gordon said Mr Burke’s proposed amendments Basin Plan would “completely undermine the fundamental state-commonwealth collaborative mechanism” that underpins it.

Mr Gordon said that as the Minister who negotiated the Basin Plan, Mr Burke knew “only too well” that the additional 450GLs up water in the Plan can only be recovered where it would have neutral or improved socio-economic outcomes.

He said evidence presented to date by the NSW and Victorian state governments is yet to demonstrate that this neutral or improved test can be met and the NFF’s message to Mr Burke was clear.

“Let CoAG and Minco get on with the job of finding a pathway forward to implement the Basin Plan and avoid inflicting further negative impacts on the social and economic fabric of the Basin’s industries and communities,” he said.

“Of all people – Mr Burke should know the importance of working together to deliver the Basin Plan.

“A stunt such as this today would be nothing more than grandstanding and our basin communities deserve better.”

Australian Conservation Foundation healthy ecosystems program manager Jonathan La Nauze said Mr Burke and other ALP members had told parliament they would seek to amend the Water Act, if necessary, to protect 450 gigalitres of environmental water needed to keep the River Murray flowing to the sea.

He said in 2013, SA independent Senator Nick Xenophon and SA Greens Senator Sarah Hanson-Young tried to do that too but unfortunately Labor and the Coalition voted against their amendments, at the time.

“This 450 gigalitres could mean the difference between life and death for the world-renowned Coorong, home of the iconic novel and film Storm Boy,” he saqid.

“It is essential for the viability of many South Australian fishing, farming and tourism businesses.

“Sadly, upstream state governments want to hold this water back and so far Water Minister Barnaby Joyce has been unwilling to stand up to them.

“ACF welcomes federal Labor’s stance and calls on Water Minister Barnaby Joyce to guarantee that the River Murray will get the additional 450 gigalitres of environmental flows.”

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