Water Politics in Victoria The impact of legislative design, policy objectives and institutional constraints on rural water supply governance Benjamin David Rankin Thesis submitted in total fulfilment of the requirements for the Degree of Doctor of Philosophy Swinburne Institute for Social Research Faculty of Health, Arts and Design Swinburne University of Technology 2017 i Abstract This thesis explores rural water supply governance in Victoria from its beginnings in the efforts of legislators during the late nineteenth and early twentieth centuries to shape social and economic outcomes by legislative design and maximise developmental objectives in accordance with social liberal perspectives on national development. The thesis is focused on examining the development of Victorian water governance through an institutional lens with an intention to explain how the origins of complex legislative and administrative structures later come to constrain the governance of a policy domain (water supply). Centrally, the argument is concentrated on how the institutional structure comprising rural water supply governance encouraged future water supply endeavours that reinforced the primary objective of irrigated development at the expense of alternate policy trajectories. The foundations of Victoria’s water legislation were initially formulated during the mid-1880s and into the 1890s under the leadership of Alfred Deakin, and again through the efforts of George Swinburne in the decade following federation. Both regarded the introduction of water resources legislation as fundamentally important to ongoing national development, reflecting late nineteenth century colonial perspectives of state initiated assistance to produce social and economic outcomes. The objectives incorporated primarily within the Irrigation Act (1886) and later Water Acts later become integral features of water governance in Victoria, exerting considerable influence over water supply decision making. Three case studies examine this process through considering: 1) Attempts at legislative reform in the context of the 1930s depression. 2) Attempts at inter-basin transfer of water resources across the northern dividing range in the context of metropolitan growth and the centralisation of population. 3) Attempts at neo classical, micro economic reform of the rural water supply sector through realigning the legislative and administrative focus. ii The broad aim of this research is to demonstrate that the objectives incorporated in legislative design have ongoing and typically unintended consequences over decision making. This rests on the legislation being the source of rules and rule interpreting behaviours that inform decision making. Furthermore, the self-reinforcing nature of policy choices occurring within the institution’s development ultimately leads decision makers to interpret institutional rules according to cultures, norms and practices that become unique to the institution. iii Acknowledgments It is interesting to reflect back at the end of this process and consider how many people have influenced what is essentially an individual and (at times) isolating pursuit. There are many who have assisted me through this journey and I am grateful to each of them (particularly all of the terrific colleagues I have worked alongside at Swinburne). There are some of course, who deserve special mention here for their encouragement, guidance and support. To Nick Economou at Monash University and Tony McLeod at the Murray-Darling Basin Authority for generously reading my various drafts and providing valuable feedback. To the Prime Ministers Centre at the Museum of Australian Democracy (Canberra) for their generous support in the early stages of my research, and the Parliament of Victoria – Parliamentary Library for providing access to resources that greatly assisted this project. Further to all of the intelligent, hardworking and (above all) welcoming people at the Parliamentary Library who assisted in making the experience of a research fellowship something that I will always cherish. To Bella Lesman, who was always willing to provide assistance when it was requested and listen when I am sure there were far more important things to be done, I am particularly grateful. To Brian Costar who encouraged me to take on this project and supervised its early stages I am especially grateful, and also to Peter Newton for his advice, assistance and encouragement. To Damon Alexander, who stepped in to supervise this project in its final stages, thank you for all of the (highly valued) advice, support and guidance that assisted in bringing this thesis to completion. Thank you to my parents, David and Rosemary who encouraged my return to VCE studies later in life, and for providing so much support over so many years. And finally, to my partner, Loredana for all her kindness, patience and good humour throughout a challenging time in our lives. Thank you. iv Statement of Originality This thesis is my own work and contains no material that has been submitted or accepted for any other degree, diploma or qualification in any university or equivalent institution. It contains no material prepared or previously published by any other person, except where due acknowledgement has been given. Benjamin David Rankin v Table of Contents Abstract i Acknowledgments iii Statement of Originality iv Table of Contents v List of Figures vi Abbreviations viii Introduction 1 Chapter 1 Governance, Institutions and Rural Water Supply in Victoria 13 Chapter 2 The Beginnings of Rural Water Supply Governance 56 Chapter 3 Consolidation, Amendment, and Interstate Agreements 109 Chapter 4 The McClelland Commission 1936 158 Chapter 5 Victoria’s Urban/Rural Water Supply Divide 213 Chapter 6 Objective Shift - Reform and Realignment 266 Chapter 7 Water Politics and Rural Water Governance in Victoria 324 References List 336 vi List of Figures 1.1 Average annual rainfall in Australia 16 1.2 Average rainfall Victoria (April to November) 20 1.3 Average rainfall Victoria (October to April) 20 1.4 Example Timeline 22 2.1 Chapter 2 Timeline 58 2.2 Photograph of Alfred Deakin 61 2.3 Photograph of Stuart Murray 77 2.4 The “tour of the Royal Commission” 79 2.5 Irrigation and Waterworks Trusts 1890 – Table 84 2.6 Major Irrigation and Waterworks Trusts 1890 – Map 85 2.7 Alfred Deakin “Striking the Rock” 91 3.1 Chapter 3 Timeline 110 3.2 Photograph of George Swinburne 120 3.3 “Tommy and co.” 129 3.4 The “Corowa Conference” 146 4.1 Chapter 4 Timeline 160 4.2 Soldier Settlement allotments 163 4.3 Red Cliffs proposal 1920 164 4.4 “Visibility Restricted” 172 4.5 Photograph of the “McClelland Commission” 179 4.6 Structure of SRWSC in 1936 184 4.7 “Abolition of water rights system” 191 4.8 Photograph of Francis Old 196 vii 5.1(a) Chapter 5 Timeline part 1 215 5.1(b) Chapter 5 Timeline part 2 216 5.2 Victoria population growth and centralisation 1891 to 1901 217 5.3 Melbourne’s catchments and water supply (1891) 219 5.4 Goulburn Weir c1909 222 5.5 Victoria population growth and centralisation 1951-1961 236 5.6 The MMBW’s reflections on urban expansion 238 5.7 The Ronalds’ proposal for Melbourne’s water supply 245 5.8 SRWSC Storage Capacity and Capital Expenditure (Water Supply) 249 5.9 Henry Bolte Thomas Darcy and Ronald East 252 5.10 Not “one drop” 253 5.11 The “nameless committee” 255 6.1 Chapter 6 Timeline 268 6.2 Photographs of David White and John Paterson 277 6.3 “The Objects of the Commission” 279 6.4 Annual inputs and diversions of salt (River Murray) 1984 289 6.5 RWC Regional Boundaries 1986 306 6.6 Victorian Catchment Management Regions 313 viii Abbreviations ANA Australian Natives’ Association COAG Council of Australian Governments DWR Department of Water Resources ISRC Interstate Royal Commission on the River Murray LCP Liberal and Country Party MHPC Melbourne Hydraulic Power Company MMBW Melbourne and Metropolitan Board of Works NCSA National Conservation Strategy for Australia NREC Natural Resources and Environment Committee NSESD National Strategy for Ecologically Sustainable Development PBRC Public Bodies Review Committee PWC Parliamentary Public Works Committee RWC Rural Water Commission SRWSC State Rivers and Water Supply Commission TWE Transferable Water Entitlement UAP United Australia Party UCP United Country Party VFU Victorian Farmers’ Union WRC Water Resources Council 1 Introduction This thesis explores rural water supply governance in Victoria from its legislative and administrative beginnings in the 1880s through to the period of reform during the 1980s and early 1990s. It considers the evolution of complex legislative and administrative structures which embodied nineteenth century perspectives on agricultural development and how they later came to constrain the policy environment. This thesis contends that the emergence of a dominant institutional structure in the years following federation exerted a profound influence over the subsequent policy trajectory. It also considers how powerful political institutions can reinforce existing policy objectives at the expense of alternate policy pathways. Further, the thesis explores the historical context of key moments that occur throughout the period of investigation. The thesis is focused on Victorian rural water supply governance as a political institution. Extending on this “rural water supply governance” refers to the structure of legislative and administrative arrangements, and executive government decisions concerning the supply of irrigation water to Victoria’s agricultural