$5bn used to safeguard Murray-Darling from drought largely in vain, says study

More than $5bn used for reforms to safeguard the Murray-Darling river system from drought has been largely in vain, new research has found.

About $3bn of taxpayers’ funds used for improving farm irrigation had been a boon to private individuals but led to no cut in water use from the start of the last drought crisis, according to the Australian National University study.

Quenton Grafton, the director of ANU’s centre for water economics, which has tracked water use under the plans since 2012, said policy makers needed to “go back to the drawing board”. Grafton said there was “no discernible impact in terms of reduced water use on a per-hectare basis, or in terms of reduced water diversions”.

“More than $5bn in the past 10 years has been spent on recovering water by irrigators (on and off farm) or buying water entitlements, yet there is very little to show for it,” he said.

The report, Water Reform and Planning in the Murray-Darling Basin, argues the plan’s target of recovering 2,750 gigalitres was not based in science but a bid “to help resolve a political impasse with the [South Australian] state government”.

Grafton called for “focus on the evidence and facts rather than rhetoric and special interests”. He said the Murray-Darling plan failed to factor in climate change “in any meaningful way”. “Whatever reduced diversions are achieved over the 10 years of the basin plan, they may already be undermined by higher temperatures and a more variable climate.”

The study found the buyback of water rights from willing sellers was the best use of taxpayer funds. But this was halted by federal legislation with bipartisan support in November.

The Irrigators Council then welcomed the move, saying the removal of more than 4m megalitres of entitlements since 2004 had turned communities into “ghost towns”.

The ANU study found investments in irrigation to lift “drop-per-crop” efficiency had failed to deliver water savings on a basin scale. “We found the average volume of water applied per hectare is virtually the same in 2014-2015 as it was in 2002-2003 at the onset of the millennium drought,” Grafton said.

Grafton said the lack of meaningful water diversions back into the river system would “mean a whole range of negative implications for people that rely on the river, especially when the next drought comes”.

Barnaby Joyce, the deputy prime minister and minister for agriculture and water resources, has been a champion of “on farm” irrigation improvements to deliver water savings to the Murray-Darling.

In 2015, Joyce said: “Throughout the system we are actually ahead of the game with what we anticipated to be savings from on-farm measures. It shows the incredible nexus between agricultural and water resources, because you are not going to get the savings in water resources unless you have a clear understanding of the agricultural requirements.”

But Grafton, in an editorial published in Water Reform and Planning on Tuesday, said giving subsidies to farms was “almost certainly not a good idea”.

“It is one thing to put taxpayers’ funds into something if you get a public benefit,’’ he said. “But if all you are doing is putting billions of dollars into subsidies and getting little to show for it ... you are simply providing transfer payments to irrigators.

“I am not against transfer payments, but you do it to people who are vulnerable.”