Water privatisation : The Australian story : selling a birthright for a mess of pottage

Wondering what Ian McNeice is doing in a wig
in a post on water privatisation?
Please go here for your amusement.
It was posted here.
Scroll down to find out the source and the reason.
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If Networkers want to get a grasp on Australia's water history then, alongside keeping up with the broad range of current issues, there is a need to develop a firm basis in history.  I discovered this for myself when I discovered the wonderful Joe Powell.  I live in Victoria and discovered Watering the Garden State: Water, Land and Community in Victoria 1834-1988.  Now it is about the Victorian story but this story has great impact on Australia's national water story because of the involvement of Alfred Deakin and because of the Murray Darling Basin and its development.

Having said that and taken Networkers way back in the settler history of Australia, let us go back to the dark ages of 1994.  This was when Paul Keating of living memory was Prime Minister.  The Council of Australian Governments (COAG) was a mere two years old.  

While we of the lower orders who are not closely involved in decision-making for the nation were sound asleep, COAG met and made some decisions.  The COAG decisions on water were far reaching and, if any of us of the lower orders noticed, we (moi included) probably nodded in agreement and went about our business.  Let's revisit what they said in their official communique of 25 February, 1994.

Water Resource Policy

The Council considered a report from the Working Group on Water Resource Policy, chaired by Sir Eric Neal, outlining a strategic framework for the efficient and sustainable reform of the Australian water industry. The report had been commissioned by the Council at its June 1993 meeting.

The report noted that, while progress is being made on a number of fronts to reform the water industry and to minimise unsustainable natural resource use, there currently exists within the water industry:

• approaches to charging that often result in commercial and industrial users of water services, in particular, paying more than the costs of service provision;
• major asset refurbishment needs in rural areas for which, in general, adequate financial provision has not been made;
• impediments to irrigation water being transferred from low value broad-acre agriculture to higher value uses in horticulture, crop production and dairying;
• service delivery inefficiencies; and
• a lack of clear definition concerning the role and responsibilities of a number of institutions involved in the industry.

The report also noted that there is a number of issues and deficiencies involving water and the wider natural resource base that require the attention of governments. These include widespread natural resource degradation which has an impact on the quality and/or quantity of the nation’s water resources.

The Council endorsed the strategic framework proposed by the Working Group and agreed to its implementation. Queensland, South Australia and Tasmania agreed to the broad principles but had concerns on the detail of the recommendations. The framework embraces pricing reform based on the principles of consumption-based pricing and full-cost recovery, the reduction or elimination of cross-subsidies and making subsidies transparent. The framework also involves the clarification of property rights, the allocation of water to the environment, the adoption of trading arrangements in water, institutional reform and public consultation and participation.

Implementation of the strategic framework is expected to result in a restructuring of water tariffs and reduced or eliminated cross-subsidies for metropolitan and town water services with the impact on domestic consumers of water services being offset by cost reductions achieved by more efficient, customer-driven, service provision.

In the case of rural water services, the framework is intended to generate the financial resources to maintain supply systems should users desire this and through a system of tradeable entitlements to allow water to flow to higher value uses subject to social, physical and environmental constraints. Where they have not already done so, States are to give priority to formally determining allocations or entitlements to water, including allocations for the environment.

Environmental requirements are to be determined on the best scientific information available and will have regard to the inter-temporal and interspatial water needs required to maintain the health and viability of river systems and groundwater basins. The Council also agreed where significant future irrigation activity or dam construction is contemplated, that in addition to economic evaluations, assessments will be undertaken to ensure that the environmental requirements of river systems can be adequately met.

Because the changes flowing from the framework are extensive and far reaching in their implications, the Council considered that a five to seven year implementation period will be required. Part of this process will involve governments consulting the community on aspects of the framework. The speed and extent of water industry reform and the adjustment process will be dependent on the availability of financial resources to facilitate structural adjustment and asset refurbishment. The detailed decisions of the Council in relation to water resource policy are at Attachment A.

The Council has asked the Working Group on Water Resource Policy to prepare a report for its first meeting in 1995 on progress in implementing the framework with further reports to be prepared annually on progress over the succeeding four years.

Networkers, we might not have known what COAG was up to - but it did. It had the blessing of the ACCC. The intention was - and it was carried out and has its impact on us all and on the land and environment of this nation up to this very day - to:

1. Unbundle land and water
2. Commodify water - made possible by the separation of land and water
3. Trade in water - once the water is unbundled from land; packaged in neat entitlements; then the stock exchange that is the water trading market can be opened for business and plunder.

I cannot prove that there was aforethought that the major international privateers such as Suez and Veolia would enter the fray in Australia - but I reckon, if COAG had not deliberately planned for this, there was a fair idea that it would happen.

The rest is history.  

I think there is a question or questions we need to ask our politicians (of all political persuasions) of then up until now.

1. Did you foresee Australia's current water crisis developing/.occurring?
2. If not, why not?  Too busy, disinterested, couldn't be bothered?
3. If so, why did you set the ground work for the vultures (i.e. Suez, Veolia, et al) to benefit and profiteer from our dried and drying bones and take our heritage from us.

~~~

Related reading:

The Evolution of Markets for Water: Theory And Practice in Australia (New Horizons in Environmental Economics)



Water Politics in the Murray-Darling Basin (Land and Water Australia Environmental Solutions)



Water Policy in Australia: The Impact of Change and Uncertainty (Rff Press) (Issues in Water Resource Policy)



Managing Water for Australia: The Social and Institutional Challenges