PRIME Minister Kevin Rudd's mounting policy failures are costing regional Australians dearly, says PETER HUNT

Instead of stimulating long-term investment, Prime Minister Kevin Rudd's policies have either stifled the flow of money into regional Australia or worse, simply drained communities of their wealth.

Murray Darling Basin communities are being plundered of water, crucial investment in agricultural research and development is being cut and the Federal Government's disastrous manipulation of the renewable energy certificate market has forced wind farm developments to a standstill.

Just last week Federal Water Minister Penny Wong bragged about having already spent $1.27 billion buying 531,905 megalitres (cap equivalent) of MDB irrigators' water entitlements to revive the environment.

The Victorian Farmers Federation estimated that irrigated agriculture employs one person for every 95 megalitres used. That means Senator Wong is celebrating the loss of 5599 jobs.

Once Senator Wong spends the full $3.1 billion the government has allocated to buying irrigators' water entitlements, she will have wiped out 13,669 jobs in irrigated agriculture. That's before we even start talking about the flow-on effects to the rest of the community.

Even more frightening is the impact of further cuts to irrigators' entitlements to be made under the new MDB draft Sustainable Diversion Limits to be announced mid-year.

The tragedy for the MDB's 2.2 million people is Mr Rudd's failure to counter the loss of water and wealth from these regional economies with the promised roll-out of the government's $5.8 billion investment in irrigation infrastructure.

By June 30 this year the government will have spent less than 8 per cent of the $5.8 billion - a large chunk of which includes spending by the previous Howard Government on the Wimmera Mallee pipeline.

Yet the worst aspect of the $12.9 billion Water for the Future program is that all this water is being taken from irrigators without a list of what environmental assets the government wants to revive.

Details were meant to be outlined in a long-awaited environmental watering plan for the basin.

But neither Senator Wong or the MDB Authority have responded to demands for details on what assets and what volumes are needed to revive the basin.

Every Australian taxpayer should be worried that Mr Rudd's government is spending $12.9 billion of their money without first setting its environmental targets.

It seems the Government is more than willing to risk the economic viability, jobs and even lives of some Australians in its mad rush to implement its green policies.

The Government's home insulation scheme has cost four workers their lives and led to enormous wastage of public funds. Then there's the solar panel and hot water schemes.

These roof-top technologies have flooded the market with cheap renewable energy certificates (REC), forcing down REC prices from $50 a megawatt hour to about $30/MWh, during the past 12 months.

In its rush, the Government last year gave household solar panels five times their real worth in RECs and introduced a $1600 rebate on solar hot water systems.

Once these cheap and phantom credits flooded the REC market, prices collapsed making dozens of large scale wind, solar and wave power projects unviable, given they rely on selling their RECs to fund the projects. Pacific Hydro has put $2 billion of investment in wind farms on hold and AGL's Macarthur wind farm is on hold.

Portland wind tower manufacturer Keppel Prince Engineering has put 70 workers on forced leave and warns it will be forced to sack 120 workers if the federal Government doesn't resolve the REC market's failure.

The massive cost of these green projects has forced the Government to make cuts in other programs, some of which are crucial to agriculture.

The Government has axed Land and Water Australia, saving itself $19.3 million, cut and imposed savings measures on the Department of Agriculture Forestry and Fisheries, saving it $10 million a year, and cut the Rural Industries Research and Development Corporation funding by $3 million.

All this from a Federal Agriculture Minister, Tony Burke, who constantly harps on about Australia's role in maintaining global food security.

But the real risk to rural Australia's long-term viability is about to emerge in the form of cuts to the nation's research and development corporations.

Mr Burke has set the ball rolling with a Productivity Commission Review, which seems clearly aimed at cutting their government funding.

It seems Kevin Rudd and his team are pursuing their green dreams without any respect for the millions of regional Australians who will bear the losses for years to come.

  • Peter Hunt is a Weekly Times senior reporter