Response to Four Corners Cash Splash

8 July 2019

This Four Corners program does not present a balanced picture of the progress that has been made in delivering the Murray Darling Basin Plan.

The Murray-Darling Basin Plan is a once-in-a-generation opportunity to restore the environmental health of our river systems – in the interests of sustaining the Basin’s communities, industries and natural environment, as well as for the broader benefit of the Australian people.

Six years into the 12-year Basin Plan we have already recovered around 2,100 gigalitres of water. That is now held for the environment and will be available each year on average. More than 700 gigalitres of this water has been obtained from irrigation efficiency projects.

The overall volume of water available for irrigation use has decreased as a consequence of water recovery for the environment.

Water recovered by the Department and held by the Commonwealth Environmental Water Holder represents real water for the environment. Arguments about return flows diminishing savings have been thoroughly examined by the University of Melbourne and found to be vastly overstated.

These projects not only provide water for the environment but also ensure the ongoing production of food and fibre in a more water-efficient manner. The projects keep farmers in production and keep jobs in local communities, while achieving a better balance between water for production and water for the environment.

In its story, Four Corners raises the On Farm Irrigation Efficiency Program run by the department. This Program delivered more than 1500 projects – covering a diverse range of small and large farms producing many different food and fibre products. Less than 5 per cent of projects were valued at over $1 million – demonstrating that most projects were small to medium in size. Farmers were funded to deliver projects in return for water savings for the environment.

Four Corners also mentions the Private Irrigation Infrastructure Operators Program. This program has provided 626 kilometres of new or refurbished water delivery channels, 1005 kilometres of stock and domestic pipeline, 8518 improved outlets (including improved offtakes, metering and automation), as well as delivering 142 GL of water savings which will be available on average every year.

The department stands by its management of these programs. They are run according to sound processes and guidelines. Projects are selected, developed, and assessed through competitive, fair and robust systems that ensure projects are delivering water savings and represent value for money.

The department relies on independent technical advice in determining whether a proposed project will deliver water savings and then throughout every project’s lifecycle. Agreed milestones must be met before payments are made. The department ensures that each project is subject to independent audits and also undertakes its own random audit of a sample of projects.

Our programs are also subject to a high level of scrutiny through internal and external audits (including the ANAO), parliamentary and other inquiries and reviews. For example, the ANAO undertook an audit into the Private Irrigation Infrastructure Operators Program in 2012, the Productivity Commission undertook a review into the Basin Plan in 2018 and ANAO is currently conducting an audit into water purchasing.

The Basin Plan is a long-term reform with scientific basis and historic political support. It needs strong continued commitment to ensure Australians can enjoy the benefits of this important river system for many years to come.

Here are some facts to consider in light of claims made by Four Corners:

Claim The Facts
The Government doesn’t conduct robust checks on its water programs

The Department of Agriculture’s water programs are delivered with absolute integrity and subject to high levels of scrutiny. We operate within strict legal requirements for management of taxpayer funds. This includes:

  • Program guidelines are approved in accordance with the Commonwealth Grant Rules and Guidelines.
  • Applications are assessed by an evaluation panel of departmental staff, an independent irrigation expert and independent financial viability assessors.
  • An irrigation expert independently reviews and validates estimated water savings.
  • Independent due diligence assessment of water entitlements proposed for transfer by proponents is conducted by lawyers for every transaction.
  • Funding agreements are signed for every transaction where water is acquired.
  • Regular milestone reports to the Department include works progress, expenditure, inspections (including photographic evidence), and yearly audited financial statements as evidence of project progress. These are reviewed by the Department and approved by a delegate. Payments are only released on successful completion of the milestones.
  • Contracts allow for financial, technical and work health and safety to be conducted throughout project delivery, including visits from departmental staff on a selection of projects.
  • A 10 percent technical review sample of delivery partner sub-projects is undertaken to verify that sub-projects have been completed in line with the application form and requirements of the relevant funding agreement.
The big end of town benefits over more modest farmers

There were 1,525 projects funded through the On-Farm Irrigation Efficiency Program.

The vast majority are small farmers seeking to modernise their farming operations. The smallest project was just $16,000 and returned 5.67ML LTAAY to the environment. The median project size is about $152,000. Only 72 projects (less than 5 per cent of all projects) were larger than $1 million.

Farmers who own water can receive funding in return for transferring water to the Commonwealth. Whether they’re from the big end of town or the grassroots, they all go through the same rigorous assessment process, including reviews by technical experts.

These are secret deals

We seek to protect the privacy of farmers that participate but there are no “secret payments”. Funding agreements are signed for every transaction where water is acquired.

Independently audited financial statements are a standard requirement.

Transfers of water are recorded in the state and territory water registers.

Water savings are not real

Before the projects are even approved for funding, applicants have to provide evidence that each project is technically feasible and the engineering solutions are appropriate to the needs of the farmer.

On-farm projects were required to confirm that the projects have been reviewed by a competent irrigation professional, including validating water saving estimates.

The department engaged independent qualified engineering firms to review the applications and provide independent advice to the assessment panel on the validity of the estimated water savings. Where potential issues were identified, these were drawn to the attention of individual farmers and the farmers asked to confirm in writing they were happy to proceed.

On-ground works and water savings are verified at project level by on-farm delivery partners. This includes on-farm works progress inspections and a final review of completed works to verify the estimated water savings set out in each project application submitted by farmers.

Around 10 per cent of completed projects receive additional on-ground checks conducted by the department with an independent qualified engineer.

Real water is being held in the form of entitlements by the Commonwealth Environmental Water Holder.  There have been more than 750 planned watering events in the last four years that have already delivered environmental benefits. 

The Private Irrigation Infrastructure Operators Program is returning 142 GL of water to the environment every year on average – through 14 major irrigation network projects.

The On-Farm Irrigation Efficiency Program is returning 149 GL of water to the environment every year on average – through more than 1,500 on-farm projects.

Funding of water storages

Farmers can only store in their dams what they are legally entitled to. Building a dam does not give a right to take extra water. The right to water comes from the water licence held by the farmer.

On-farm storages allow farmers to use their water more efficiently, hold water for later use from when they receive allocations, and store and recycle irrigation water including to optimise when they irrigate.

On-farm storages benefit the environment by helping to control erosion and sediments, and minimising nutrient flows back into waterways which otherwise encourages algae blooms.

Irrigators can use more water

Irrigators can only use the allocation they receive on their licenced water entitlement. If an irrigator wants to use more water than their licence allows, then they have to buy more water on the open market.

The overall volume of water available for irrigation use has decreased as a consequence of water recovery for the environment.

he MDBA checks annually that the limit on water take in the Murray–Darling Basin is being adhered to at the catchment level. This shows that farmers are not taking more water than is allowed for under the Basin Plan.

There is plenty more to learn about the Australian Government’s water infrastructure investment on the department's website.