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Our Watergate sees water bought with taxpayer funds, filtered through a Cayman Island company owned by sitting politicians. Yet, our media has been reticent to cover it. Why?
It’s difficult to get a handle on a story that was pretty much under a self-imposed media blackout until about two days ago. If you’ve seen “Watergate” trending on Twitter recently, it’s not because people are all of a sudden interested in the Nixon scandal of the 1970s, but because of a water buyback scheme signed off on by former deputy PM Barnaby Joyce.
Before getting into the nitty gritty, it simply must be noted that the very name of this scandal is life imitating art in the form of a thirteen-year-old Mitchell & Webb sketch, which points out how naff the whole “adding ‘-gate’ onto the end of something to indicate a scandal” thing is, as well as noting that a scandal about water would also have to be dubbed “Watergate”, despite how confusing that would be. Also, Joyce referenced Nixon—sympathetically—in a tweet while swimming in the middle of his own Watergate, which is just too ridiculous to not mention.
Anyway, moving on.
First of all, it’s important to understand the Murray Darling Basin Plan (MDBP). The Murray Darling Basin is the “largest and most complex river system in Australia”, at least according to the government website dedicated to the plan. In 2012 the government decided that, due to the decline in the Basin’s health from droughts and increased human use, the Basin needed better taking care of, and thus the MDBP was born.
At its core, the MDBP sets out how much water is allowed to be removed from the Basin each year in order to keep the river system—and thus the surrounding environment—flowing and healthy. Due to it covering one seventh of the Australian continent and being a main source for agriculture, this was obviously an important goal, and the MDBP was a bipartisan agreement. There were some hiccups, like in February 2018 when it almost all fell apart due to the government wanting to introduce less water per year to the environment to the tune of 70 gigalitres, and Victoria and NSW would only agree to that if it meant jobs for irrigators.
Now, in 2017, the government arranged a $79 million water purchase from Eastern Agriculture Australia (EAA), a subsidiary of Eastern Australia Irrigation (EAI), which it was then going to redistribute for “greater sustainability”. It was a negotiated buyback (not open tender), and EAI is based in the Cayman Islands, known for being a tax haven in every punchline ever. Oh, and Angus Taylor was the co-founder and director of EAI before becoming Energy Minister, and EAA donated $55,000 to the Liberals before the 2013 election. So, because elements of that sound like part of the Enron story, the deal came under scrutiny.
It could be a case of “a story about a water buyback doesn’t get eyeballs.” Another issue could be that reporting on a severe governmental scandal at a time when the ABC needs more funding than ever was seen as a poor management decision, despite it being a poor journalistic decision to not do so.
It turns out, the water the government purchased—which was a deal signed off on by Barnaby Joyce, as mentioned above—was unusable, “overvalued” and “unlikely to have significant environmental benefits”, because it was “overflow water”, or water left behind after a flood. This water cannot legally be used outside the property where it resides, which is land in the Queensland town of St George, where Joyce once lived. Despite happening under the Turnbull government, Morrison has attempted to blame Labor for the buyback, which is of course ludicrous.
Both sides of the government engaged in non-open tender buybacks, including a $303 million dollar buyback in 2012, before the MDBP was formalised, and a $200 million buyback in 2017 under the Turnbull government. It should also be of note that it required actual research to remember who was PM in 2017, because Australia has seen so many in such a short time.
“But ‘Watergate’ highlights other forgotten issues of mismanagement in the Murray-Darling basin that date back several years,” Kishor Napier-Raman and Bernard Keane say in their article for Crikey.
“This controversy had its genesis, for instance, in the then-unregulated construction of levees in Balonne Shire in Queensland.”
Due to poor levee regulation and construction, water has been mismanaged and water movement distorted throughout the Basin. EAA’s properties, Kia Ora and Clyde, took advantage of the poor regulation and stored the aforementioned flood water, which resulted in serious damage to a property neighbouring Kia Ora. Although EAA have agreed to decommission their levees, there is no process for ensuring this is done. This also doesn’t stop the fact that the government gave $80 million to a company, co-founded by the Minister for Energy, for water they cannot use that was obtained through shady, though legal, means.
Now, for his part, Angus Taylor has released a statement that he had no “association…or financial interest” in EAA or EAI at the time of the buyback, and didn’t benefit from it. Not that that actually matters, because although he claims no knowledge of the buyback, the matter stands that a company he co-founded and once had interest in made a lot of money off a large government contract.
So, why are we only really hearing about this now? And why has somewhere like the ABC barely reported on it until its hand was essentially forced? Well, it could be a case of “a story about a water buyback doesn’t get eyeballs”, which is admittedly one problem. Another issue could be that reporting on a severe governmental scandal at a time when the ABC needs more funding than ever was seen as a poor management decision, despite it being a poor journalistic decision to not do so.
The problem, contends Bernard Keane, isn’t just how this deal was done. “The ‘watergate’ scandal around the purchase of water from a politically-connected tax exile isn’t atypical of Australian capitalism—it’s the model for much of Australian business.”
“So has the media (except @theprojecttv and @MichaelWestBiz ) just decided that giving $80mil away, without scrutiny, to a Cayman Islands entity built by a Federal MP totally ok?” Sam Dastyari tweeted over the long weekend. And one can’t help but feel he’s right, because there’s been little to no outrage in the media over this, despite the social media sphere being set alight by the scandal.
The Turnbull government bought something, to quote @MsVeruca, “Does. Not. Exist”. EAA gets to keep the water because it’s unusable, and they get to keep the $80 million. The environment gets nothing. We get nothing. This whole thing is a farce so ridiculous—and so bland in its complexity—that no one really realised how dumb it was until yesterday.
Joyce ended up getting angry and blowing up in a bizarre interview with the ABC’s Patricia Karvelas in which he called the scandal “a load of horse crap”, blaming Labor of doing similar things, except no, they didn’t. He even went so far as to abdicate all agency, saying he was “bound to the recommendations of his department”, calling everyone “fleas”, and denying any knowledge of Angus Taylor. It really is a wild thirty minutes.
There are now calls for a Royal Commission into this nonsense, specifically why the government would do business with EAA at all. But the problem, contends Bernard Keane for Crikey, isn’t just how this deal was done, it’s the business in general.
“The ‘watergate’ scandal around the purchase of water from a politically-connected tax exile isn’t atypical of Australian capitalism—it’s the model for much of Australian business,” he writes.
“A sweet deal with taxpayers’ money. An industry with poor regulation. Political connections. Political donations. Deals behind closed doors. Tax dodging. There’s nothing unusual or illegal about this. It’s certainly not corruption in any legal sense. In fact, this is the way much of Australian capitalism works.”
And that should depress you. The fact that our government regularly engages in shady deals which benefit those in power more than those they represent is a horrific indictment of our system; this is just the most recent example. Labor, for all its big talk, isn’t much better, and could use some radical transparency of its own while we’re digging up all the dirt on the Liberals.
The system needs to change before we’re all drowning, while someone counts their money in an offshore tax haven.