FREE TRADE IN WATER

The Victorian government's, possibly unconstitutional, stance on Water Trading, both entitlement and allocation, has been highlighed by an article in The Australian newspaper today to suggest a High Court challenge under Section 92 of the Constitution. The article appears below:

February 18, 2009

Article from: The Australian

It's time for Victoria to deregulate the rights market

"ALL'S well that ends well," South Australian senator Nick Xenophon said last week, when the Rudd Government promised to bring forward $500million to buy water for the drought-depleted Murray River in exchange for his support for the stimulus plan. But whatever Senator Xenophon says, the state of the river is a play that is far from finished. While Canberra is a buyer, Victorian Premier John Brumby has ensured there are not enough sellers to significantly increase the amount of water flowing down the river. Mr Brumby believes his state has done its bit to save water and that a cap of 4 per cent on water trades out of any irrigation district should stay in place, at least until the end of the year. "The call to save the Murray is the right one, but it should not mean sacrificing small communities along the way, especially for no environmental gain," he wrote in The Australian last July.

Especially when the "small communities" vote in Victorian elections. Perhaps Mr Brumby remembers the way Jeff Kennett lost office by ignoring the bush, but whatever his motivation the Premier is putting parochial politics above the economic and environmental interests of farmers with water rights they want to sell, as well as the health of the river.

This play has been performed for 15 years, since state and federal governments first agreed Australian agriculture must use water more efficiently by trading annual and permanent rights. But there have always been politicians, such as Mr Brumby, keen to spoil the show by placing local interests above those of the nation. There is talk of a High Court case against Victoria on the grounds the cap on water trading breaches section 92 of the Constitution, guaranteeing free trade between the states. This should not be necessary. Rivers are no respecters of state boundaries and Mr Brumby must allow the water market to work in the national interest. It is time he realises that by agreeing to a single authority to manage the Murray last year, Victoria accepted that the river is a national asset. The state of the Murray, especially the drying lakes at its mouth, makes this no time for political theatrics.