Leftist State governments are to blame for Australia's urban water shortages, not nature

They haven't built dams for years, despite big population growth

Justified concern about the severity of the drought now facing Australia should not be allowed to obscure the abject failure of governments around the nation to secure adequate supplies of an essential resource. The failure is a lack of foresight rooted in political pork-barrelling to rural irrigators and greed at the expense of city water users. The result has been environmental degradation requiring billions of dollars to address, a crisis in agriculture during periods of low rainfall and the absurd situation of water rationing in a country at the peak of its prosperity. The problem for urban consumers has arisen because water has been traded through state monopolies that, when faced with a squeeze of their own making, have simply turned off the tap.

As reported in The Australian yesterday, the first national audit of water resources conducted by the National Water Commission has found the states continued to fail in water management. And the blame-shifting continued at yesterday's inaugural meeting of the Council for the Australian Federation, where yet another promise was made for a national focus on water. But there has been little progress on the long-promised national water market and the most pressing task: the buyback of water rights that have been over-allocated for decades by state governments keen to curry political support. Such a buyback has been identified as the most sensible - and cheapest - way to save rivers in the Murray-Darling system. The drought has made the task urgent but there is a reluctance for political and economic reasons. Buying back only water saved through covering open channels, and introducing drip irrigation and better water management has proved too slow and not enough. But new technology must be adopted. Among the predictions in The Australian's groundbreaking 2026 series starting next Saturday is that current irrigation methods will have disappeared in 20 years' time. Without these advances, it is hard to see how we can continue to justify growing water-hungry crops such as cotton and rice.

None of this addresses the issue of long-term underfunding in urban water resources. By 2026, water consumption in Brisbane will have increased more than 60 per cent. In Sydney, it will be up 35 per cent, with a similar figure in Melbourne. As the present restrictions demonstrate, water authorities have been negligent in planning for the future, both in terms of storage and interstate co-operation. Federal Parliamentary Secretary for Water Malcolm Turnbull has clearly outlined how greed has sponsored the short-term planning. It has done so because delivering "old" water from existing dams is very cheap, but delivering "new" water from new infrastructure is very high. This means that when government-owned water utilities have been faced with an excess of demand over supply they have protected cash flow and dividends by introducing water restrictions. The drought has brought the house of cards tumbling down, however, because restrictions are causing political pain. It is a classic tale of how state monopolies fail consumers. In the absence of market forces and competition, governments have treated water as a cash cow and run their businesses into the ground. The drought has forced a reappraisal that must ultimately bring proper price signals to the water market. This will both deal with uneconomic farm practices and stop the absurd situation whereby elderly residents are forced to water their garden using a bucket.

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