Media Releases

John Brumby’s failure to undertake a proper economic analysis of the Food Bowl Modernisation Project has drawn scathing criticism from the country’s top water experts and economists.
Shadow Minister for Country Water Resources and Deputy Leader of The Nationals Peter Walsh said the Food Bowl Modernisation Project should have been evaluated and designed to benefit northern Victorian food producers instead of Melbourne.
“Experts say the Brumby Government’s plan was based on ‘spurious’ claims, is a ‘scandalous waste of billions of dollars’ and are calling the Food Bowl Modernisation Project ‘the northern dog’,” Mr Walsh said.
“They have backed the Auditor-General’s finding that there was a ‘lack of rigour’ in estimating costs, benefits and risks.
“John Brumby rushed this project though without a proper economic analysis because after failing to plan for Melbourne’s water needs he thought water savings were a quick fix.”
Mr Walsh said the criticisms made in The Sunday Age backed the Coalition’s belief that the government had dramatically over estimated the water savings available through the project.
The Coalition’s analysis of the business case for Stage 1 of the Food Bowl Modernisation Project also showed the government grossly exaggerated the economic benefits of the Food Bowl Modernisation Project.
“The government employed consultants to undertake an assessment of the economic impacts of the project, but skewed the figures in its business case by counting the benefits twice,” Mr Walsh said.
“The business case estimates the economic benefits of the project to be about $1005 million, but the true figure is $381 million.
“It is also clear that the document was written after the project and the north-south pipeline were already underway and figures and tables were changed after it was first compiled.
“There are numerous references in the business case to progress made after the project was announced in June 2007.
“One table detailing the overview of the program’s schedule and the government’s expectations of water savings was changed in May 2009.”
Mr Walsh said the Coalition had always supported the concept of upgrading irrigation infrastructure but John Brumby was spending billions of taxpayers’ dollars with no clear idea of its benefits, costs or risks.

What the experts said about the Brumby Government’s water plan:
“The government’s claim that it is creating ‘new’ water is spurious in the extreme. When water is purportedly ‘lost’ in the irrigation district, it does not go to Mars. It is not lost at all, it has just gone somewhere else.”
Prof. Lin Crase, La Trobe University

“The business case just does not provide the information to make a proper evaluation. We have to accept the benefits and costs of the project on trust.”
Prof. Quentin Grafton, director of ANUs’s Centre for Water Economics, Environment and Policy

“The amount that is being paid by the taxpayer to get water for Melbourne is very high and in that sense this does not stack up.”
Prof. John Quiggin, University of Queensland economist

“When the desalination plant becomes operational, there will be zero economic gains from the Sugarloaf pipeline.”
Dr Glyn Wittwer, Director of Melbourne and Monash universities’ Uniwater initiative.

“The benefits to the environment would need to be seriously questioned. Some of the water that was ‘leaking’ was actually returning to the system and ending up further down the river. As for the cost-benefit analysis, the results are very suspicious.”
Prof. Donna Brennan, economist, ANU visiting fellow.

‘I’ve looked at the veracity of the Food Bowl Project’s claims to achieve real water savings … and I can’t see that there will be any significant real savings.’
Oliver Gyles, irrigator, worked as a senior economist with the Victorian government for 14 years.

Business case references to dates after the Food Bowl Modernisation Project was announced:
‘In order to achieve water savings in the 2008-09 year, expenditure of approximately $113 million was committed towards Early Works which was undertaken during Winter 2008. p.30
‘Key stakeholders were provided with an overview of the Steering Committee recommendations in late September 2007.’ p.112
‘Submissions on the Draft Report were received up until 23 October 2007’ p112
‘NVIRP submitted on 30 April 2009 its inaugural Corporate Plan, for consideration of the Minister for Water and the Treasurer.’ p.166
‘This section outlines the key next steps for NVIRP in preparation for commencing the 2009 program’ p.168