Over the past week, we’ve had a stark reminder that in this life, farmers have stand up for themselves, because people these days will believe anything.
Like all of you, I was gobsmacked by the latest outburst from Greens’ leader Kim Booth, decrying the rollout of irrigation schemes in Tasmania, alleging they lined the pockets of rich landowners lucky enough to be within irrigation zones. The world knows the Meander Dam, he says, has not delivered one extra potato.
Unbelievable.
If you unpack that statement, what Mr Booth is suggesting is that there is some conspiracy between the Greens’ former colleagues in government, the ALP, and now the Liberals, at state and federal levels to splurge taxpayers’ money on some huge water scam to benefit a few wealthy Tasmanian farmers to the exclusion of the rest of the community.
A conspiracy on this scale is simply unimaginable – and simply not true.
Far easier for Mr Booth to deliver a spray to the ladies and gentlemen of the press than to read the documents that would throw light on why governments at two levels and Tasmanian farmers would enter a partnership that involves the farmers putting in four or five times as much as the governments to deliver vital infrastructure that secures Tasmania’s agricultural future, virtually regardless of drought.
Read the reports, Mr Booth.
We all know that Tasmania’s irrigation schemes do not materialise out of thin air. They have to be justified; the numbers have to be crunched and they have to add up, or they don’t get to first base.
Irrigators must first mount a business case for each scheme. If a proposition is deemed worthy of consideration, Tasmanian Irrigation prepares a detailed benefit/cost analysis that assesses total environmental, social and economic impacts. If the business case stacks up well and passes that test, investors have to stump up the money to construct the scheme. That’s important – without a majority of the water in each scheme being pre-sold to private investors, not a cent of government money will be spent and the scheme will not proceed.
No scheme benefits a select few farmers. A pipeline may pass along a farm fence but, for it to cross the boundary, farmers have to pay for a water entitlement; and then they have to get the water from the fence to their paddocks.
We’ve crunched some numbers on the real cost of the schemes. The cost of constructing all schemes in the first tranche was estimated to be around $319 million. This was made up of $80 million funding from the state government; $149 million funding from the federal government; and approximately $90 million from farmers and other private investors.
That gets the water to the farm gate. We calculate that for every dollar invested in construction of schemes, irrigators will put in a further $2 to $3 to get the water from the gate to the paddocks.
Let me state that more simply: for every dollar the state government invests in irrigation schemes, the federal government invests around $1.86; farmers then cough up around another $1.12 to purchase irrigation entitlements, and about another $2.50 to use the water. That’s a pretty solid multiplier benefit: $229 million of public funding leverages almost $800 million of private investment in Tasmania.
I’m sure it will come as no surprise for you to learn that nobody invests these sums of money without having carefully considered the value proposition. Many will seek finance to purchase water and their lender will also assess the business case. So, frankly, Mr Booth’s criticism is both wrong and offensive; and his assumption that farmers do not consider business cases and possible outcomes insults every investor.
Furthermore, it is mainly Tasmanian businesses that are supplying this infrastructure and associated goods and services. We’re talking about engineers, rural suppliers, equipment suppliers, agronomists, earthmoving contractors, fencing contractors, accountants – the list goes on and on. Along with the farmers, they employ people; they pay those employees; and those employees spend their money in Tasmania, supporting rural communities and rural jobs.
Not only is this clean, green and clever, it is helping to secure the future for many Tasmanians in what we all know are difficult economic times.
This investment is not a handout. Rather, it shows government offering farmers a hand up, helping them to invest in their futures. This in turn, generates jobs and wealth that keep rural communities viable over the long term.
There aren’t too many other government investments that can pass that test.
TFGA chief executive Jan Davis
