The drought and the market
From November 1, the drought which has been crippling much of rural Australia will come to the city. The NSW minister for planning has announced mild water restrictions for all households in Sydney.
Some 93% of NSW is currently affected by severe drought, the second in a decade. Water reservoirs have dropped to 60% of capacity. What was once a daily 600 megalitre flow into catchments has been reduced to less then 100 megalitres. With no-one able to predict an end to the drought, concern has been mounting about water conservation, although the Water Board has issued assurances that enough water remains in the catchments to service NSW even if rain does not fall for another two years.
Although gentle, the water restrictions will bring home to the population of Sydney how precious a community resource water is. Unfortunately others, less community minded, are also aware how precious water is.
The Water Board has released a report which claims water use is too high because water is "grossly underpriced". Ongoing speculation has surrounded proposals for privatisation of Sydney's water supply. In 1992 $229,000 was spent on a consultancy report on privatisation. Last year the Financial Review ran a story, intended for its business audience, which said that Britain's privatised water was the best performing sector on the London Stock Exchange.
But can the free market provide solutions to water shortages? Can the thirst for profit satisfy water needs?
The answer is no. The market can provide no solutions to so-called "natural disasters" like drought.
The imperative to make individual profits from agriculture in Australia has caused sever misuse of the land. Farmers desperate to make a living in the face of high interest rates and collapsing prices for exports like wool are forced to overgraze their land and allow it to degrade. Heavy clearing of land for crops also reduces rainfall and increases erosion, making both drought more likely and land more vulnerable to the effects of it.
When droughts hit, farms start going under and the water catchments just keep shrinking. The only solution offered by the free market to this situation is the shutting down of "unviable" farms and privatisation or cost incentives for water use. Ecologically sustainable farming methods and water waste reduction technologies don't rate a mention.
To be able to cope with droughts — which are not an accident but an inherent part of the Australian climate — we need democratic planning that manages vital resources like water in the interests of community. Any moves to privatise water, and therefore individualise the profits made from it, are moves in the wrong direction. Privatised water in England may be making the London Stock Exchange happy, but the English people have the most expensive and worst quality drinking water in the European Union.
The parched countryside is a stark lesson on the need for communal resources like water to be managed and used in the interests of the majority.