21 Oct 2020
Access to reliable, affordable water is one of the most critical factors in the future success and growth of agriculture in Queensland; and achieving Australia’s goal of a $100 billion sector by 2030. With over 60,000 Queensland jobs across the agriculture supply chain, the sector is the largest employer across regional Queensland and there are significant opportunities for the agriculture sector to provide a platform for Queensland’s economic recovery following COVID-19.
However, this success and growth is reliant on the confidence of existing and prospective agricultural investors to access affordable, reliable and secure irrigation water. On-farm water utilisation is in decline despite ongoing drought conditions, nevertheless, current political rhetoric is concentrating on new irrigation infrastructure. To capitalise on future opportunities for the sector, deliberate and strategic action from the next Queensland Parliament is required to deliver the right policy settings.
QFF welcomed the irrigation water price freeze for 2020-21 but noted this did not address the effects of high irrigation prices which are limiting investment and production in the sector. For example, the Queensland Competition Authority (QCA) reviewed Sunwater’s costs this year and reduced them by 12 per cent. This is a significant reduction, but it does not go far enough. We know that Sunwater’s costs could be lower because of the local management arrangements (LMA) experience which has seen operating costs in these water schemes reduced by an average of 24 per cent, yet their success has gone unrecognised and their valuable learnings unutilised. It is important to clarify that the agriculture sector is not looking for a subsidy or a handout, we want to work with relevant stakeholders to reduce the cost of water. Cheaper irrigation prices would allow for increased water use and support on-farm viability and profitability, creating jobs and wealth in the regions.
A significant and ongoing concern is also dam safety costs. The current government policy is to fund $42 million worth of dam safety upgrades for the duration of the current price path (to 2024). QFF provided a comprehensive submission to the QCA outlining that these upgrades are required to protect communities and should be funded in the same way as other safety (for example road safety) programs.
The next Queensland Parliament has the opportunity to generate long-term economic growth and stability in regional Queensland by rapidly using the available Federal funds for water infrastructure studies and contributing funding to economically viable projects that have investment from the Federal Government and farmers. The recent Federal Budget committed an additional $111.4 million from 2020-21 to 2023-24 for water infrastructure feasibility studies under the National Water Infrastructure Development Fund (NWIDF). Of this, $47.6 million is allocated directly to Queensland, but relies of the State and Federal governments reaching agreement on the studies needed. There is also a further $25.5 million of funding that is not yet allocated. The Queensland Government must work with QFF to quickly progress its deliberations and discussions with the Federal Government and secure this funding, otherwise, it will simply be allocated to other States and Queensland’s farmers will miss out.
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