Budget must uphold funding needed to ensure Australia’s water security

In many Australian policy circles, nation-building is an archaic 1970s term—a throwback to a time when the federal government built infrastructure to encourage national prosperity. Today, cash-strapped federal, state, territory and local governments often have little choice but to adopt a just-in-time approach to capital infrastructure investment, but strains on budgets means that this looks increasingly like a whack-a-mole approach. The changing climatic, economic and national security risks Australia is facing are reason enough for governments to rethink their approach to nation-building and infrastructure, and to move beyond incrementalism.

Water security in northern Australia provides an excellent case study of why the way we think about nation-building must change.

Climate change, Covid-19 and the war in Ukraine have reinforced the importance of resilience in global food and energy supply chains. North Queensland is awash (pun intended) with opportunities for Australia to contribute solutions to these problems. Taking up these economic opportunities will promote socially and economically prosperous communities for generations to come.

Water security is the ultimate requirement for northern Australia to prosper—not only for agriculture and population growth but also for establishing new industries such as green hydrogen.

With the right water infrastructure, north Queensland can help the federal government deliver on the decarbonisation agenda. In green hydrogen production, around nine litres of water are needed for every kilogram of hydrogen.

Communities around Townsville are determined to catch and store the vast amounts of water falling yearly in the monsoonal season between December and April. This will capitalise on the region’s natural endowments—it has the nation’s best solar and wind resources, rich soil and solid rainfall.

Only around 1% of the annual rainfall in north Queensland is currently captured. With climate change, the region is set to receive the same amount of rain in a shorter period, making measures to manage the ebb and flow of concentrated periods of rain even more important.

Population pressures in the region are putting a strain on north Queensland’s water resources. In the 40 years since a dam was last built there, the region’s population has doubled, and growth is expected to continue over the coming decades. So, while north Queensland is far from the driest part of Australia, water security is becoming an impediment to both growth and long-term resilience.

The proposed Hells Gates Dam is located approximately 120 kilometres northwest of Charters Towers and 160 kilometres northwest of Townsville. It would store 2,100 gigalitres of water and open 60,000 hectares of agricultural land. It could provide a reliable and secure long-term water supply for irrigation, and high-value agricultural production for Charters Towers, Townsville and the surrounding regions. This project arguably has global significance since the water would fuel new industries like green hydrogen. North Queensland has the ingredients to lead the nation’s green energy and hydrogen revolution if water resources are secured.

Townsville Enterprise delivered a $24 million business case for the dam to the state and federal governments earlier this year. It shows that Hells Gates Dam will build the kind of infrastructure that provides jobs and positive economic returns.

That case stated that the dam has the potential to generate a $6 billion increase in gross regional product, or GRP, from agriculture projects. The water security it will provide will positively impact the supply chain, from the farm gate to export terminals in Townsville and beyond.

The federal government recently put the project on hold for 12 months, while committing to review the funding allocated to it. It is critical that the $7 billion of funding allocated to Hells Gates Dam is maintained in tonight’s budget. The previous government fully funded the dam in the last budget, subject to a business case that has now been delivered.

Current approaches to this kind of infrastructure focus on just-in-time investments. However, this slow-burn planning fails to promote growth and inhibits investment. Projects like the Snowy Mountains and Ord River schemes show what can be achieved with water when we build infrastructure focused on the future well before it is needed.

Interestingly, the Hells Gates Dam project is community driven. The idea was put forward and championed by the community to drive local economic development. Nothing focuses a northern community more than the thought of running out of water.

Australians are starting to accept that hard economic choices are needed—and that, before making those choices, the government must move away from spreading funding like economic fairy dust. It must focus on developing a strategic approach to regional development.

The federal government must reconsider how it will use future-focused infrastructure investment to promote national resilience and economic security. The science is clear that Australia will face increasingly more frequent and intense weather events. While three years of La Niña events in a row has seen the east coast struggle with too much water, that will not be the case forever. Water and water security are critical to our nation’s economic and social prosperity, and more future-focused thinking is needed.