Public interest or political interest?

The Prime Minister has proposed taking over the responsibility for the management of the water resources of the Murray-Darling basin from the states.

The presumption that the Federal Government will manage things better than the states is one you would expect from the most centralist government in the history of federation which used the corporation power to centralise workplace relations, and has had ministers argue for uniform testing of year 12 students and for the takeover of public hospitals - traditional state responsibilities.

That said, the idea the basin should be a federal responsibility appears sound.

It is a living organism that crosses a number of state borders, with a number of different interests to be balanced - from the needs of the environment, to those of the irrigators in New South Wales and Victoria, to those of the people of Adelaide who need a secure supply of drinking water.

Because of this fact, it seems to make sense in the circumstances for the central government to have the political responsibility for managing the basin.

However, it will be interesting to see whether in 10 years time the idea that the federal government is a better water manager - simply because it is the federal government - is sustained.

When he addressed the National Press Club last week, the Prime Minister was fairly clear in his view that many of the problems with water management were because of state mismanagement and capital underinvestment - that the states simply haven’t done a good job.

As he said in his speech:

“The fact that today the Commonwealth has offered to assume responsibility for a problem created entirely on the watch of state governments around Australia, namely the over-allocation of water in the Murray-Darling Basin.”

So therefore, the Feds are promising to spend $10 billion on capital infrastructure over 10 years, on things such as encasing open water canals in pipe.

Because of vertical fiscal imbalance - the fact that the federal government collects the vast majority of taxes in Australia – it has the money available to invest in infrastructure the states don't have.

So it sounds pretty good.

However, when questioned at the Press Club, the PM agreed that subsequent governments may not allocate the promised funds. Mr Howard was also critical of state governments for not commencing some dam projects because of environmental concerns. So, it is presumed the Feds will plough ahead with dam proposals and damn the political torpedoes.

However, older readers may remember how the Feds stopped the Franklin Dam project in the 1980s - in the name of the environment. Some would say that it was a Labor Government. But it might be recalled the current government dumping ideas of selling its share of the Snowy Hydro, because of its iconic nature - and because of pressure from Alan Jones.

As the Sydney Morning Herald reported on June 2, 2006:

“The sale of the Snowy Hydro scheme is off after Prime Minister John Howard bowed to public opposition and said the federal government would not now sell its 13 per cent stake.

“That forced NSW and Victoria, who own 58 per cent and 29 per cent respectively, to then announce they too would pull out of the sale.

“NSW Premier Morris Iemma said Mr Howard had ‘pulled the rug’ out of the deal.

“While Victorian treasurer John Brumby said Sydney talkback host Alan Jones was behind the turnaround.

“‘Alan Alan Jones said it was a bad idea, so the prime minister thinks it's a bad idea,’ he said.”

The point of this is merely to note that the federal government is just as likely as any state government to act in its own political interests when it suits. A political entity will always act in a political manner.

Water management is simply the issue of the day. A government coming up to a tough election has acted politically to protect its own interests. If other public policy issues requiring the expenditure of big dollars come up, or the economy declines, the $10 billion over 10 years promised simply may not materialise.

And the idea that it will invariably act in an abstract public interest, rather than its political interest - like a grubby provincial government - is simply a matter of fantasy.

Before forever yielding control of water management - an issue the constitutional responsibility of the states, they should seek to implement the highest level of guarantee possible that the promises made by the Australian Government in its National Plan for Water Security are discharged.