ANNABELLE HOMER: Well, pressure is being put on the South Australian Government to justify why so much Federal Government money was invested to increase the size of the desal plant. Federal Coalition spokesperson for the Murray-Darling Basin Simon Birmingham is calling for the Commonwealth Auditor-General to investigate this further. The Federal Government invested $228 million to the plant to expand it from 50 to 100 gigs per year to help reduce South Australia’s reliance on the River Murray so, overall, the Government committed about 338 [328] million towards the plant in total. Since this call from Simon Birmingham, the State Government yesterday released consultants’ reports to justify its move and basically stated that this expansion was based on predicting that South Australia’s population would grow to 2 million by 2027 and then we heard the details last month that the State Government said it probably wouldn’t happen, that the growth wouldn’t get to that point due to the decline in net overseas migration. … earlier today I caught up with Simon Birmingham and firstly asked him: why is he now bringing up the issue of Federal Government investment into South Australia’s desal plant?
SIMON BIRMINGHAM: Well, Annabelle, I’ve pursued this for quite some period of time actually so at the time that the State Government announced the doubling of the plant and the Federal Government came forward with $228 million on top of the 100 million that was already being provided I asked some questions back then as to what had gone on and whether in fact there was any business case or justification submitted or how it is the Federal Government came to settle on that quantum of money to support South Australia’s desal plant. Back then I didn’t get any…
ANNABELLE HOMER: Well, did you get any details back then? Oh, okay.
SIMON BIRMINGHAM: Back then I didn’t get any sensible answers so obviously when news came about of the mothballing of the desal plant and people then were quickly questioning whether in fact South Australia had seriously overbuilt and didn’t need to go from a 50 gigalitre plant to a 100 gigalitre plant I thought it was right to say ‘well, now there is some clear justification to say that perhaps this money was poorly spent, what work was done to see whether it was going to be wisely spent or not?’ and that’s, of course, what the job of the Auditor-General is – to look at it and to provide advice to government as to, if things have gone wrong, how they’ve gone wrong and how to rectify it in future.
ANNABELLE HOMER: Well, now the State Government has released the reports as to why the plant was expanded. Does this answer your questions now? Is there really a need to get the Auditor-General involved?
SIMON BIRMINGHAM: Well, it only answers some questions and of course there is still the issue of on what basis the Federal Government committed that particular sum of money, so $328 million of federal money went into that plant. At the time, federal ministers were saying it was to reduce South Australia’s take from the River Murray. Now, of course, it’s not reducing South Australia’s take from the River Murray – we’re not even now using the desal plant in SA, so…
ANNABELLE HOMER: But is it mainly during a drought? That’s what they’re referring to?
SIMON BIRMINGHAM: That’s right and during a drought presumably then that’s what they’ll use but during a drought is not a qualification that was put on it at the time the desal plant was built, nor at the time the money from the Federal Government was committed, so there is a clear basis here for the Auditor-General to look at what deals were done. It took, Annabelle, two years from the announcement of the $328 million in funding for a deal to be signed between the State and Federal Governments around the terms of that funding. That’s a remarkably long period of time, given the amount was announced before the deal was signed, so I think there are some very strange proceedings that occurred and that we really do need to get to the bottom of it.
ANNABELLE HOMER: So do you have an issue with the amount of money that’s been put on the table or that the expansion ever took place in the first place?
SIMON BIRMINGHAM: Well, my primary concern is the justification for the expansion and… but that is, of course, a matter for the State Government as to why it is they went ahead with doubling it and were, in fact, they spooked, basically, into doubling that plant because of the extreme drought that we were in when the justification for doing so now that it has been entirely mothballed for an indefinite period of time really does raise some questions as to whether it needed to be doubled but, at the federal level, obviously they didn’t make that decision. They simply helped to facilitate it by providing $328 million in taxpayers’ money – $100 million for the 50 gigalitre plant that pretty much everyone seems to agree was justified but then another $228 million for the doubling of it and…
ANNABELLE HOMER: But isn’t it better to be sure than sorry – have a larger plant than one that won’t meet the needs of the population in the future because, as we keep hearing, climate change modelling shows we’re expected to have more dry years than wet ones in the future, so is it better to have something that’s too big than not big enough?
SIMON BIRMINGHAM: Well, Annabelle, you have to, of course, also be prudent with taxpayers’ money in these processes. It’s easy to say ‘well, yes, we’d like all sorts of things’ and of course we need to ensure water security for the state but I think many people now look and think that the Government was unduly spooked at the time and that really, under some political pressure at that stage, a deal appeared to be cooked up between Mike Rann and Kevin Rudd to announce the doubling of this, to commit federal funding to it, with what seems to be very little justification at the time, particularly in terms of what analysis the Federal Government did aside from basically taking Mike Rann’s word for it.
ANNABELLE HOMER: Well, if we look at the other states, I mean, how much federal money went into the other desal plants, say, in Victoria, New South Wales and…
ANNABELLE HOMER: Well, how much, say, in Victoria?
SIMON BIRMINGHAM: Oh, look, Annabelle, I can’t tell you off the top of my head but nothing like the hundreds of millions of dollars that went into the South Australian one, if any, in fact.
ANNABELLE HOMER: Simon Birmingham, thank you very much for your time on Late Afternoons.
SIMON BIRMINGHAM: A pleasure, Annabelle.
ANNABELLE HOMER: That’s Simon Birmingham, Federal Liberal Senator for South Australia but he’s also the Federal Coalition spokesperson for the Murray-Darling Basin.