The Australia Institute and consultancy firm, Slattery & Johnson, have released research today based on newly unredacted valuation documents about the $80 million ‘Watergate’ scandal.

The documents, provided to independent Senator Rex Patrick last week after a two-year battle, contain the commercial valuation commissioned by the Department of Agriculture and Water Resources (DAWR) for negotiations with the vendor. 

Key findings:

• The Commonwealth paid $2,745 per megalitre, nearly double the $1,500/ML price recommended by the valuer it commissioned, almost 20% more than the top of the valuation range of $1,100 – $2,300/ML.
• The valuation documents contradict claims by the Department of Agriculture and Water Resources that the valuer “stated that the department should be prepared to pay” a premium for the water rights.
• The valuation documents also contradict the Australian National Audit Office finding that prices paid in strategic water purchases were equal to the maximum price determined by valuations.

Then-Water Minister Barnaby Joyce oversaw the purchase from Eastern Australia Agriculture (EAA), a company domiciled in the Cayman Islands that was founded by Energy Minister Angus Taylor. Mr Taylor says he had previously cut ties with the company.

“All Australians should be disturbed by the fact that their money has been spent paying well over the market price for these water licences. It’s no wonder the Government went to such great efforts to keep this valuation secret,” said Senator Rex Patrick, independent Senator for South Australia.

“I am very disappointed at the manoeuvering that both Ministers and officials have engaged in to prevent this information from being available to the Senate. 

“It is my view they have obstructed the Senate in the conduct of its oversight role and that is something that I will be pursuing this vigorously when parliament returns.

“The unredacted valuations also raise questions for the Auditor-General,“ Senator Patrick said.

“The taxpayer paid a well-connected company far too much for water that will achieve far too little,” said Rod Campbell, Research Director at The Australia Institute.

“The public has a right to know why so much was paid and who was responsible for paying so far above the valuation the Department commissioned.

“Prior to the unredacted version being released, DAWR officials selectively quoted and misrepresented this valuation to suggest that a premium would need to be paid to the vendor due to the efficiency and quality of these properties.

“We now see that rather than the EAA properties being the best in the region, they are actually among the worst performers in various valuations and had rapidly increasing liabilities.

“This document shows what our research has said for two years – there was no justification for the prices paid. Taxpayers and rivers have been ripped off,” Mr Campbell said.