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WATER PURCHASING FIASCO

16 July 2020

 

Senator Patrick and Rebekha Sharkie MP have expressed serious concerns about the Government’s handling of Murray-Darling Basin strategic water purchases and have called for a significant shake-up in Commonwealth water management.

"This audit report shows failures at every point in the water procurement process which in turn demonstrated a failure by the Department to meet basic standards of public administration," said Senator Patrick. "It reveals a Department unfit to run the program and a complete lack of supervision and care by past ministers in relation to governance and accountability."

The report reveals flaws at every stage of the procurement process:

  • The use of a “triple bottom line” criteria in the procurements - a criteria which the SA Murray-Darling Basin Royal Commissioner viewed as inconsistent with the Water Act.
  • Failure to develop a framework designed to maximise value for money.
  • Failure to consistently follow policy.
  • Embarking on limited tenders without properly establishing whether the limited tender criteria in the Commonwealth Procurement Rules had been met.
  • Failure in properly briefing ministers on whether the proposed purchases would meet achieve the intended outcome.
  • Failure in some circumstances to follow the direction of the minister.
  • Failing to negotiate on price in all but one of the eight purchases from 2016 to 2017.
  • Failure to do basic due diligence, including doing due diligence in one instance 5 weeks after the purchase.

"I was particularly surprised by the Department’s response to the Auditor's report which seemed oblivious to the serious criticisms identified. The Department’s response is limited to accepting recommendations in circumstances where both apologies and dismissals were required," said Senator Patrick.

"I am concerned that all of this took place under the watch of two National Party ministers that seemed to have no regard to properly executing their responsibilities. They seemed to have been content to let the Department run ragged underneath them," said Senator Patrick. "So long as the Nationals were receiving praise out on the hustings, it didn’t seem to matter what suffering was being inflicted upon non-irrigation river stakeholders and the taxpayer in general. It's time for the PM to remove this portfolio from the control of the Nationals."

Senator Patrick noted that the report did not go to many of the issues that had been raised in public reporting prior to the commencement of the audit. Going into the audit there were questions as to whether there was real benefit in making the purchases (was it real water or ‘goanna water’), whether certain ‘big end of town’ players received preferential treatment, whether taxpayers had contributed to a tax haven profit stripping scheme and whether there were ministerial conflicts of interest.

"None of these questions have been answered. I accept that these issue are outside the scope of a standard ANAO report. It may fall back to a Parliament, informed by the audit, to deal with these most serious issues. I will be asking the Joint Committee of Public Accounts and Auditing to hold hearings into this audit report to permit further lines of inquiry, but I suspect the only way to really deal with all of these issues is to have a Federal Royal Commission."

Rebekha Sharkie, Federal Member for Mayo, also expressed concerns about the audit's findings.

"We’ve spent billions of dollars on water buybacks and now we learn that the process was seriously flawed when it came to making sure we secured value for money. The Australian people need to have confidence that taxpayer funds are being spent efficiently. They lose confidence in the Murray-Darling Basin Plan when these practices come to light.”