Scott Hamilton - Sold Down the River: How Robber Barons and Wall Street Traders Cornered Australias Water Market

The Murray-Darling Basin is Australias greatest environmental asset. The story of water in Australia is written into its ancient rivers, creeks and wetlands. Its home to more than forty Indigenous nations, and it covers an area bigger than France. It is the beating heart of our regions and sustains 40 per cent of our food production.

In 2012 Australia signed up to the Murray-Darling Basin Plan, a scheme designed to create a market for its water and to safeguard the environment.

But the Plan has gone horribly wrong. It has sold our farmers and rural communities down the river. It has contributed to appalling environmental damage on the planets driest inhabited continent. It has allowed a ruthless market to form, exploited by traders who buy and sell water as if it was a currency like Bitcoin.

Scott Hamilton and Stuart Kells, both experts in public policy, have interviewed irrigators, farmers, Traditional Custodians and water traders to tell this disastrous story. Their compelling expos brings to light how we have failed to protect our most precious natural resource.

You cant understand Australia without understanding water. Sold Down the River is compulsory reading for all of us.

David Crew: As bad as things are, David Crew said, I see a window of opportunity. Understanding that we can share values. Were seeing a window of opportunity here at our high school. Next year, all of the year sevens will be doing a language and culture stream. Every year seven for three periods a week, the whole year, will be doing something relating to local language and culture. And then year eight are doing whats called the sustainability stream. Theyre working in our local wetlands and in our lagoons in Deniliquin. Its a culmination of ten years of work and its actually changed the amenity of the local town.

Damein Bell: In 2010, a 70-metre-long weir wall (with a fish ladder for eels and fish) was completed to fill the lake of Budj Bim. The government was really good working with us, Damein Bell said, in how we wanted things done in regards to the hydrology, the digital landscaping, but each time you sort of had this man come down and he said, Well, how are going to work out your water allocations? So we would say, Well, we will get it from our ancestors. Where do you get yours from? And he sort of scuttled away.

The last time the lake had been full was during the 1946 floods. Within two weeks of the weir being completed, rain filled the lake in a single weekend. It was amazing to see the water snake across the dry lake-bed to hook up with traditional infrastructure on the other sideThe restoration has worked wonderfully. Even in the middle of summer, when it got to 37 degrees, the lake still had a good body of water in it and there were still birds there. The mob have been out there fishing.

Ben Dal Broi: Ben continues to advocate for sensible water market reform, including through the Benerembah Warrawidgee Water Users Association. Governments are hostile to the idea of a royal commission, Ben said. Im not in love with the idea as it is expensive and drawn out, but I can understand why it appeals to many people. Royal commissions are usually demanded by people desperate to be heard pointing out a major systemic failing that the current authorities either cant or dont want to fix. Think The emperor has no clothes.

When I asked federal politicians for their views on a royal commission, one said, Be careful what you wish for, in that farmers could potentially be worse off. But from my perspective its hard to see how irrigators could be worse off.

Sadly were the victims of a massive experiment gone wrong. To fix one set of problems, governments have created bigger ones by rushing the forced implementation of a deregulated market system. However, the Basin isnt a perfect market. There have been a small number of massive winners, and many losers, including the communities and the environment. The irony is that they are seeking to re-regulate the market. Look, I support necessary reforms, but to properly fix something this big and complex needs to be done with support of good science and common sense, and done cautiously, over decades.

Shelley Scoullar: Cereal company Kelloggs featured Shelley in the 2018 ode to a farmer series to celebrate 100 years of using Australian grains. The company sent an acclaimed virtual reality artist to render Shelleys farm digitally. Subsequently published, the rendering was a wonderful celebration of Shelleys achievements and her love of farming. But in the new world of Basin agriculture, even dedicated and passionate farmers were pushing uphill. In 2019, Shelley said, we had to make some really tough decisions. For me, growing rice was what I loved and was passionate about. But I felt we werent going to be able do that year in, year out. We made the tough decision to sell the farm.

Shelley has mixed views about the future. We have great opportunities, she said, for farms, towns, the environment, our ecology, Indigenous reconciliationbut we have to make it happen or were doomed.

Long-Term Capital Management (LTCM): After a run of annual returns of 30 per cent or moredue to extreme risk-taking and super-complex arbitrage trading, much of it via the over-the-counter marketLTCMs returns fell into deep negative territory. It turns out there were fundamental errors in the maths that the arbitrageurs were using. Very awkward for the founders, including two Nobel Prizewinning economists. LTCM was bailed out, and it earned a new name, short-term capital mismanagement.

Enron: The collapse of Enron in 2001 led to a series of prosecutions and subsequent appeals. Many of the original allegations made against Enrons leaders and the auditor Arthur Andersen turned out to be false. Knowing this, the US government, its regulators and the legal system were eager for the matter to go away. The auditors were ultimately cleared, as were other principal players in the affair. Not only were Enrons tactics largely lawful, they were very similar to what Wall Street banks did every day of the week.

c. 100,000 BCE to today: The oldest fossil of the modern platypus dates back to around 100,000 years ago. The Ornithorhynchus anatinus, or the duck-billed platypus, is a unique egg-laying semi-aquatic mammal. It eats annelid worms, insect larvae, freshwater shrimp and yabbies. Unlike for the kangaroo, a pouch would be a drag in the water, so the platypus hides with its young in burrows. The mostly nocturnal monotreme feeds her babies with milk, senses prey through electrolocation, and conceals a sting on her hindfoot.

c. 70,000 BCE to today: For 70,000 years or more, people have lived on the Australian continent, building a rich tradition of art and culture and assembling a deep body of knowledgewhich is science and engineering as well as culture and traditionabout water, the land and natural resource management.

In recent times, Traditional Owner organisations have noted that treating water as a tradable property right is at odds with many Indigenous beliefs. According to the Murray Lower Darling Rivers Aboriginal Nations submission to the ACCCs recent MurrayDarling Basin inquiry: For many First Nations peoples, the separation of water from land, the formulation of water products as commodities that can be held and traded for private profit and the disembodiment of water from its sacred and spiritual contexts are fundamentally at odds with deeply enshrined water values and custodial responsibilities.

Jeanette Crew, Mutthi Mutthi Elder, wrote in relation to the Edward/Kolety and Wakool floodplains and forests: These forests were our economic base for thousands of years and now provide no economic return for my people, while at the same time making many non-Aboriginal people wealthy. My peoples spiritual and religious connection to country are directly linked to, and cannot be separated from, the environment.