State government says VFMP position vindicated by new report

A Department of Environment, Land, Water and Planning has report backed the State Government’s decision to discontinue the VFMP, set up between the State and Commonwealth in 2010.

Water Minister Lisa Neville agreed with the DEWLP report, which said any future projects could not involve the transfer of water entitlements to the Commonwealth Government, as they would result in negative socio-economic impacts on the broader community.

“We will keep working with Victorian landholders to deliver on our targets under the Murray Darling Basin Plan, while ensuring off-farm recovery can be delivered with neutral or positive impact to landholders and the community,” Ms Neville said.

She said Victoria also wanted to know what was going to happen to the $10million of unspent Commonwealth VFMP funding.

“I will seek assurances from the Commonwealth that any remaining funding for planned Victorian modernisation projects continues to be invested in Victoria,” Ms Neville said.

The DELWP report recommended the government work with the Commonwealth to finalise the VFMP.

“On-farm programs that require water to be transferred to the Commonwealth are an indirect way of buying water and reducing the consumptive pool, impacting agricultural profitability and the viability of public irrigation systems,” the report found.

It also suggested Victoria consider recommendations from Ernst and Young’s assessment of Basin Plan impacts on the southern connected Basin.

That could result in new off-farm water recovery options that avoided greater social and economic impacts, if they were required to meet Victoria’s commitments to Murray Darling Basin Plan outcomes.

The DEWLP report found Victoria should identify and prioritise unfunded water savings projects from distribution losses and operational changes, based on assessments made for the Connections Project reset.

“These projects can recover further water for the environment, do not take water away from productive use and avoid damaging social and economic impacts,” the report found.

DELWP also suggested Victoria explore the use of the $1.4 billion Commonwealth Special Account funding, to engage with communities in areas most affected by changes in climate, land and water use.

“This could include (identifying and rationlising) areas where there is little public benefit to invest in infrastructure improvements, because water entitlements have low reliability, and there are limited tools available to increase resilience.”

Under the first tranche of the VFMP – which cost  $30m – nine gigalitres of water was transferred to the Commonwealth.

Seven irrigators signed up for tranche two, which attracted $40.2m funding.

The DELWP report found that in its lifetime, the VFMP delivered around 17.4 gigalitres (GL) of water to the environment

That was on top of the 800 gigalitres of Victorian water, already recovered under the Murray Darling Basin Plan, since 2013. 

That was about two per cent of Victoria’s contracted Basin Plan water recovery to date.

Ms Neville said the DELWP report confirmed government concerns about the loss of water under the VFMP, in its current form.  

“Further water recovery from irrigators in our food bowl will cause significant social and economic harm,” Ms Neville said.

"This review highlights the concerns we have been hearing from our community.”

Victorian Farmers Federation Water committee chairman Richard Anderson said the organisation supported modernisation projects, but not in their current form.

“Currently too much water is going out of the consumptive pool,” Mr Anderson said.

He urged the government to look at other projects.

“I wouldn’t say it’s dead. It might be dead from the point of view of the Commonwealth program, but it's not dead in terms of putting up our own state scheme.

“There is a fair bit of negotiation to be done on these things, but nothing is impossible if you try hard enough.”

Mr Anderson said it was just a matter of getting “all the players lined up.”

Shepparton Independent MP Suzanna Sheed said some farmers would be disappointed, as they had missed out on the project.

“But we know we can’t give up more and more water out of the consumptive pool,” Ms Sheed, who also co-chairs the Goulburn Murray Irrigation Water Leadership Group, said.

She said of it was worrying that the 450GL of environmental downwater was back on the table.

“It concerns me that we have moved from no 450 to ‘how to do we get the 450?’,” Ms Sheed said.

Ms Sheed said the group would continue to lobby over the 450GL neutrality test, to get it more applied more broadly. 

Dry conditions in Victoria had been exacerbated by water loss, which was pushing up the price of temporary water.