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Profiteering from water

By Bruce Haigh - posted Wednesday, 30 April 2008


The head of Treasury, Ken Henry, is, in my opinion, wrong in claiming that the market will regulate and conserve water through price. It will not. It will create winners and losers, cartels and monopolies, which will only work to the benefit of the big producers and the top end of town.

Such an arrangement would be feudal and one need look no further than Pakistan to see how it would operate and the extent to which equity would be lacking.

By what leap of faith is it asserted that licence holders will sell their licences to government when commercial assessments might lead to the conclusion that the market will offer six or 20 times the amount being offered in five or 10 years time? The same considerations will apply on the purchase of water for environmental flows. By acceding power to licence holders the government has become a mendicant, subject to the greed of the market place in relation to a scarce resource.

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Faced with growing shortages for environmental and humanitarian needs the government might move to regulate prices and minimum purchases, however government regulation of private monopolies and cartels is an imperfect instrument as we have seen with Telstra and the oil companies.

Why, as we move into climate change, would any government seek to diminish its control over the conservation, regulation and distribution of scarce resources?

The behaviour of the oil companies should be a salutary lesson. How long will industrialised countries be able to tolerate and absorb the gouging now a feature of the oil market? And water, it might be argued, is an even more vital commodity.

Unspoken and un-argued is the need for a complete audit of Australia’s water resources past, present and future. Areas outside of the MDB, particularly Western Australia look askance at the eastern centric focus on the MDB as addressing the water problems of Australia. What is needed is a National Water Authority (NWA) to conduct such an audit and maintain a scientific and research overview of Australia’s water resources of which the MBD forms a part but only a part when account is taken of the Northern Territory, WA, northern Queensland and Tasmania. It is difficult to understand how proper and informed decisions can be made in the national interest, without such an audit and without such a body to maintain a close and ongoing focus.

As climate change advances, the demand on governments to equitably manage scarce resources will grow. How will this be achieved if they have yielded the power to do so?

Any analysis of the effect of climate change on governance must lead to the conclusion that the era of the privatisation of assets of public benefit and necessity is over. Scarcity and shortage will require the intervention of government to maintain a reasonable quality of life and evenly balanced productivity.

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To favour major interest groups at the expense of equity will sooner or later lead to internal unrest and the movement of people.

To conclude I offer the insight given to myself as the result of a brief exchange during the course of the last election.

At the last Federal Election I stood as an Independent candidate for the seat of Parkes. There were two Independent candidates; the other appeared to be quite well funded. Following a radio interview in Dubbo on the question of water and irrigation in which I made many of the points above, including a plea for equity for all water and irrigation stakeholders, I received a call, within half an hour of the interview, from an individual who said that Independent candidates did not speak about water and irrigation in the terms that I had. I later identified him as the CEO of an irrigation association.

Self interest and the need to maintain and expand that self interest in the face of water shortage has destroyed the concept of equity and the benefit of the greater good for long term survival.

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About the Author

Bruce Haigh is a political commentator and retired diplomat who served in Pakistan and Afghanistan in 1972-73 and 1986-88, and in South Africa from 1976-1979

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