Junk Explained: What Is This New #Watergate Scandal Everyone Is Talking About
This might be the final scandal of the Coalition government.
Hello! You may have seen a bunch of news stories or tweets talking about something called #Watergate. No, this isn’t a story about Richard Nixon and secret White House tapes, it’s a story about an $80 million sale of flood water, and a government that really doesn’t want to answer questions about it.
It’s long and complex, but quite important, so we’ve tried our best to break it down for you. Let’s start at the start.
Ok, What Is The Murray-Darling Basin?
The Murray-Darling Basin is Australia’s largest river system, connecting tens of thousands of rivers in what is sometimes called Australia’s food bowl. It spans four states, beginning in southern Queensland, and flowing through NSW, the ACT and Victoria, before eventually running into the ocean in South Australia.
It’s a crucial system that provides drinking water to millions of Australians, livelihoods for tens of thousands of Aussie farmers, and food for the rest of us, as well as contributing to Australia’s tourism industry, and providing a home for a shitload of native wildlife.
Basically, it’s an extremely complex and hugely important ecosystem.
The ‘basin’ is exactly what you imagine it is: a huge bowl that catches all of the rainwater that falls in it, funnelling it into the river system, providing water for farmers, the environment and thirsty people in four states.
And What Are Water Buybacks?
Naturally, a system as large and complex as the Murray-Darling throws up some competing interests, especially when there’s not enough water to go around (like during a climate change-induced drought. Good thing that’ll never happen. Is it hot in here?)
For example, if too much water gets used at the top of the basin, then there won’t be enough water left for the people at the other end, which is bad, obviously. And if too much water is used overall, then there won’t be enough water left over for our thirsty birds and fish, and then you get something like the massive fish kill we saw in NSW earlier this year.
One of the unsung achievements of the Gillard government was the Murray-Darling Basin Agreement that was enacted in 2012. It was a huge deal between all of the big players that set limits on how much water could be used by each state, and how much would be left for the environment. It wasn’t a perfect agreement. It was more a case of “no one is entirely happy, but it’s the best we can do, and that’s ok”.
As part of the agreement, the government agreed to purchase around 2,750 gigalitres of water from farmers to pump back into the system. To do this, the government and farmers will trade water, in the same way that we trade commodities every day. That means farmers who don’t use all of their allocated water can sell it to the government, or the government can pro-actively go out looking for water to buy and pump back into the river system before it gets used by irrigators.
The idea is that by buying the water, the government can keep it in the river system, striking a balance between the needs of farmers and the environment. Everyone wins!
So What’s Everyone Mad About?
Ok, so this is where it gets really complicated. In 2017, the government spent almost $80 million of taxpayer funds to buy water from Eastern Australian Agriculture (EAA), a company that was founded and directed by the current Minister for Energy, Angus Taylor.
EAA made $52 million profit on the water, and that profit has now been funnelled to the Cayman Islands, where EAA’s parent company, Eastern Australia Irrigation (EAI) is based. The Cayman Islands are a notorious tax haven.
The Government’s been buying up water at record prices, leading to millions of dollars flowing to offshore tax havens. But now, two of our top pollies are facing questions over just who is making a fortune off our water.@HamishNews and @MichaelWestBiz bring you this report pic.twitter.com/5UTH1NHJzR
— The Project (@theprojecttv) April 18, 2019
Taylor says he no longer has anything to do with the company (he left it before entering Parliament in 2013), and there’s no suggestion he profited from the deal.
The whole process was conducted without an open tender, which means the government negotiated directly with EAA and no other companies were given a chance to make an offer. Why did the government buy this water? Why did they spend $80 million on it? Was this really the best use of taxpayer funds? We still don’t know.
And What Did Barnaby Joyce Do?
He lost his fucken mind, that’s what. Barnaby Joyce was the minister responsible for the sale, and documents published by The Guardian show he took particular interest in it, telling public servants to get final sign-off from him. He also imposed conditions on the sale, including asking EAA to invest in flood-preventing infrastructure in Queensland.
Despite this, Joyce says the negotiations over the sale were conducted “at arm’s length” from him, and denied that Angus Taylor had anything to do with it.
In a bizarre interview with the ABC, Joyce said, “I wouldn’t have known [Taylor] if he stood up in my corn flakes before he came into parliament.”
The government has bowed to pressure over its controversial 2017 water buyback, asking the Auditor-General to review all water purchases since 2008.
— The Project (@theprojecttv) April 23, 2019
“I do not negotiate the price. I do not negotiate the vendor. I am responsible for the overarching policy. The Greens wanted more water, so we bought the water”, he said.
Joyce also repeatedly tried to blame Labor over the sale,(At one point Joyce just kept yelling, “Labor, Labor Labor, Labor” at ABC presenter Patricia Karvelas) saying he was following a precedent set by the previous Labor government, including one $300 million water purchase made by then-Water Minister Penny Wong. The difference is that the Labor purchase was made using a more transparent, open tender process.
Also, Joyce has repeatedly refused to reveal where the profits from the sale would end up.
Despite all this, Joyce says he’s “100% confident” that any investigation into the sale will find no wrongdoing. Speaking of investigations…
What Does This Mean For The Election?
Hey! Did you know there’s an election on right now? And this whole scandal, which has creatively been dubbed #Watergate, is turning into an unwanted distraction for the government.
After days of trying to convince us there’s nothing to see here, Scott Morrison folded yesterday and referred all water buybacks since 2008 to the Auditor General for investigation, but that’s not enough to satisfy Labor and the Greens, who want a Royal Commission into the sale.
There are still a lot of questions to answer, mainly, who benefitted from the sale, and did the Australian taxpayer get value for money out of it? The government seems pretty determined to not answer those questions ahead of the May 18 election, which means this will likely continue to be an issue until then.
Rob Stott is the Managing Editor of Junkee Media. You can yell at him about politics @Rob_Stott.