Agriculture department reviewing $13m overspend on water buyback

By Shannon Jenkins

March 17, 2021

Grant Hehir
Federal auditor-general Grant Hehir. (AAP Image/Lukas Coch)

National auditor-general Grant Hehir has asked the Department of Agriculture, Water and the Environment to review the material it used to influence its decision-making when it spent $80 million on a water buyback in 2017.

The then-Department of Agriculture and Water Resources reportedly paid almost $13 million more than what the water buyback was worth.

The Australian National Audit Office examined the purchase in an audit report last year, but was asked by Independent senator Rex Patrick to review the findings, prompting Hehir to contact the Agriculture department’s valuer.

According to the ABC, Hehir recently told Patrick that the valuer, Colliers International, has advised ANAO that it “does not consider the application of the premium referred to in their valuation report, to the range provided, as reasonable”.

In a speech to the senate on Tuesday, Patrick revealed that the valuation given by Colliers International to the Agriculture department was $1,500 per megalitre, with a valuation range of $1,100 to $2,300 per megalitre. However, the department paid $2,745 per megalitre for the entitlements.

In his letter to Patrick, Hehir said the Agriculture department has “undertaken to review the material available to them at the time which supported their price range methodology and the basis for relying on the two components of the valuer’s report”.

The department has advised the ANAO that “an alternative option may have been taken prior to the purchase if they had been aware of the valuer’s view at that time”, Hehir wrote.

Patrick told the senate that if a senior public servant at the department had “just made a 30c phone call to discuss the valuation report with the valuer, taxpayers would have an extra $13 million to spend on useful things”, describing the situation as “incompetence”.

READ MORE: Agriculture department had no plan to maximise value for money of Murray-Darling water purchases, audit finds

The government bought the entitlements from Eastern Australia Agriculture, of which federal energy minister Angus Taylor was a founding director.

Taylor has insisted that he cut ties to the company in 2012, and has had no financial interest in it since he entered parliament in 2013.

The department told the ABC that the material it had used at that time of the purchase supported its decision.

Patrick has called for the public servant who signed off on the deal to resign.

“We can’t have these sorts of mistakes just being brushed over, saying, ‘Oh, well.’ We can’t have officials thinking, ‘It doesn’t matter; it’s only taxpayers’ money’,” he told the senate.

“It does matter, and people serving in senior positions must be held accountable for their mistakes.”

The revelations have followed another ANAO report which found the Department of Infrastructure had paid $30 million for a 12-hectare land parcel near Western Sydney Airport in 2018, despite it subsequently being valued at just $3 million.

Environment and water shadow minister Terri Butler said Labor wants Prime Minister Scott Morrison to show leadership on the “integrity crisis engulfing his government” and explain the $13m overspend.

“Why did the government pay a massive premium for water rights?” she said in a statement.

“The revelations follow a series of government scandals, including the government’s airport land rorts and scandals plaguing Mr Taylor. We have had the Jam Land grassgate scandal, the dodgy documents scandal and now the water rorts scandal is rearing its head again. But the prime minister has consistently failed to act.”

READ MORE: Paul Fletcher said $30 million airport deal was ‘sensible’, inquiry hears


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