Barnaby Joyce signed off $80m for Angus Taylor’s old company after zero was paid for same sort of water nearby

by | Aug 20, 2020 | Energy & Environment, Government

Same water, same valuer, $80m and nought. The same type of water licences for irrigation properties near those for which the Coalition government paid $80 million in 2017 were valued at zero between 2008 and 2010, writes investigative reporter Kerry Brewster in this exclusive report.

The same commercial property consultant who wrote the valuation used by the Federal Government to pay Eastern Australia Agriculture (EAA) nearly $80 million for its water licences valued at zero the same type of water owned by two nearby southern Queensland cotton farms.

As Michael West Media reported on Tuesday, most of the record $80 million from the sale ended up with a Cayman Islands company established by Energy Minister Angus Taylor, Eastern Australia Irrigation (EAI). Taylor was the founder of the Caymans company and a director and consultant to its Australian associate EAA, both before the controversial $80m water sale in 2017.

Barnaby’s Boondoggle: documents reveal $80m price for ‘Watergate’ licences was nearly twice valuation

Eastern Australia Agriculture booked a $52 million profit immediately after selling the water licences belonging to its Clyde and Kia Ora cotton properties, in a the deal, which was overseen by then water minister Barnaby Joyce.

Shaun Hendy, the Colliers International valuer who in 2016 conducted the valuation of the EAA properties on behalf of the Federal Department of Agriculture and Water, had previously valued at zero the overland flow licences belonging to two properties near the Kia Ora and Clyde stations.

In a research report this week, Maryanne Slattery of Slattery & Johnson and Rod Campbell of The Australia Institute said the unredacted documents proved the Commonwealth paid too much for the water.

Local farmer under financial pressure

Under financial pressure in 2008, Queensland farmer Lawrence Pola had several valuers assess his water licences that were attached to the Kilcummin and Cawildi stations, located above Cubbie Station in the Lower Balonne valley.

One of the valuers was Mr Hendy, who then worked for CBRE. He agreed with another valuer that Pola’s overland flow licences had no value separate from the land.

“The licence does not comprise a tradeable component and has been correctly identified … as being attached to the land and as not having a value separate to the land,” his 2010 CBRE valuation stated.

Mr Pola says he was “stunned” by the subsequent $80 million purchase of licences from Eastern Australia Agriculture.

“It’s a cover-up,” says Mr Pola, who was forced off his properties in late 2009. “They’ve justified the EAA deal by saying the system has been changed to allow the sale of overland flows.’’

Overland flow licences ‘worthless’

Queensland’s overland flow licences in the Murray Darling Basin cannot be traded on the open market because they are attached to land. Many valuers regard them as “worthless” when separated from land because the floodwaters can be taken by other water users once flows leave the property.

But in 2016 Queensland amended the law to allow the Federal Government to purchase overland flows under the Basin Plan, making the Commonwealth the only buyer in town. By way of comparison, in 2014 the Commonwealth purchased overland flow licences from the nearby Balandool cotton property south of Kia Ora and Clyde for $800/ML, less than a third of the price it paid to Eastern Australia Agriculture.

A spokesperson for the Queensland’s Department of Environment, Mines and Energy said:

“The Commonwealth Environmental Water Holder was recognised under the Water Regulation 2016 as a ‘prescribed entity’ which can acquire and hold a water licence without owning the land. This has allowed the prescribed entity to acquire water licences from sellers, which has the effect of returning water to the environment.”

Queensland’s Department of Environment, Mines and Energy did not consider the buying of the licences a water trade.

The Coalition presented the taxpayer-funded deal with EAA to the public as a way of returning water to the ailing Murray Darling River system. But there are serious doubts the overland flows bought from the Kia Ora property have benefited the river system due to the high level of irrigation development downstream from the property.

Hendy warned the Federal Government about these risks when it was considering buying EAA’s water licences. He stated in the Colliers valuation:

“Depending on the location of a licence within the catchment, the acquisition of these rights to restrict the taking of water with the intent of providing more water for environmental purposes may only increase the opportunity for a water harvester downstream to increase their take.”

The Kia Ora operation near St George in southern Queensland is located above the Cubbie and Balandool cotton operations.

An unredacted copy of Hendy’s valuation when he conducted the EAA valuation for the Department of Agriculture and Water while working for Colliers International shows a valuation range of $1,100 to $2,300/ML, with a central estimate of $1,500/ML for licences attached to the Kia Ora and Clyde properties. Yet the Commonwealth paid $2,745/ML, nearly double the valuer’s central estimate.

Guardian Australia reported last year that a year before Colliers provided that valuation for the department Colliers was acting as agent for EAA to sell the properties.

“Colliers International has the pleasure of offering to the market one of Australia’s largest premium agricultural land and water portfolios; the Eastern Australia Agriculture portfolio consisting of the Kia Ora and Clyde properties in Australia,” it said on its LinkedIn page in September 2015.

‘No true market’

A spokesperson for the Department of Agriculture, Water and the Environment said “the department should be prepared to pay 10 to 30% above the standard market rate (i.e. up to $3,000/ML) for ‘properties of a high standard that have achieved above average levels of water use efficiency’ in this region”.

But as water specialist Maryanne Slattery’s analysis shows, the term “standard market value range” does not appear in the Colliers valuation document. In fact, that evaluation emphasises “there is no true market” for Queensland’s overland flow licences.

The Commonwealth paid an extraordinary premium to Eastern Australia Agriculture for water licences described by Colliers’ valuer Shaun Hendy as “lower valued” water that could be taken by other “harvesters”.

This Watergate scandal has a long way to run yet.

Gutless Wonders: when will politicians demonstrate the accountability they foist on the rest of us?

ABOUT THE AUTHOR

Kerry Brewster

Kerry Brewster

Kerry Brewster is a Walkley-award winning investigative journalist and documentary maker. As a specialist water writer, she has contributed to The Saturday Paper, Guardian Australia and The New Daily. A former ABC Lateline reporter, she investigated water corruption issues. She has also produced and directed independent documentary films, including “Demons at Drivetime”, which won the Dendy award for Best Australian documentary and the ABC TV series "Our Boys". Her Twitter handle is @KerryBrewster4

9 Comments

  1. Avatar

    wow – I’m sure Angus (he’d make a good steak!) Taylor knows ‘nothing’ about how the $80M got into a secret offshore Cayman Island trust fund or wherever held by a company he controlled

    trust me … BWAHAHAHA !!!

    • Avatar

      The sad thing is that people do not realise this is corruption.

      • Avatar

        Very true. Angus Taylor needs to pay back the $80m to taxpayers. This was a rort for his financial benefit with probable kickbacks going to those who assisted. Pay it all back.

      • Avatar

        The worse thing is – they move in circles that respect this type of crime. They’re considered clever. They should be shot and their families stripped of assets and put to work cleaning government buildings for minimum wage.

  2. Avatar

    Another crime perpetrated by a “commercial in confidence” trickster.

  3. Avatar

    Can someone explain how it came to pass that water rights became an open market commodity, and not limited to those that actually use it?

    • Avatar

      I’m only guessing, but it could be, that it would enrich the rich.

  4. Avatar

    The Politicians wonder why we, the Australian people do not trust
    them one bit. This is just one sordid example of the Politicians
    contempt for the electors who sadly, gave them their cushy seat in the
    Parliament.

    The Australian people do know what is happening
    and are calling for a Federal ICAC. Those MP’s who drag their feet and
    do not want an ICAC are found out.

    They need to be reminded that
    the Australian people expect all MP’s and bureaucrats to have the
    highest level of integrity and morals when we vote for them and to do
    their jobs 100% of the time in this manner and nothing less.

    We wish to also remind all MP’s that we insist on a Public Water Register
    and the longer the Nationals and Liberal Party’s fight against it, shows
    these MP’s are not making the decisions we have asked them to make and
    they are just protecting their secret transactions.
    This is why we do not trust them to do their job in the most honorable, open and transparent manner for the people of Australia.

  5. Avatar

    “The Coalition presented the taxpayer-funded deal with EAA to the public as a way of returning water to the ailing Murray Darling River system. But there are serious doubts the overland flows bought from the Kia Ora property have benefited the river system due to the high level of irrigation development downstream from the property.”
    In response to the Project’s 18 April 2019 segment on the Eastern Australian Agriculture water purchase, the Department of Agriculture Water and Environment made a media statement which included:
    “Claims that the water cannot be used off the property are false. Water entitlements are now held by the Commonwealth Environmental Water Holder. EAA has decommissioned structures that previously allowed it to capture the water. This water is no longer being used for irrigation or being obstructed by on farm infrastructure thus allowing the water to flow across the land into waterways. It has in-stream environmental values helping to improve the health of the river while being available for use to meet environmental targets downstream”
    https://www.awe.gov.au/news/on-the-record/eastern-aus-ag-water-purchase

    In January 2019, the Cayman Islands entity, Eastern Australia Irrigation (EAI), which controlled EAA, sold to a company called Eastern Australia Cropping (EAC). So EAC bought 100 per cent of the shares in EAA from EAI and now owns the farms. Price is rumoured at $70 to $80 million. So the question arises of what is the value of the land for cropping without a water licence. But the Commonwealth purchased rights to 28.7gigalitres of overland flood water. In 2015 the Qld government Natural Resources Minister Anthony Lynham had discussions with the federal assistant [environment] minister Bob Baldwin about purchasing both properties and water rights of 57 gigalitres of Kia Ora and Clyde for a desktop evaluation of $123 million. So there may be 28 gigalitres water rights remaining with the 2 properties.
    .

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