A report we produced in 2022 has been unjustly discredited recently in regard to the Murray-Darling Basin Plan and Water Amendment (Restoring Our Rivers) Bill 2023. Below we clarify the report’s use and findings and discuss the concerns of parties opposing the report. To read the full report, please download it below.
The “Social and economic impacts of Basin Plan water recovery in Victoria 2022” report was produced for the Victorian State Government in 2022. We analysed the social and economic issues associated with water recovery for the environment in Victoria, under the Murray Darling Basin Plan. Our report provided a valuable evidence base to support robust decision-making on Basin Plan issues.
Our scope was to build on and update the analysis undertaken for our 2017 socio-economic assessment report. The report explains the impacts being felt by communities in Northern Victoria in the 2022 context of water recovery for the environment under the Basin Plan.
Future impacts of the Basin Plan
One (of the thirteen) chapters considers the possible future impacts of the Basin Plan. The intent of this analysis was not to undertake detailed economic modelling to estimate the impact of further buybacks. Rather, we provide an indication of what is ‘at risk’ — in terms of the value of economic production and employment that is currently supported by the volumes of entitlements that could be recovered if the Commonwealth use buybacks to complete Basin Plan targets, for example the additional 450 GL.
The report does not advocate for, or against, buybacks or alternative forms of water recovery.
It documents the financial costs and socio-economic issues around each water recovery approach. It does seek to put into context the socio-economic value of water for agriculture with the aim of making government cognisant of the consequences removing this water through buybacks could have, so this can be considered when making decisions about water recovery and the support that would be needed to mitigate these impacts.
Produced with updated available data
Our report also brought significant new information to light, securing data from the Department of Climate Change, Energy, the Environment and Water (DCCEEW) regarding the type of infrastructure recovery (separating out on-farm and off-farm) that had previously not been released.
Our work also secured data from the Commonwealth Environmental Water Holder (CEWH) regarding their holdings and behaviour that had not been previously made available.
Academic judgement on the water report
We note that the Murray-Darling Basin Authority (MDBA) commissioned a team from the University of Adelaide to conduct a literature review of 106 economic Murray-Darling Basin studies that are assessed and rated on a measure of ‘quality’ adapted from medical literature. This approach to assessment is not fit-for-purpose, for the range of studies considered.
Of the 65 studies that were deemed to relate to the influences of water recovery programs on economic outcomes (this report being one of them), 18 of the 28 applied studies are rated low-quality, with 10 of the 11 studies using descriptive statistics being rated low-quality. In fact, the review raises concerns with all the significant reviews in the area.
The University of Adelaide reports that “The bulk of the large-scale reviews to date (e.g., EBC et al., 2011 [appointed by MDBA to consider community impact]; RMCG, 2016; Sefton et al., 2020 [which was an independent panel appointed DCCEEW]; Productivity Commission, 2018; Wentworth Group of Concerned Scientists, 2017; KPMG, 2016; 2018; TC&A & Frontier Economics, 2017; Frontier Economics & TC&A, 2022) have not managed to identify a causal relationship between water recovery and economic outcomes.”
Furthermore, of the studies considered by the University of Adelaide team, many are not contemporary — suggesting that MDBA and DCCEEW need more evidence to support current policymaking.
At Frontier Economics, we peer-review every report with a robust methodology built over our 25 years of economic consulting experience. Academic standard-peer reviews are not practical or common-practice in real-world industry cases, and using this basis to question the quality is, in our opinion, incorrectly measured.
We invite any enquiries on this matter via contact@frontier-economics.com.au
