Barnaby and water by-backs – a fact check.

How accurate is the Prime Minister’s defence of Murray-Darling water purchases made when Barnaby Joyce was Minister?

By Anne Davies

Scott Morrison and Barnaby Joyce

Scott Morrison has defended Barnaby Joyce’s handling of water buybacks during his time as agriculture minister, including a controversial $80m buyback from Eastern Australia Agriculture.

The prime minister, speaking to reporters in Melbourne, defended the buyback.

“The information that’s been made available to the Senate inquiry directly by the department makes it very clear that these arrangements were conducted at complete arm’s length from any ministers,” Morrison said.

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Did Labor use the same process to buy water rights?

He has also said it was the same as the process used by Labor.

No. Under Labor, and during the first years of the Coalition government, water for the environment under the Murray-Darling Basin plan was purchased through an open tender process.

The government would advertise the valley where it wanted to buy water and the type of water entitlements it wanted (high security or lower security). Then it would invite farmers to suggest a price. The lowest priced water that best fit the department’s needs was acquired.

This process changed when Joyce became minister. In 2015 the Abbott government legislated a cap on water buybacks of 1,500 GL and Joyce announced he would no longer hold tenders because of what he said was the damage the program was doing to farming communities. When water is bought it can lead to irrigators closing down and the loss of jobs.

Instead, the government appears to have implemented a process of only buying water from willing sellers. The criteria for these purchases has never come to light, despite efforts by the Senate to get to the bottom of the sales.

In 2017 there were four such deals. The bureaucrat in charge of the program, Mary Colreavy, said in Senate estimates that some sellers approached the department, while in some cases the department went back to people who had failed to secure a sale in the past.

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The sales were done under an exception in the government procurement guidelines which allows the government to avoid an open tender if the purchase amounts to “exceptionally advantageous conditions” for the government to acquire the asset.

The purchases were only made public when they were notified on Austender. Nearly $250m was spent this way by Joyce.

Labor did one direct negotiation in 2009 to buy Toorale station, south of Bourke, for $23m. The sale was criticised at the time as too costly. The station has since been turned into a national park.

Were the deals at arm’s length from the minister?

It depends what you mean by arm’s length.

The sales were undertaken by the department which is under control of the minister. There was no truly independent process, although the department sought advice from external valuers in each instance.

Joyce, as the responsible minister, was briefed and signed off on the various stages of the negotiations, including the final price.

The documents obtained by the Senate show that the negotiations were conducted with departmental officials. They do not show that Joyce attended negotiations or sent communications on the detail of the deal. But the documents obtained by the Senate are official ministerial briefing notes, correspondence with the sellers and valuations. They do not include internal departmental emails discussing the transactions or notes of phone calls.

First published at the Guardian Australia – Tuesday 23 April 2019.



Editors note: Mr Joyce’s statement that he maintained an ‘arms length’ from this ‘deal’ is interesting given this story published by the ABC in October 2015 which has just come to light again. See:

“There is not one thing that can go through Cabinet without the cabinet minister responsible having the say. I’m actually responsible for it if it goes wrong. Responsibility resides with me,” Mr Joyce said.

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