Treasury Secretary Ken Henry is not the only senior Federal bureaucrat who thinks his advice was ignored — or not even sought — before the Government announced it intended to take control of the Murray Darling Basin.

When Prime Minister John Howard wrote to the Premiers in February with details of his $10 billion plan for the basin, a senior officer of the Federal Environment Department rang a state counterpart requesting a copy of the letter. That the officer, with years of experience in formulating Commonwealth water and environmental policy, had no idea what the PM was proposing is further evidence of the extraordinary way in which this major policy decision was reached.

It is now clear that the decision by Prime Minister John Howard to try and take over management of the Murray-Darling system had very little to do with anything other than politics. Knowing that global warming had become an issue favouring Labor, Howard and his then Parliamentary Secretary for Water, Malcolm Turnbull, decided that a grand plan to save the Murray was the ideal diversionary tactic.

An Office of Water Resources (OWR) was established by the Prime Minister on 26 September 2006 supposedly “to provide greater Commonwealth leadership in the sustainable management of Australia’s water resources” and a man rather unfairly sacked by the South Australian Government as head of its state transport system was brought in to run it.

Dr James Horne had moved to Adelaide from a position as a first assistant secretary in the Department of Prime Minister and Cabinet and 15 years in senior positions in the Federal Treasury. He returned to Canberra after his dismissal when he advised the SA Government that he was not prepared to consider an alternative position in the South Australian Public Service.

Dr Horne was the man given the unenviable task of developing the Murray-Darling plan that now threatens to become a considerable embarrassment to Mr Howard. Not only has Dr Henry cast doubts on its financial soundness, but the Victoria is still refusing to participate.

As if the Treasury assessment was not enough ammunition with which to embarrass the Government, Labor is sure to trot out again the evidence Dr Horne gave to a Senate Estimates committee earlier this year. Labor Senator Penny Wong asked how it was decided that $3 billion would be set aside for structural adjustments and buying water entitlements as part of the water plan.

“The Government has done no modelling of any impact on employment, no assessment of the numbers of people who might have to exit the industry and has not costed any price for purchasing entitlement,” she said.

Doctor Horne agreed that was the case. “As far as it goes, that’s correct,” he said.

Senator Wong said the Commonwealth could not know if the funds were sufficient, but Dr Horne said the figure was based on sound estimates.

Environment Minister Malcolm Turnbull is the man with the difficult task of rescuing what his leader planned as a key plank in his efforts to establish the environmental credentials of the Government.

This week, Mr Turnbull was down by the river in Victoria trying to persuade irrigation farmers to back the $10 billion plan but, as The Age reported, he was having some difficulty. The Victorian Farmers Federation told him it wanted a written guarantee that Victorian irrigators would maintain their existing water entitlements and property rights and a written guarantee that bulk water entitlements — legal agreements that divide the water in the Murray-Darling Basin between environmental, agricultural and urban users — would not be reviewed until 2020, as enshrined in state law.

Until the VFF is satisfied, the Victorian Premier Steve Bracks is not inclined to join his fellow Labor Premiers from NSW, Queensland and South Australia and give the Commonwealth the powers it is asking for.

Federation president Simon Ramsay is in no hurry, saying that “the view by industry is that there is some urgency for the Prime Minister to get all the states signed up. I’ve said to Malcolm (Turnbull) we won’t be pushed into trying to meet their election deadline merely to satisfy the PM”.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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