Under a centralising Federal Government

The intention of the major irrigators is to get enough licenses to ensure a minimum supply of water in times of shortage. They also plan to spread their holdings in order to increase the possibility of gaining access to commercial quantities of water. Any excess in year will be available for lease. The speculators hope to create a profitable market in water.

Buying licenses from smaller producers will make available cheap land to bigger producers which they can lease back to skilled but cash strapped smaller producers, buy the shareholder crop and by so doing not only reduce their own risk but ensure a return through the license.

For banks the acquisition of water licenses represents an investment against which they can borrow, lend and trade. Controlling water will confer power.

The head of treasury, Ken Henry, in my opinion is wrong in claiming that the market will regulate and conserve water through price. It will not. It will create winners and losers, cartels and monopolies, which will only work to the benefit of the big producers and the top end of town.

Such an arrangement would be feudal and one need look no further than Pakistan to see how it would operate and the extent to which equity would be lacking.

To cope with climate change centrally controlled infrastructure will need to be built. High energy costs will demand more efficient transport services, ports and roads.

Crisis, whether real or created, serves only to strengthen the hand of central government.