Wednesday, April 24, 2019

Today by Nick Feik


New developments in watergate scandal
The EAA deal is not the only buyback that warrants scrutiny

Image of the Lower Darling near Wilcannia

The Lower Darling, near Wilcannia.

The “watergate” scandal is only just warming up. As Paddy Manning wrote yesterday*, there are pressing questions about the $78.9 million buyback of water from Eastern Australia Agriculture (EAA). Who is the ultimate beneficiary? Why was the price so high (well above what EAA itself had earlier proposed)? Why will the Department of Agriculture and Water Resources not disclose full details of the transaction?

There’s another reason this scandal will grow: the EAA deal is not the only buyback that warrants scrutiny.

In June 2017, just a couple of months before the buyback in question, the same department under Water Minister Barnaby Joyce paid $78 million for water rights and adjustment payments to Tandou, an isolated cotton and grain property in the Lower Darling (near Broken Hill). As locals well know, water in this part of the Darling has been scarce since 2013, with “no-flow events” every year, culminating in the shortage that killed the fish in the nearby Menindee Lakes in January this year. Water licences can be very valuable, but they don’t amount to much if there’s no water – and Tandou is located even further downstream than Menindee. As journalist Michael West wrote, “The [Commonwealth] spend was almost double the valuation made by the government’s own evaluator, ABARES, as well as [that of] another private valuer.”

Bill Johnson, a former director of environmental water planning at the Murray–Darling Basin Authority, told Guardian Australia that this transaction likely amounted to a purchase of “ghost water”. It is “highly questionable whether the Commonwealth got any water for this money”, he said. The Australia Institute has devoted a research report to the anomalies of the buyback, which, like the EAA deal, wasn’t subject to an open tender.

As with the EAA deal, Tandou’s owners, Webster Ltd, booked a massive profit. According to a 2017 federal government lobbyist register, both were represented by the same consultancy, The Fifth Estate. As with the EAA deal, the government’s payment was disproportionately high; it would have made more financial sense for the government to buy the whole property rather than just the water rights. As with EAA, the business had been struggling in recent years, mainly due to a lack of reliable water. And as with EAA, Tandou was owned by a much larger agribusiness, Webster, many of whose beneficial owners are also based in tax havens.

(Here’s another curious revelation: one of The Fifth Estate’s few other agricultural clients listed on the same register was one Agricultural Managers Limited, which is based in the Cayman Islands and was set up the same day as Eastern Australia Irrigation, EAA’s parent company. Due to Cayman Islands law, it’s impossible to know what its activities are, or who are its directors or beneficiaries.)

The Coalition should explain why some large companies have been receiving multimillion-dollar payouts while hundreds of kilometres of the Darling are effectively dying. And why buybacks are spent on licences that may not yield any actual water while places downstream such as Menindee need water so urgently. And why tax-avoiding corporations domiciled in the Caymans siphon massive profits while people in Wilcannia are forced to buy drinking water in cardboard boxes shipped from Broken Hill.

These aren’t just matters of history.

On April 9 this year, two days before the federal government went into caretaker mode, Agriculture Minister David Littleproud pledged a Commonwealth buyback of A-class water licences (this is a particularly lucrative type of licence, which has an interesting history of its own).

After the Tandou sale, the Robinson family, a major shareholder, split one of its companies from Webster, and invested its money in land and water entitlements via a venture called Bengerang. According to The Canberra Times, Bengerang now owns the majority of the A-class water licences. And “the buyout bid could exceed $20 million”.

The (mis)management of the Murray–Darling is a burning issue, and requires more scrutiny than can be provided by the media and tenacious citizen journalists in the teeth of an election.

 

*Paddy Manning is on the campaign trail. Editor of The Monthly Nick Feik contributed today’s column.


GOOD OPINION

“There really do seem to be two election campaigns going on in Australia at the moment. Or, rather, there are two vantage points from which the ordinary punter can view what is happening.”

Frank Bongiorno dissects the impact of Twitter and social media on the coverage of the election.

BAD OPINION

“Governments have struggled with how do we solve sharing a very poor river. Let’s face it, it’s a terrible river.”

Pru Goward explains that the Darling River is ultimately responsible for its own degradation.

The Number

The amount that Labor that has pledged to spend on projects that will support gas fracking in Queensland’s Galilee and Bowen basins.

The Policy

“Scott Morrison is on the verge of securing a preference deal with Clive Palmer that would all but guarantee the Queensland billionaire a Senate spot and help ring-fence marginal seats the Coalition must hold to retain government.”

The Coalition’s stance on preferences is extremely cynical.

The list
 
HEALTH

“F45 Training, a franchise founded in Australia in 2011 by former equities trader Robert Deutsch, boasts close to 1500 studios in 40 countries. Approximately half are antipodean. And all day, every day, at every F45 gym, people do the exact same 45-minute class: from Adelaide to Atlanta, Brisbane to Beijing, Canberra to Cape Town, and so on.”

Comment

“What is government for? What does it mean? Who are we? Our own leadership ructions sprang from these questions, and after 10 long years, we have come back with a definitive answer: we don’t know. The 2019 federal election may be boring, but at least it’s boring in an unexpected way.”

NEWS

“Is Assange a journalist, a publisher or a freedom fighter? A misogynist, an anarchist, a narcissist or a mercenary? Is he Daniel Ellsberg or Kim Philby? Mikhail Bakunin or a digital Milton Friedman? Philosopher or con man? Is he some unstable compound of them all?”

Competition

The Monthly invites readers in Sydney to enter the draw for a chance to win a double pass to the Sydney Writers’ Festival Opening Address at Carriageworks, Sydney, on Tuesday, April 30.

This is a sold-out event, and will feature celebrated authors Nana Kwame Adjei-Brenyah, Max Porter and Meg Wolitzer.

Entries close at 11.59pm AEDT on Thursday, April 25, and the winner will be notified on Friday, April 26. ENTER HERE

Nick Feik

Nick Feik is the editor of The Monthly.

@nickfeik

 

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