The Coalition's Murray-Darling fail

It's becoming increasingly clear that water buy-backs are not the best way forward for the Murray-Darling Basin.

Equally clear, however, is the Coalition's hypocrisy and failure to lead on this issue.

The Coalition, which literally represents every electorate in the Murray-Darling, has opted to run an 'it won't work' fear campaign that is badly letting down the farming communities it represents.

To understand why, it was instructive to watch Malcolm Turnbull yesterday speaking on another major dispute with the government – our biggest ever infrastructure project, the NBN. Turnbull might have been given what Labor calls a "wrecking" mission by Tony Abbott, but as he complains about the lack of a cost-benefit analysis on this $2000 per tax-payer project, he spends as much time outlining what would be better.

The better option is not strictly the policy the Coalition took to the election, granted, but it is a variation upon that theme. Don't overbuild high-speed broadband capabilities that are already there, argued Turnbull. Let private sector investment continue to work in the cities, and help the bush catch up. And whatever you do, don't replace the old Telstra copper monopoly with a government owned fibre monopoly.

How starkly this contrasts with the Coalition's behaviour over water reform. The wrecking ball is out, but plans to rebuild the region have received scant attention.

Why? Because the Coalition is trying to forget that shortly before the election – at the Liberal Party launch on August 8, in fact – Tony Abbott's plan was very similar to what Water Minister Tony Burke is now doing.

"Water is probably the most urgent environmental challenge facing our country," said Abbott at the time. "The Coalition will end Labor's procrastination and fully and finally implement the Howard/Turnbull/Anderson plan for the Murray-Darling basin. Carefully targeted water buybacks plus much more efficient use of water has the potential to rejuvenate the Murray mouth and to protect Adelaide's water supply."

But that was before the election, when wooing city voters was still important. Now, despite having a deep knowledge of the Murray-Darling electorates and how to move both the region's economic and environmental fortunes forward, the Coalition is keeping its policy making skills at home, and using the issue only to destabilise Labor.

It is the people of the Murray-Darling who will suffer as a result.

To date, Barnaby Joyce has accused the Murray-Darling Basin Authority of being "stacked with green activists". He also sent waves of fear through communities by saying banks were preparing to foreclose on Murray-Darling businesses – a claim agreed with by neither the Australian Bankers' Association nor Nationals leader Warren Truss.

In a Senate Estimates hearing on Tuesday night, Nationals senator Fiona Nash called job-loss modelling by the Australian Bureau of Agricultural and Resource Economics Bureau of Rural Sciences "complete rubbish" – a charge ABARE defended in media comments on Wednesday.

Question Time has seen a constant barrage of questions hurled at Tony Burke, who patiently gets up time and again to say "the guide is not government policy" – only to be jeered off the stage by the opposition. His buy-backs are 'targeted', as the Coalition promised its own would be, and they are not set at 27 to 37 per cent – that is only the recommendation of the independent body that Tony Abbott also said he'd trust to make the call.

Liberal member for Farrer, Susan Ley, used Question Time on Wednesday to point out that a machinery dealership business in her electorate "will not be taking on two new apprentices next year as a result of their concerns for future business prospects, given the Murray Darling Basin Authorities guide".

Again, 'it won't work', is the clear message.

So far, so good. Maximum fear, minimum policy debate.

This is not behaviour befitting an 'alternative government'. If the Coalition really has abandoned the independent body its own legislation set up, perhaps it should explain to its Murray-Darling constituents why trusting their future to such a statutory body was a good idea in the first place.

If it really thinks buy-backs 27 to 37 per cent buy-backs are unthinkable, why not just tear up the extensive modelling done by the MDBA and just pick a figure it thinks is sustainable. How about 5 per cent? That was good enough for Rudd's failed CPRS scheme, so why not recycle the number for water reform?

The point is that the Coalition was the architect of the 2007 Water Act, but now wants to pretend the whole thrust of the Act is wrong. If so, it owes its constituents a better policy, to show why Labor's plan is so flawed. It should do for water what Turnbull is doing for broadband.

You don't have paddle far up river to find an alternative solution, but it doesn't come from a politician.

Clyde Agriculture, a large agribusiness operation owned by Britain's Swire Group, has given a new twist to the water reform debate. It has had several of its large Murray-Darling irrigation properties on the market for several months, but following the release of the MDBA guide, it thinks investors will eye its large, water efficient properties more favourably.

Managing Director of Clyde Agriculture John McKillop said: “The irony is that while the MDBA Guide is causing such anxiety about future water allocations for agricultural use, the one thing that is clear is that the value of water is likely to increase. This means the Clyde properties and their water entitlements, valued at current levels, present a lucrative opportunity for an astute investor looking for future water security, scale and productivity."

Okay, well he would say that – he's trying to offload the properties.

However, when I quizzed McKillop on how he would solve the Murray-Darling water problem, he offered a fascinating vision of what might be better.

He argues that the problems of the Murray-Darling – algal blooms, salinity, acid sulphate soils – took decades to form, and so should be given a longer period over which to be reversed. He suggests a 15 year time-frame. The ending of the nine-year drought gives the region a bit of time it didn't have before.

McKillop argues that buy-backs have a two-fold negative effect – the money spent is wasted because it "disappears to the coast", when it would be must better spent on improving water infrastructure. Secondly, as the opposition keeps saying, as farmers leave, the businesses that relied on their custom start to implode and communities wither.

It is true that these two problems have been central to the Coalition's 'it won't work' campaign – it has urged Labor to get on and spend the $5.8 billion water infrastructure funds set aside by the Howard government, and minimise buy-backs to keep local economies strong.

But McKillop goes a step further and suggests what will work. He believes the government should not waste any money on buybacks at all.

Simply cancel 1 per cent of water licences each year for the next 15 to 20 years, he says, and focus all government spending on improved earthworks, piping, water storage and more refined management of environmental flows.

The beauty of McKillop's prescription is that the government money "wasted" on buybacks, which has a negative effect on rural economies, would in effect become a large economic stimulus for the region. The companies and public agencies doing the earthworks, laying the pipes and managing the weirs, locks and pumping stations that control environment flows, would put more money back into local towns, not less.

McKillop's own properties have extensive investment in water management, be he believes that for all farms across the Murray-Darling, including his, a 1 per cent increase in productivity each year is "easily achievable" – especially if government funds were turned exclusively to this purpose, and the plan were given adequate time to be implemented.

"If anyone tells you that's not possible," says McKillop, "then they're either the best irrigator in Australia, or they closed their minds on water efficiency a long time ago."

Rather like the way the Coalition has closed its mind on replacing its own policy – one that before the election looked very much like Tony Burke's plan – with something more constructive.

Rob Burgess is Business Spectator's political correspondent. This article was originally published on Business Spectator.