Wednesday, 27 May 2009

A bundle of joy? Not.

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Yesterday, I was - unfortunately - reminded of the urban/rural divide when it became apparent that a well-educated colleague did not understand what "water bundling" was. It occurs to me that he would not be the only one - so here is the simplistic lesson in water bundling. This explanation touches only the surface of the matter and I am sure that people will write to correct me for any sins of omission or commission. Please note, that bundling is something that can be transposed to other utilities such as electricity and it has the strong purpose of allowing privatisation of the particular utility.

In 1994 COAG (the Council of Australian Governments) approved the unbundling of water. This was the beginning of the commodification of water and water trading in Australia. This was the deliberate privatisation of what a significant part of the Australian population, if not the majority, regard as a public good and a public trust - water.

People who live in urban areas may not understand what the unbundling and rebundling of land and water means. However, people living in a farming area, particularly an irrigation area, know precisely what it means.

Unbundling goes to the very heart of current water problems. It is not the only problem but it is highly significant. Pick up a copy of The Weekly Times and see the water prices quoted like stock exchange prices. There are people living in capital cities who trade in water who would not know a farm if they inherited one. Tandou (a major stock-exchange listed property on the Darling River in NSW) over the last financial year decided not to harvest. It is a large property with mixed primary production. It decided the best it could do for its shareholders was to trade its water allocations.

What we now see is that when a farmer leaves the land, the first thing he/she sells is not his land. It is his water allocation. Frequently, the water allocations are purchased by neighbours who profess to be helping the farmer out. Well, they are also helping themselves at the same time. Then the farmer sells the land - which, without the water allocations, is not worth much.

Australia has entered the land of rich and poor with water allocations. We have these days the phrase "social water" . There are numerous communities which have no access to "social water". This includes the water for sporting grounds. I have had reports that one can drive along sections of the Murray where there is brown, brown, brown. No water. And then one can come to miles and miles of crops which are verdant. This is where there are corporate holdings of land and extensive matching water allocations.

This is also central to a major hold out by Victoria who has refused to lift its 4% cap on interstate water trading.

Under pressure from the Commonwealth, NSW & SA, Victoria has had to give in during the last few weeks- but it put up quite a battle.

Coupled to this is the non-accounting or poor accounting of water. Australia does not know what it has. There has been poor record keeping and we have had over-allocation of water by govts at all levels and of all persuasions. The Australian Govt has set up the National Water Accounting Model but this is going to take a long time to crank up and give meaningful and somewhat accurate reporting.

I could also talk about the corporatization of water management in the hands of State Governments which came about as a consequence of all this. For instance, the Victorian Govt is the only shareholder of the public water corporations and there is no requirement for it to report to Parliament.

For more information, please go here.


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