Australia’s ‘watergate’: here’s what taxpayers need to know about water buybacks

 

Australia’s ‘watergate’: here’s what taxpayers need to know about water buybacks

In 2017, the then agriculture minister, Barnaby Joyce, signed off on an A$80 million purchase of a water entitlement from a company called Eastern Australia Agriculture.

The problem is that Energy Minister Angus Taylor used to be a director of Eastern Australia Agriculture – though he didn’t have a financial interest – and the company is a liberal party donor. What’s more, the value of the water purchased for A$80 million is under question.

Now, as the election looms, this issue has resurfaced. But why should taxpayers be concerned?

Water buybacks using an open tender were halted by the current government in 2015, even though this is the most cost-effective way to set aside water for the environment. Instead, the government pronounced that subsidies for irrigators were a better deal.

Until 2015, the government bought back most water using an open tender process, before it was replaced by a subsidy scheme for irrigation and occasional closed tenders.

The problem with the closed tender process is that it tends to lack transparency, which raises questions about how effectively the government is spending public money. And it’s hard to prove closed tenders deliver the most cost effective outcome.

The Murray-Darling Basin is a very productive agricultural zone and its rivers have been used to boost agricultural outputs through irrigation.

State governments spent much of the 20th century allocating this water to agricultural users. By the 1990s it was clear too much water was being extracted. This resulted in both harm to the river environment and potential reduced reliability for those with existing water rights.

Various attempts to rein in extractions were made around this time, but ultimately the Murray-Darling Basin Plan was adopted to deal with the problem.

In agreeing on the plan, the federal government committed to spending A$13 billion to reduce the amount of water being extracted from the Murray-Darling Basin. To accomplish this the government has two basic strategies.

One involves buying up existing rights for water use. The other hinges on using subsidies so farmers use less water when irrigating.

Reducing water extraction from the basin

The second approach of using subsidies is generally more politically appealing. This is because few farmers ever object to receiving a subsidy and the public has an affinity with the idea of “saving” water.

The problem, however, is that subsidies are a more costly way of returning water to the river system than simply buying back existing water rights. And so-called water savings are hard to measure how much water savings are a result of subsidies or some other factor.

This is why some analysts even claim subsidies are reducing the level of water available for the environment.

Buying back water rights is generally more cost-effective than providing subsidies. But a clear and transparant process still matters because water rights are not the same for everyone and it’s a complex process to determine their overall value.

Allocations and entitlements

First, most water users hold a legal right, known as an entitlement. Water entitlements represent the long-term amount of water that can be taken and used – subject to rain, of course.

Second, water allocations represent the amount of water currently available against a given entitlement – this is the water that is available now.

If a farmer owns an entitlement in the River Murray, chances are the annual allocation will be determined by how much water has flowed into upstream storages like Hume Dam, Dartmouth Dam or Lake Eildon.

Even then the allocation will vary, depending on which state issued the original entitlement. For instance, New South Wales water is generally allocated more aggressively. This means NSW entitlements tend to be less reliable in dry years than Victorian or South Australian entitlements.

If a farmer owns an entitlement where there are no upstream storages, as is the case with much of the Darling River system, then the allocation will vary depending on how much water is flowing in the river.

So what?

All of this means the amount of water that can actually be used for the environment when an entitlement passes to the government will depend heavily on the underlying characteristics of the water right.

Partly for this reason, water buybacks were historically conducted using an open tender process.

This meant the government would announce its willingness to buy water entitlements. Farmers would then notify the government about what entitlements they held and the price they were prepared to take.

Running an open tender allowed the government to assess the value for money of the different entitlements on offer at the time.

Water buybacks through open tender began seriously in about 2007 to 2008. This meant the price owners were prepared to sell for would be registered, and then the government would determine which offer provided the best value. Around 60% of all water now held for the environment by the Commonwealth was secured through open tenders.

As a general rule, a relatively high-reliability water entitlement was bought for about $2,000 per megalitre and this has become the metric for many in the market. But the current government halted this process in 2015.

Now, the government buys water through direct negotiation with water-entitlement holders.

The government justified ending open-tender buybacks on the basis that the water being secured was causing undue harm to rural and regional communities. And, instead, much more expensive subsidies would supposedly generate a better overall return.

This view is not universally shared. The receipts from openly tendered water entitlements were being used by many farmers to adjust their business, while still staying in the region.

Many rural communities continue to thrive, regardless of the strategy chosen to secure water for the environment. Subsidies also tend to favour particular irrigators rather than the community in general.

Having set aside the cheapest option of open-tender buybacks and declaring support for irrigation subsidies, the problem the government now faces is that it must explain why closed tenders persisted (albeit in isolated cases) and were signed off by Ministers as good value for money.

Closed tenders need not deliver a poor outcome for taxpayers. But it does mean the likelihood of establishing the best value for money is reduced, simply because there are fewer reference points.

And if it’s legitimate to overspend public money on irrigation infrastructure subsidies, the credibility of a supposedly cost-effective closed tender is also brought into question.

Economics and Head of School, University of South Australia

Disclosure statement

Professor Lin Crase is the South Australian branch president of the Australasian Agriculture and Resource Economics Society.

Partners

University of South Australia provides funding as a member of The Conversation AU.

http://theconversation.com/australias-watergate-heres-what-taxpayers-need-to-know-about-water-buybacks-115838

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Quarterly rents have increased across all capital cities, bar Sydney and Darwin.

Brisbane rents are starting to climb again, with Brisbane now having a median weekly rent of $436. This is an increase of 0.8 per cent over the past quarter, and 1.4 per cent over the past 12 months.

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At a glance:

  • CoreLogic has released its first Quarterly Rental Review for 2019, showing rents have risen by 1 per cent during the first three months of this year.
  • Sydney is the most expensive capital city to rent with a median weekly rent of $582 per week, while Perth is the cheapest at $385.
  • Quarterly rents have increased across all capital cities, bar Darwin and Sydney.

The first CoreLogic Quarterly Rental Review for 2019, which tracks median rents and rental yields across Australia, shows that national weekly rents have risen by 1 per cent during the first three months of the year.

“This seasonally strong first quarter has delivered the highest increase in weekly rents since the corresponding first quarter a year ago”, says Cameron Kusher, Research Analyst for CoreLogic. “Our regional housing markets are performing marginally better than the capital cities, many of which have been experiencing weaker rental…

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DON ‘ T COMPLIATE YOUR LIFE

Problem 01.

When NASA started with the launch of astronauts into space, they discovered that the pens would not work without gravity (or zero gravity), as the ink would not go down to the surface on which it was
I wish to write.

Solution A) Solving this problem, it took them 6 years and 12 million dollars. They developed a working pen: under zero gravity, backwards, underwater, practically any surface including glass and in a range of temperatures ranging from below the freezing point to over 300 grC

Solution B) And what did the Russians do? The Russians used a pencil!

Problem 02.

One of the most memorable case studies of Japanese management was the case of the empty soap box, which occurred at one of the largest product companies in Japan. The company received the complaint
from a consumer who bought a box of soap and was empty.
Authorities immediately isolated the problem of the assembly chain, which transported all the boxes packed of soap, to the delivery department. For some reason, a box of soap went empty down the assembly chain.. High officials asked their
Engineers who will find a good and quick solution to the problem.

Solution A) Immediately, engineers jumped into their work to devise an X-ray machine with high resolution monitors handled by two people and thus monitor all the soap boxes that went through the line to make sure they weren’t empty. They definitely worked hard and fast.

Solution B) When a common employee in a small business was posed the same problem, he did not enter into complications of X-rays, robots, computer equipment or complicated; instead he posed
Another solution: He bought a powerful industrial fan and pointed it toward the assembly chain.
He lit the fan, and while each box went through the fan, the empty ones just flew out of the production line.

Problem 03.

A hotel tycoon traveled to a Hindu city for the second time a year away from his first trip, as he reached the counter of a hotel lower in stars than his chain, the employee smiled at him and greeted him saying:
Welcome back sir, good to see you back in our hotel; surprised in a great way because despite being such an important person, he liked anonymity and hardly the employee would have such a good memory to know that he was there a year before, wanted to impose the same system on your hotel chain as that simple gesture made you feel very good. Upon his return he immediately put his employees to work on this issue to find a solution to his request.

Solution A) The solution was to find the best software with
face recognition, database, special cameras, response time in micro seconds, employee training, etc. etc.
At a cost of approximately $ 2.5 million.

Solution B) The tycoon preferred to travel again and bribe the hotel employee to reveal the technology they applied to him.
The employee did not accept any bribe, but humbly commented to the tycoon as they did, he said, ′′ Look sir, we have an arrangement with the taxi drivers who brought him here, they ask him if he has already stayed at the hotel to which he was they are bringing, and if it is
affirmative, then when he leaves his baggage here on the counter, he makes us a sign, and so he makes a dollar “.

Moral: Don’t get complicated! Conceive the simplest solution to PROBLEM. Learn to focus on SOLUTIONS and not, the PROBLEMS.

I loved this message, it’s the ones I’ll read more than once..

Always positive!, Never negative!

The son who often doesn’t clean his room and spends it watching TV means that…
He’s home!

The mess I have to clean up after a party means…
We were surrounded by family or friends!

Clothes that are tight, mean that…
I have more than enough to eat!

The job I have on cleaning the house means…
I have a house!

I can’t find parking, it means…
I have a car!

The noises of the city mean that…
I can hear!

The tiredness at the end of the day means that…
I can work!

The alarm clock I hear every morning means…
I’m alive!

Finally because of the messages I receive, it means…
I have friends thinking about me!

WHEN YOU THINK LIFE IS GOING WRONG…
READ THIS MESSAGE AGAIN

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Rental stock 23-6-20

Rental stock 23-6-20

https://ljgillandrealestate.wordpress.com/2020/06/23/rental-stock-23-6-20/
— Read on ljgillandrealestate.wordpress.com/2020/06/23/rental-stock-23-6-20/

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https://www.rta.qld.gov.au/news/2020/06/06/rta-responds-covid-19-dispute-resolution-data-article

https://www.rta.qld.gov.au/news/2020/06/06/rta-responds-covid-19-dispute-resolution-data-article

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Stamp duty plan required to boost confidence

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In the race to reach the post-COVID-19 recovery stage as quickly as possible, the necessity is to bring confidence back, writes Mathew Tiller.

However, at a time when everyone is hanging on announcements, commitments and timelines from politicians and regulatory officials, it’s important that the communication is clear, transparent and detailed in order to boost confidence. Recent discussions surrounding changes to stamp duty have not been one such communication.

Over recent weeks, the federal Treasurer, RBA governor and NSW Treasurer have all discussed the need to overhaul the tax system and singled out stamp duty as the tax most in their sight. As evident by the course of supportive voices, for more than a decade, everyone agrees that stamp duty is a highly inefficient tax which needs abolishing. However, while the sentiment in the most recent discussions is positive, the lack of detail has had the opposite effect and led…

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Which rental properties will be most affected by COVID-19? & FREQUENTLY ASKED TAX QUESTIONS FOR RENTAL PROPERTIES AFFECTED BY COVID-19

https://ljgillandrealestate.wordpress.com/2020/05/16/which-rental-properties-will-be-most-affected-by-covid-19-frequently-asked-tax-questions-for-rental-properties-affected-by-covid-19/

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The number of new rentals coming onto the market has soared, with almost 20% more available nationally, according to Domain.

“The blowout in rental vacancy rates for the major CBDs suggests a mass exodus of tenants occurred over the course of March and April. This might be attributed to the significant loss in employment in our CBDs plus the drop off in international students,” he said.

Brisbane and Adelaide both saw their CBD vacancy rate double as well, albeit from smaller bases, jumping to 11.3% and 6.6% apiece.

Looking at the capital city markets as a whole, Darwin proved the only exception to rising rates across the board.

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Queensland

In the sunshine state, rents are more likely to have sunk in those places most dependent on tourism.

There are 55% more listings in Cairns, 38% more in the Whitsundays and 14% in Hervey Bay. It could prove a bittersweet win for local residents however as their local economies are left reeling from the sudden disappearance of the tourist industry.

Meanwhile, there are around 300 more rental options on the Gold Coast, about 250 more on the Sunshine Coast, and 120 more in Brisbane’s inner south.

In Queensland, holiday areas have seen the bulk of new listings.
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Best Regards

Linda 姬琳达珍 and Carlos Debello (LREA)

LJ Gilland Real Estate Pty Ltd

Debello LREA推荐书LJ Gilland房地产
http://ljgrealestate.com.au/testimonials/

Request FREE Rental Appraisal here!

“Your Local Property Management &…

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A win for the real estate industry! The proposed COVID-19 rental reforms amended

https://ljgillandrealestate.wordpress.com/2020/04/23/a-win-for-the-real-estate-industry-the-proposed-covid-19-rental-reforms-amended/

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RE: Urgent Review of Special COVID-19 Residential Property Protections

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Originally posted on ljgrealestate:
Subject: RE: Urgent Review of Special COVID-19 Residential Property Protections ? Dear Valued Friends/Property-Investor Clients and Landlords ? We appreciate that many of you have acted on the below already and apologise for the frequency and…

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PROPERTY INVESTORS – IN YOUR BEST INTERESTS RE COVID-19 PLEASE READ AND TAKE ACTION

As property owners, you are entitled to be supported by special regulatory protections during the COVID-19 pandemic. The Government’s proposed protections ignore our collective rights, take away our ability to derive critical income and take away control over an asset we have worked so hard to acquire. We strongly urge the Government to reconsider these damaging amendments, in favor of protections that offer a better balance of security and stability to property owners and tenants alike.

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Dear Valued Client/Landlord/ Property Investors and friends,

Good afternoon. 😊

As property owners, you are entitled to be supported by special regulatory protections during the COVID-19 pandemic. The Government’s proposed protections ignore our collective rights, take away our ability to derive critical income and take away control over an asset we have worked so hard to acquire. We strongly urge the Government to reconsider these damaging amendments, in favor of protections that offer a better balance of security and stability to property owners and tenants alike.

We have below two REIQ templates as well below a concise letter for you, as a valued client/property-investor and friend of LJ Gilland Real Estate to choose which format you are comfortable with, and email to the Government representative of your valuable investment property.

We strongly believe that it is in your best interest to take action immediately to request urgent intervention in this…

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http://ljgrealestate.com.au/property/18-evergreen-street-ormiston-qld-4160/

18 Evergreen St, Ormiston QLD 4160

CHARMING AIR CONDITIONED 4 BRM HOME ON LARGE 752 SQM BLOCK – ROOM FOR YOUR BOAT OR POOL!

18 Evergreen Street, Ormiston QLD 4160

FOR SALE $580,000

Lovely street appeal and on a big 752 sqm block. You can’t get better than this: only a short stroll to Ormiston College. Close to nearby amenities such as Ormiston train station, the bustling Cleveland CBD, parks, bikeways, shops, restaurants, cafes and other sporting grounds.

Situated in an exclusive estate called Ormiston College Gardens sitting on a 752m2 block with wide side access suitable for a boat or caravan and ample room for a pool.

18 Evergreen Street, ORMISTON QLD 4160 – LJ Gilland Real EstateLJ Gilland Real Estate

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