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 Idiots at the helm sold off our water!

14.09.19.  Australia has not been the lucky country for some time now, it changed when idiots were elected to the levers of power. It’s like a shoddy, makeshift repair on a truck. It runs Ok for a while and then a catastrophic failure costing a multiple of what it should have done for the proper job.
The catastrophe is upon us—all Australians. Our incompetent leaders have sold off our water to interests that don’t own a square centimetre of land—ruthless water barons have their greedy mitts on our most vital and precious asset—WATER! Why are we not in the streets burning mongrels at the stake? Because they knew we wouldn’t be—that’s why! Read this and weep for your country!
They came from different parts of the world, and had for years enjoyed stellar careers playing the equity and derivatives markets­ for top international inves­tment houses.

Source: Ean Higgins, News Corp

Funds flow fast as water barons tap opportunity

But a decade ago Edouard Peter and other high-flying ­investment executives at Deutsche Bank’s Singapore operations decided to strike out on their own. A few years ago they settled on a niche market recent­ly opened up by Australian governments to skilled investment gurus such as them: water.
Peter, a sophisticated, well-educated American who created Duxton Water Ltd, now represents a new class of wealth in Australia: water barons who own tens of millions of dollars of a limited resource without owning agricultural land.
So highly priced is irrigation water that some farmers are taking­ the heartbreaking decis­ion to let their grape vines die ­because they can’t make a profit if they water them. But in Peter’s mind, he and his colleagues are saviours for agriculturalists during dry times, taking on risk and engagin­g in complex trading so as to offer irrigators an affordable hedge against severe drought in the form of long-term water leases.
An irrigation farmer who leases water from Duxton, Russell Dabin­ett — who grows potatoes and grain and raises livestock in the southern Mallee near Parilla in South Australia — said the lease was invaluable, giving low-priced, secure water over a long period.
In the process of helping growers, Peter has made a large amount of money in a short time. As chairman of Duxton Water and owning 9 per cent of the company that listed just three years ago, the Peter family’s share of its water entitlement assets is more than $20m, built on the back of skyrocketing water prices in a severe drought.
After obtaining a degree in Eng­lish literature at private university Carleton College in Min­ne­sota, Peter worked for top-end financial institutions in different parts of the world. In 2009, having married an Australian, he moved to Adelaide and set up Duxton Asset Management as a funds management umbrella group that created a number of companies, some listed, some private­ equity, to invest in agriculture.
Joining the Duxton group were Peter’s former Deutsche Bank colleagues: Stephen Duerden, who the website says is a director and investment committee member of a number of Cayman Islands-based investment funds managed by Duxton; and Scott Jaffray, who holds a masters degree in economics from the University of Aberdeen and had worked as an equity analyst and portfolio manager.
Duxton Asset Management has operations in Australia, Asia and Europe. Its clients include leading global pension funds, sovereign­ wealth funds, insurance companies and asset managers, private banks and “ultra-high-net-worth individuals”.
A few years later, Peter and some of his colleagues saw an ­opportunity to apply their equity, derivatives, and investment manage­ment skills to the new, loosely regulated water market.
Prior to the 1980s, entitlement to irrigation water was linked direct­ly to ownership of agricult­ural land. Over the years, state and federal governments relaxed the rules, removing in 2014 the last barriers to anyone buying, selling, leasing and speculating on irrig­ation water entitlements, whether they had any connection to the land or not.
Now water barons can trade water like farmers: they can buy and sell permanent entitlements, which provide a share of available water each year across a region, and trade what is known as temp­orary “allocation” water on the spot market.
Peter and his colleagues set up their dedicated water trading company separate from agricultural concerns. They described Duxton Water as “Australia’s only ASX-listed vehicle providing investors with direct access to water”.
Duxton has fulfilled its promises to its investors of capital growth and dividends, partly through a skilful trading strategy, partly through weather fortuitous to it. When Duxton Water listed, in Septem­ber 2016, a huge amount of rain was starting to refill dams in the Murray-Darling Basin, after the millennium drought.
More than anything, the price of permanent water entitlements, and the spot market, depends on rainfall and how full or empty are state-owned dams. When Duxton started buying them, the price was near bottom. But they started to rise fairly rapidly from the start of last year as the big wet transitioned into the big dry.
Duxton kept buying, because its analysts saw a very interesting trend on the demand side. Big and small investors, including some from overseas, had planted permanent crops in the lower part of the Murray-Darling Basin — almond trees in particular, but also citrus and others. Unlike cotton, rice and other annuals that farmers can plant if there’s plenty of water and its price is low, or not if it’s dry and the water price high, farmers of ­almonds and other permanent crops have to irrigate no matter what, because in a drought their trees could die. And as almond trees age, they need more water.
Duxton saw the writing on the wall: the demand for water was going to rise based on the permanent plantings, and so were water prices. So it kept reinvesting profits and new share capital into more water. As it is allowed to do, ­Duxton “carried over” some water, building up its stocks, rather than selling or leasing its full alloca­tions in the water year, which follows the financial year.
In its annual report, Duxton said water prices were headed to new heights. It was right. From a long-term average of about $135 a megalitre in the Victorian Murray irrigation region, water on the spot market is now trading at $800/ML. Duxton’s investors own 74 billion litres of permanent water entitlements, 12.5 billion of which the company obtained in the six months to June. That’s enough to fill an upper-middle-sized state-owned dam, and worth $256m as at June 30.
In the first six months of this year, during the height of the worst drought on record, Duxton Water more than doubled its profit compared with the cor­res­ponding period last year to $2.5m. It reported a total return for investors for the year to June of nearly 30 per cent.
There is no suggestion Duxton Water and its officers have done anything inappropriate. They have done what state and federal governments effectively invited them to do when they opened up the market to investors not tied to the land. But a lot of farmers and farm groups are furious. Twelve grower groups wrote to Water Resou­rces Minister David Littleproud last week asking the federal government to impose a temporary ban on water barons from buying­ or carrying over water.
The most vocal critic of Duxton Water is Rob McGavin, head of the biggest olive grower, Boundary Bend, which owns the Cobram Estat­e and Red Island brands. He believes Duxton Water has been allowed to amass and keep too much water too quickly, and that since it can carry over water and has no crops to worry about, it can keep it until it reaches a price upon which it can make a killing.
Peter declined to be interviewed, but in a statement to the stock exchange after The Australian broke the story about water rights last Monday, Duxton Water denied any suggestion it was engaged­ in market speculation.
“Duxton Water is a long-term investor of Australian permanent water entitlements,” the company said. “The purpose of Duxton Water is to … provide flexible water supply solutions to our Australia­n farming partners.”
At present the company has just over half of its water leased out to farmers, and hopes over time to have 70-80 per cent on lease.
Dabinett said his gratefulness for the bore water leases he has with Duxton Water covering five, 10 or 15 years was “absolute”.
His own water entitlements are not enough to meet his total requirement­s, and leasing offers a flexible option at a time when it is almost impossible to buy more permanent licences.
He said the price per megalitre he paid Duxton was “less than a sixth” of the $800/ML the Victor­ian Murray irrigators were paying on the spot market.
“We need more options (such as Duxton) to get hold of water alloc­ations in our region,” he said.

{ 18 comments… add one }
  • Lorraine 14/09/2019, 8:53 am

    disgusting it is a word I use every day. There is such evil scammers for $dollars and leftie idiots on social issues.

  • Pensioner Pete 14/09/2019, 8:53 am

    Interesting indeed.

    The people (taxpayers) paid for the infrastructure to capture and contain the water, yet the government, made up of persons elected by the people and without the people’s consent, sell off our water?

    Smells of high treason to me. Time to oil up the .3oh methinks.

    • Neville 14/09/2019, 12:13 pm

      Problem is, as in so many things, that “the people (taxpayers)” actually IS “the government”; we do it all by representation, rather than a direct plebiscite on everything.
      So essentially, “the people” (all of us) “paid for the infrastructure”, yes; and “the people” (as represented, ie, elected with the people’s consent) “sold off our water”.
      Technically, ‘the people’ built it up, then ‘the people’ sold it off. No real issues with that.
      BUT .. whether it was a good idea is the real issue!

  • Aktosplatz 14/09/2019, 8:55 am

    This proves exactly my point that utilities essential for existence and survival are electricity and water. They should never have been privatised in the first place ( privatisation had disastrous effects on the people of Brazil and Cape Town in South Africa when first introduced).

    With privatisation, shareholders expect profit. And when they have control of utilities by which we need to live, crosses the line into near extortion by by the board and shareholders. “Pay the Price or Die” is what this means.

    It is clear to me at any rate, the States have sold us all down the river, and as survival is what this is all about, the Federal Government should assume control of both these utilities and nationalise them, and defend their citizens from Corporate Greed.

    Then we have taxpayer funded utilities which by definition must become affordable for everybody.

    • Albert 14/09/2019, 9:36 am

      Akto, I wouldn’t be holding my breath waiting for the clowns in our parliaments, State and Federal, to make a move to unravel the disastrous mess they have made of something as simple as guaranteed water access for our farmers. The useless clods wasting our time and money in the various parliaments don’t own the water as it belongs to the people of this country and in my opinion what they have done by selling it off to greedy profiteers is theft pure and simple.

      As for our Clayton’s Federal Government, they don’t have the intellectual wherewithal to be able to see a much needed common sense solution to bringing the monster that they and their cronies before them have created under control.

      Maybe it is time for our farmers who rely so heavily upon water to simply tell the government and those greedy and uncaring profiteers who now supposedly own the water to move aside as they just take what they need and refuse to pay anything but the actual cost of maintaining any necessary infrastructure that may be involved involved.

      • Pensioner Pete 14/09/2019, 9:58 am

        Albert: Quoting you: “Maybe it is time for our farmers who rely so heavily upon water to simply tell the government and those greedy and uncaring profiteers who now supposedly own the water to move aside as they just take what they need and refuse to pay anything”

        You have my vote. The government won’t have the gonads to do anything should this happen, however, this action will force the issue to the forefront and likely break the ‘mold’ of privatisation of publicly owned assets in this country, hopefully, forever.

        The sooner the better.

      • DT 15/09/2019, 10:47 am

        Enough of this economic vandalism, it’s not only Australians who rely on Australia’s farmers for their food supplies.

    • Neville 14/09/2019, 12:18 pm

      I’ve also long thought that essential services should be controlled by “the people” (see my comment on PP’s thoughts above).
      If Australia (“the people”) control the systems, then we the people can either reduce the costs to the lowest common denominator, saving everyone money and actually increasing the ‘common wealth’ of the country, or, we could under some circumstances rent them out, making a profit for we the people, and again, actually increasing the ‘common wealth’ of the country.

  • DT 14/09/2019, 9:53 am

    Water is too cheap and we need desalination plants and no more dams.

    Mr Harbourside Mansion & Colleagues on both sides during the Howard Government years.

  • JK. 14/09/2019, 10:07 am

    Pensioner Pete, I’m afraid it’s too late for 30s flack jacket Johnny and his slimy mate the so called nice fellow of politics Tim Fisher saw to that by disarming all the honest gun owners, and now the criminals left in parliament are trying to get away with bringing in their cash bill and putting the final nail in coffin of Australians as other countries are now doing and going to negative interest rates and taking our savings for their grubby mates in the banks, beware Australia you are being treated with contempt by the elite and are having the wool pulled over our eyes.

    • DT 14/09/2019, 10:28 am

      I am intrigued by the comments continuing that claim Australians were disarmed.

      Apparently the commentators are not aware of gun licences and registered guns.

      • Pensioner Pete 14/09/2019, 11:58 am

        Legal gun ownership is now in greater numbers than prior Port Arthur.

  • Peter Sandery 14/09/2019, 10:35 am

    Firstly, my understanding of Donald Horne’s argument in the Lucky Country was that, up until the point of his penning that tome, Australia was the lucky country, despite the inadequacies of its leaders, past and present to that point. The current problem we have with water and financial wizards has a close relation to what we have with so called renewable energy and financial wizards in that, namely, our political leaders have forsaken their primary duty of representation to those who they are supposed to, and have been hypnotised by the power that they have but are unable to adequately use and, do their best to outsource all of their responsibilities.
    Had we had adequate geographical representation in the Senate as I have previously alluded to, and as our fore fathers expected, the water rights legislation would not have got through such a senate and there would have been a good chance that the so called “science” which backs up the idea of the requirement of “environmental flows” to ensure that Lakes Alexandrina and Albert at the mouth of the Murray River were fresh water would be shown up for what they are – a man made hoax – those lakes originally were estuarine, that is brackish, not fresh – Jennifer Marohasy and others have written on this but, like Peter Ridd on the “science” of the Great Barrier Reef, her treatises were totally ignored by our political representatives, to my mind because said reps and the venal cabal that advise them were worried about the effect making policy along Marohasy’s and Ridd’s ideas, namely testing the so called science for accuracy before committing billions of taxpayers dollars into policies based on such questionable bases, would cost them inner city seats at elections.
    Until the system of voting for Senators is changed so that each State is divided up into twelve approximately equal geographical zones, the residents of whom vote for one Senator who must have been resident in that zone and stay a resident except for parliamentary duties, our country will continue to go down the gurgler. Multi-member zones for the Senate would not work as you would still have party tickets, thereby dividing the loyalty of the Senators between those they are supposed to represent and the venal narcissists who run the parties, set the priorities on the party ticket, and are only interested in power which they handle in a purely selfish and non-transparent way.

    • Neville 14/09/2019, 12:47 pm

      Well-described, Peter. You’ve done a better job of expanding on the point than I did above, re essential services in Akto’s thoughts.

      • Pepperpete 14/09/2019, 4:09 pm

        You are playing their game by doing so. They have a good head start on gaining the public’s support. We can’t afford another 30 years of the climate bullshit. Call Federal Parliament to order and have a division.
        Line up those for further waste and economic disaster on one side and show them the picture of our new waste cutter on the steps of Parliament House and your problems will be solved.
        Here she is:

  • DT 14/09/2019, 11:16 am
  • Pepperpete 14/09/2019, 3:55 pm

    Listen fellas, climate alarmists are just today’s version of snake oil salesmen. Doesn’t matter what the problem, they have the answer. What we have today, that they did not have then, is the unlimited numbers of stupid politicians and incompetent bureaucrats that adorn our places of power and policy making. Coupled with ruthless Green politics and a compliant media.

    We have been led into the abyss and, now face national economic disaster due to a conspiracy of f**kwits and the greedy.

    For things to change for the better and, these useless pricks to do their jobs seriously we may need to Crowd Fund the purchase and construction of a guillotine on the steps of Federal Parliament, and advertise for a National Executioner with apprentice.

    Because nothing will change until you start to lop of a few heads.

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