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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-05-12 Daily Xml
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WATER ALLOCATIONS

The Hon. R.L. BROKENSHIRE (15:01): I seek leave to make a brief explanation before asking the Leader of the Government, representing the Premier, a question about foreign ownership of Australian water.

Leave granted.

The Hon. R.L. BROKENSHIRE: In the past month, there have been media reports concerning two issues relating to irrigation on the Murray-Darling Basin that are fast becoming interconnected. First, a foreign company is buying up permanent water allocations along the Murray-Darling Basin, 10 gigalitres so far. It is said to be equipped with a $500 million war chest for purchasing water allocations around the world. This company has apparently identified Australia as one primary target of its water purchasing.

Secondly, Timbercorp, a company which was supported by the unconscionable managed investment schemes that drove a lot of family farmers to ruin (a scheme that I have never supported), is now in administration and one of its most valuable assets to sell will be its water allocations. The Australian reported recently in its business section that Timbercorp administrators, KordaMentha, have received an offer from an unnamed group of overseas institutions proposing a $200 million-plus bid for Timbercorp's 120 gigalitre annual water entitlement.

I heard with interest the leader's answer to a question that I asked during a debate on the irrigation bill about water speculators. I infer from what the leader said that the government was happy to let the laws of the free market apply to a vital resource such as water. Perhaps, in his answer, the leader could clarify that, but it seems to be backing up what minister Wong recently wrote to me in response to a question similar to this. My questions are:

1. Has the Premier urged minister Wong to outbid the foreign speculators for Timbercorp's water for irrigation and environmental flow for South Australia?

2. What representation has the Premier made to his federal colleagues about the threat to South Australian water security if we have foreign ownership of water in the Murray-Darling Basin?

3. Given his previous statement to the council favouring a free market, is the Leader of the Government as unconcerned about foreign ownership as he is about free market principles applying to water ownership in Australia?

4. Is it possible that foreign investors are targeting Australia for investment in river water because of a lack of regulation of foreign ownership and market dominance?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (15:04): There are some very detailed and complicated issues mixed up in all that. In relation to what the Premier has done, I will obviously refer those questions to him. The honourable member also asked for my views on foreign investment in water.

As we know, within this country, foreign investment is an issue for the federal government. The Foreign Investment Review Board looks at such issues as takeovers, and we have seen that in relation to OZ Minerals. There is now the issue of Chinalco's investment within Rio. Those issues are addressed at the federal level, because clearly that is the level of government that constitutionally has the responsibility. We might all have a view in relation to a particular investment in the water industry.

My concern is speculative investment, rather than it being foreign. My experience down the years has been that foreign investment can be good or bad. It is not the fact that it is foreign, although in some instances that might be a factor, but in most cases I would have thought the key issue is whether investment helps the productive possibilities of this country or whether it is purely speculative.

We have a structure in this country to deal with these matters, and the appropriate jurisdiction is the commonwealth government. In relation to water, there is at least one thing: we know that water cannot be moved. It may be that water that is sold down a river, but the water remains within this country. Of course, the government has the capacity to regulate the conditions under which water is used. If the concern really is about unscrupulous speculation in relation to that, I suggest that is probably the level at which it is best addressed rather than the fact that it may or may not be foreign owned. In relation to the specifics of the question to the Premier, I will refer that to him.

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