Hells Gate Dam not farm subsidy or trade agreement breach: federal government

Jamieson Murphy
By Jamieson Murphy
May 11 2022 - 11:00pm
Gifting $5.4b dam not a farm subsidy or breach of trade deals: govt

THE federal government has dismissed suggestions gifting a $5.4-billion dam to the Queensland government could be in breach of Australia's international trade agreements, which restrict government subsidies to farmers.

The Hells Gate Dam, located 120 kilometres north-west of Townsville, is the single largest infrastructure project announced in the recent budget and will allow 49,000 hectares of arable land to be irrigated.



Because the dam will support a massive spike in exported produce and is entirely funded by the Commonwealth, questions have been asked if Australia would be left open to international trade disputes. Several of Australia's free-trade agreements have limitations on federal government support for farmers.

When asked, Deputy Prime Minister and Infrastructure Minister Barnaby Joyce said he hadn't checked to see if gifting the dam to the state government was compliant with Australia's international trade agreements, but didn't consider it to be an issue.

"By that same reasoning, you could say a road is a subsidy for farmers because they don't pay for it but we gift it back to the states," Mr Joyce said.


Trade Minister Dan Tehan was also asked what advice the government had sought or received on the issue.

"We are confident our plan for Hells Gate Dam is consistent with our World Trade Organisation and FTA obligations," Mr Tehan said.

National Farmers' Federation general manager of trade Ash Salardini said gifting the dam shouldn't be an issue, but "that's not to say another country won't try it on"

"In the past countries have tried to ping each other regardless of what the WTO deems a subsidy or not, so that's something to be aware of," Mr Salardini said.

While the world of international trade disputes was "not black and white", the Hells Gate Dam question was "less grey" than the MDBP water efficient grants.

"The MDPB is a good analogy to draw, the water efficient stuff was more directly linked to farmers and took place on-farm, so it could logically be characterised as a subsidy depending on your definition," Mr Salardini said.

Queensland Nationals Senator Matt Canavan said any countries who wanted to challenge the dam as a farmer subsidy didn't have a leg to stand on.

"Bring it on, they've got no argument," he said.

"China subsidise their steel industry, food industry, aluminium industry. The [United States] farmers of the Colorado River have been subsidized for decades."

Mr Joyce also dismissed suggestions the dam could create the most expensive water in the country, if the cost-recovery principles of the principles of the National Water Initiative were followed.

"We're not asking for a return from the people who use the water," Mr Joyce said.

"That's a question for [the Queensland state government]."


Jamieson Murphy

Jamieson Murphy

National Rural Affairs reporter

National Rural Affairs reporter, focusing on rural politics and issues. Whisper g'day mate to me at jamieson.murphy@austcommunitymedia.com.au

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