Hundreds of millions in farms funding in limbo over water stand-off

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Victorian farmers will miss out on hundreds of millions of dollars worth of water-saving infrastructure projects unless the Andrews and Albanese governments sort out their impasse over the revived Murray-Darling Basin plan.

The state could also be cut out of the administration of any future community compensation deals, unlike NSW, unless it softens its long-term opposition to voluntary water buybacks.

Premier Daniel Andrews, left, and federal Water Minister Tanya Plibersek are in a stand-off over the revived Murray-Darling Basin plan.Credit: The Age

A federal government source, who spoke on condition of anonymity because they were not authorised to speak publicly, confirmed Victoria would have received nine figures worth of federal infrastructure funding had it signed up to the revamped water recovery plan.

The source added that communities in northern, central and western Victoria would still receive compensation for any future water buybacks. However, because it has not signed up to the current plan, the Andrews government would not have control over those projects.

Instead, the federal government plans to determine the size and scope of any compensation and then have local councils administer the funds. That is in contrast with NSW, which signed up to the latest iteration of the Murray-Darling rescue plan, and will get a say in those projects.

Victorian Farmers Federation president Emma Germano accused the federal government of “extortion”.

“It undermines the actual outcomes the original basin plan was trying to achieve,” Germano said.

“Ultimately, [federal] Labor are abolishing their own legislation from 2012 which, very importantly, had bipartisan support and the support of all the states. If the minister is genuinely after environmental outcomes, why would the feds be withholding funds for Victoria to finalise those water-saving projects?”

In response to questions from The Age, Victorian Water Minister Harriet Shing said the state had delivered more water back into the system than any other jurisdiction.

“We will continue to work with the Albanese government on a way forward to complete our critical environmental and infrastructure projects and deliver their proven environmental benefits,” she said.

Speaking to the media in Adelaide on Wednesday, federal Water Minister Tanya Plibersek said her office would remain in “constant contact” with Victoria.

“What’s in this for Victoria? I can tell you what we’re offering. We’re offering more time for them to complete the projects,” she said.

“We’re offering them more money to complete projects and any structural adjustment. And we’re offering more options to deliver on the targets in the Murray-Darling Basin plan.”

The basin plan was agreed between the federal, NSW, Victoria, Queensland, South Australia and ACT governments in 2012 to restore river health by recovering roughly six Sydney Harbours’ worth of water – or 3200 gigalitres – principally from farmers, who had been allocated unsustainable volumes of water for irrigation.

But water recovery has been stalled at around 2100 gigalitres since 2015 and, as it stands, the basin plan is on track to fall short by around 750 gigalitres by the current deadline of June 2024.

Plibersek has said urgent action is needed to avoid environmental disaster, with a potentially drought-inducing El Nino weather event looming over the coming summer. Over the long term, the Murray-Darling Basin Authority has forecast that inflows to major rivers could halve by 2060 under the current trajectory of global warming.

The Andrews government has opposed voluntary buybacks for years, arguing that the loss of irrigation water entitlements harms regional economies.

The state opposition’s water spokesman, Nationals MP Tim McCurdy, said he was pleased the Andrews government had held firm on its resistance to water buybacks.

“Tanya Plibersek has decided it is easier to strong-arm and bully states into submission and destroy farming communities in the north of Victoria than work on a solution that includes all basin states,” he said.

But Greens MP Sarah Mansfield accused the Andrews government of putting the whole system at risk.

“Water in the Victorian Murray has been over allocated, over extracted and misused for far too long,” she said.

“It is beyond distressing to see the Victorian government stubbornly refuse to take this opportunity to participate in Commonwealth water buybacks that would get real water back into the basin.”

NSW Water Minister Rose Jackson said on Wednesday that her government does not support water buybacks, but signed up to the new agreement because it believes it will reduce the risk of further federal government interventions.

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