Matters of Urgency — Water

Sue Lines

The Senate will now consider the proposal, under standing order 75, from Senator McKim, which is also shown at item 13 of today's Order of Business:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Commonwealth Government to urgently intervene against any proposed plans to privatise Australian water supply, including the potential sale of Melbourne Water by the Victorian Labor government.

Is consideration of the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.

Larissa Waters

At the request of Senator McKim, I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the Commonwealth Government to urgently intervene against any proposed plans to privatise Australian water supply, including the potential sale of Melbourne Water by the Victorian Labor government.

In the 1980s, Labor commenced one of the largest privatisation programs in the world and, since then, Australia has been systematically privatising almost every essential service that we've got. In the ensuing decades, Labor and the Liberals, state and federal, sold off nearly $250 billion in public assets. Every sell-off led to job cuts, higher prices for all of us and profits for the big corporations created by the government. The states sold off the electricity companies, and the price of our household bills went up. The government decided to hand the reins to the housing crisis over to property developers and private investors and stopped building public housing. Now the waiting list for public housing is almost 200,000 families long and tents are popping up in parks across the country as people are priced out of rentals.

Next on Labor's hit list appears to be Melbourne Water. In August this year, secret cabinet documents revealed the Victorian Labor Party has spent five years secretly examining the privatisation of Melbourne Water under a project codenamed Project Nerva, with then premier Jacinta Allan and senior ministers approving a 12-month business case in 2024 to bring private investors into water infrastructure worth almost $18 billion. The current Victorian Premier, Ben Carroll, also argued in favour of the plan. Melbourne Water isn't just about what comes out of Victorians' taps. It manages major catchments, reservoirs, water treatment infrastructure, waterways, stormwater and flood management right across Melbourne. Without water, we're cooked. This is not something that you hand to the highest bidder.

Victoria has a long history of selling or leasing public assets. The Port of Melbourne was leased for $9.7 billion. The VicRoads registration business was sold for around $7.9 billion. The land titles registry was sold for around $2.9 billion. Australia, as a nation, has an even longer one—Telstra, CommBank and Qantas. We have seen this film before. Every time an essential service gets privatised, people quite literally pay for it. The price goes up and the quality of service goes down.

In 1989, England and Wales became the only countries to fully privatise their water supply and sewerage, with the goal of attracting private capital that the government itself couldn't borrow. Decades later, the sector is widely seen as a cautionary tale due to steep price rises, infrastructure degradation and indebted private owners refusing to do the work to fix the infrastructure. Water bills are out of control, rising 36 per cent on average in recent years. But it is sewage spills that have become the most visible failure. Thames Water alone saw a 34 per cent year-on-year increase in serious pollution incidents. One local council reported 27,400 hours of raw sewage discharged into its rivers in a single year, a 25 per cent rise on the year before. Well done, Maggie Thatcher! There is now an active UK campaign to renationalise their water.

Privatisation has failed, and it is a failure that is shared by both of the major parties. Airports, ports, electricity, telecommunications, banks, toll roads—Labor and the Liberals have been selling off everything that isn't nailed down, and every time we've all ended up paying more for less. That's what we mean when we say that the major parties are selling you out for corporate profit. It's not a slogan. It is who they are working for. Here's the part that should really worry you. At the same time they're quietly planning to sell off our water, they're waving through AI data centres across our major cities that will guzzle enormous amounts of water and electricity. What do you think that does to your water or electricity bill? No wonder people are fed up. The major parties aren't running this system for you. They're running it for big corporations and billionaires. While One Nation points the finger at migrants, they take the money from exactly the same corporations and billionaires. Public services like water should stay in public hands and run for people, not for profit. We call on the federal government to commit to intervene against any proposal to privatise our water supply.

Michelle Ananda-Rajah

The ownership of water assets and water infrastructure is a matter for the states and territories. They own them, they run them and they are accountable for them. This is a feature of our federation. There is a constitutional firewall here. So I'm deeply suspicious when a senator from Tasmania raises questions about Victorian matters. The Carroll government has been explicit. There is no intention, none whatsoever, by the Carroll government to sell off Melbourne Water. However, the issue of water usage is highly topical right now. It is highly topical within the context of data centres. As you know, data centres are surging; interest in them is surging. Australia is in the midst of a data centre gold rush. We have about 165 data centres. We are projected to have 225 in the near future. Indeed, this is how many are in the pipeline right now. That equates to about $150 billion in investment by 2030. While interest in data centres is increasing from industry, this has also been associated with rising community backlash. Australians are deeply sceptical of data centres despite using this enabling infrastructure. They use too much power and too much water, and there's not enough community benefit.

In terms of usage, you might have looked at your online statement this morning. You might have looked up your medical results. You might have purchased something online. You might have done a bit of research. All those daily activities that we take for granted require the enabling infrastructure that's provided by data centres. In fact, the closer they are to cities, where large populations live, the faster you get your results. The latency is smaller. One in five Australians now pay for an AI subscription. We are amongst the highest users of AI in the world. One in three Australian businesses also pay for some type of AI. This technology, this capability, is now embedded within Australian society. We are using AI all the time, and that AI is supported by the foundational infrastructure that is data centres.

However, the Albanese government is well aware that data centres must earn and maintain their social licence. In March of this year we released a statement of expectations which clearly lays out what we believe are the rules of the road. If you want to come and build a data centre in Australia, then you need to play by the rules, and they're very clear. There are five expectations. The first expectation is that we want to ensure that Australia's national interest is prioritised. The second expectation is that we want to ensure that data centres support Australia's energy transition. They need to bring in their own energy rather than drain our energy and push up power prices. They must also provide for grid stability. The third expectation is that we want to see sustainable and efficient water usage. I'll come back to that. The fourth expectation is that we want to see a pull-through of investment in Australian jobs and skills. The final expectation, which is probably one of the most important expectations, is that we want to see data centres support our R&D, innovation, entrepreneurship and small businesses in this country. That is how we then grow a secondary and tertiary capability in this country.

On the topic of water usage—because that's salient to this discussion—right now in New South Wales data centres use around one per cent of water. In the next 10 years, this is projected to increase to 25 per cent of Sydney's water. That's a huge uptick, but we have said that we want to see water being used responsibly. We need data centre operators to work proactively with local communities and with water utility companies to use efficient cooling techniques and to use, where possible, recycled water rather than drinking water. This is not science fiction. It has actually been played out. AWS is currently building a data centre in Melbourne's west, and this data centre will be supplied by recycled water provided by Melton recycled water. So it can be done—we know it can be done and there is a proof of concept right here in Melbourne. In addition to that, we want to ensure that capabilities pull through by hiring and training up our own people in business, in entrepreneurship and in research and amongst our start-ups.

Malcolm Roberts

I thank Senator McKim for moving this motion, which One Nation supports. It's One Nation policy that infrastructure of national significance should remain in the hands of the government on behalf of the people—not under government control but on behalf of the people. This includes power transmission lines and substations. Power stations can be privately owned and operated under a long-term supply price, which prevents price gouging in times of power scarcity, which happens all the time with weather-dependent solar and wind power. It's a travesty that the business model for Snowy 2.0 hydro seeks to justify the $42 billion price tag using a projection for power prices which suggests they too expect a profit from price gouging. AEMO, the Australian Energy Market Operator, is frequently forced to intervene in the market at $600 per megawatt hour, which is a staggeringly high price, because new gas-firming plants are not being required to accept a feed-in tariff. If it existed, it would be $60 to $80 per megawatt hour. Consumers are paying peak pricing which is 10 times the price they would pay if we built our baseload power stations with sensible supply contracts—fact.

Privatising infrastructure of national significance has failed. South Australia privatised water in 1996 and brought it back under government control in 2012. This was after the operator failed to maintain a sewage treatment works and Adelaide endured months of what was called the 'big pong'. Adelaide water went from being amongst our country's cheapest to our country's dearest. Western Australia privatised water in 1996 and brought it back under government control in 2019. The outcome in Western Australia was interesting. Perhaps Premier Carroll could pay attention there. During 25 years, the Western Australian government realised that managing complex private contracts was actually costing more than doing the work themselves. Moving Western Australian water back to government ownership saved taxpayers $5 million a year. Now Victoria is the latest bankrupt state selling off the silverware—VicWater. The plan is called Project Nerva and circumvents the Victorian constitution through leasing the $18 billion in assets of VicWater to the highest bidder. Victorians will pay more for their water and receive back an asset in a worse state than when it was leased. Such is privatisation. It leads to a monopoly, which leads to profit maximisation, which leads to gouging. I generally support the free market because it gives consumers choice, and choice leads to accountability, and choice leads to efficiency and productivity. Given Australia's small population, though, and huge area, we cannot support two sets of critical infrastructure for roads, water and electricity. We cannot place monopoly power in corporate hands, where profit maximisation is the goal and leads to gouging.

What of government monopolies? Our forefathers, the founding fathers of our Constitution, thought of that and came up with a solution—actually, they borrowed it from the American constitution. The solution is embedded in our Constitution. States provide infrastructure and critical services. That comes under competitive federalism. One state competes with another state. That's a marketplace in governance. There is choice. If South Australia is stuffing things up, South Australians can move to New South Wales or Queensland. It doesn't matter what it is. Whether it's education, infrastructure, water, electricity, roads—whatever it is, there is no monopoly, because the states have competition under competitive federalism. That provides a marketplace in governance, which leads to choice. If you don't like the state you're in, you can move to another state. Freedom of movement leads to accountability. So state ownership of critical infrastructure is part of a marketplace solution.

There's not enough time to tell you about Sir Joh, but Sir Joh abolished death duties in Queensland, and people moved to Queensland so that they could leave their children more money. That led to other states doing the same. Warren Buffett, the most successful investor ever, said his ideal investment is the sole drawbridge on a wide river. When you put it in private hands, infrastructure becomes a mechanism for gouging. We must protect national infrastructure and national services like water. They're key resources.

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