Audit will investigate the $80m purchase overseen by Barnaby Joyce but Labor says it won’t go far enough

This article is more than 1 year old

This article is more than 1 year old

The Coalition has sought to defuse a growing political scandal over $80m in water buybacks by referring the past decade of commonwealth water purchases to the auditor general.

Saying the government needed to provide the community with “confidence and clarity” in how the Murray-Darling Basin plan was operating, the minister for agriculture and water resources, David Littleproud said the audit would would probe the $80m purchase overseen by his predecessor Barnaby Joyce as part of broad-ranging review.

Labor, which has been considering its support for a royal commission into the water buybacks, insists an independent judiciary inquiry is needed to get to the bottom of the sales signed off by Joyce in 2017.

The party’s environment spokesman, Tony Burke, said the referral was an admission that “the government has a problem” and the issue went beyond what the Australian National Audit Office (ANAO) could examine.

“While some issues can be addressed by the ANAO , the questions of Barnaby Joyce’s conduct go beyond the remit of the ANAO,” Burke said.

Murray-Darling water buyback: factcheck of Scott Morrison's claims Read more

At 5pm Burke issued a statement that the department had missed a Labor-imposed deadline to release documents.

“It is now clear that there needs to be an independent inquiry into the Eastern Australia Agriculture scandal, with coercive powers so that Australians can get the truth,” he said.

Labor proposes the inquiry should examine just one transaction, a move that would effectively prevent Labor’s handling of the portfolio and other Coalition water ministers from similar scrutiny.

The sale has come under scrutiny given it took place without a public tender process and because of the quality of the water purchased. On Monday Burke said it appeared “top dollar” was paid in a $78.9m deal with Eastern Australia Agriculture for the low-quality flood water from two Queensland properties.

Burke told Radio National that Barnaby Joyce’s actions were “completely different” from Labor’s handling of the portfolio because he stopped competitive tender processes, rejected Queensland’s suggestion to buy the land not just the water and then bought “the lowest quality water” .

The energy minister, Angus Taylor, has also come under pressure over the sale after it emerged he was one of the founding directors of EAA.

Taylor cut ties with the company before he entered parliament in 2013 and has repeatedly said that he has never had a direct or indirect financial interest in the company, which was domiciled in the tax haven of the Cayman Islands.

As reported by Guardian Australia this morning, Joyce specifically asked to be kept in the loop about the progress of the $80m sale to EAA, despite him repeatedly claiming he was at “arm’s length” from the department’s process.

Joyce, after speaking to Radio National last night in a combative interview, said today that he had “no doubt” he would be cleared by the auditor general’s probe and said he was looking forward to the investigation.

“My role was never to actually select a purchaser or to determine a price,” Joyce said. “I’m absolutely confident we have done absolutely nothing wrong.

“I’m confident we worked within the legislation [and] I’m confident in the department.”

The prime minister, Scott Morrison, also insisted Joyce “acted in accordance with the legislation”.

Littleproud said the government had asked the auditor general to bring forward its inquiry into strategic water purchases, which was already flagged as a “potential” inquiry.

He said he saw “no evidence” that a royal commission was needed, and said the audit would probe why a public tender process was not undertaken.

“They’re the issues the auditor general will go through.”

“That’s why we have this institution – to make sure we can give confidence to the Australian public to make sure the actions of our department and ministers are above board. We’re confident they have been of all political persuasions.”

Under Joyce, the impartiality of the Department of Agriculture and Water, and Joyce’s administration of it, has come under question.

The former secretary of the department, Paul Grimes was sacked in 2015 after sending a letter to Joyce about a controversial episode involving alterations that were made to the Hansard in 2014.

“I am writing to advise you that I no longer have confidence in my capacity to resolve matters relating to integrity with you,” Grimes began.

“This follows the sequence of events before and following the alterations to Hansard that were made in October 2014.”

Facebook Twitter Pinterest Coalition MPs Barnaby Joyce (left) and David Littleproud on the election campaign trail at a community drought forum in Tamworth. Photograph: Steve Gonsalves/AAP

Following Grimes’ departure, Daryl Quinlivan became the secretary of agriculture. The deputy secretary, Phillip Glyde became the head of the Murray-Darling Basin authority.

The impartiality of the water portfolio also came under question at the South Australian royal commission into the Murray-Darling Basin plan. The department and the MDBA did not give evidence as they were instructed by the government not to participate.

The chair of the Northern Basin Aboriginal Nations, Fred Hooper gave evidence that there had been “a shift in attitude, upon the appointment of Joyce to the water portfolio, away from a holistic, whole-of-basin approach to a focus on specific sites, namely Dirranbandi, St George and Warren, and the economics of irrigated agriculture in those towns.”



Eastern Australia Agriculture properties are near St George. Joyce had been an accountant in the area and lived there while a senator for Queensland.

Soon after becoming minister, Joyce boasted in the rural press that he had blocked a big water deal in the region that was being contemplated by his predecessor. The Eastern Australia Agriculture deal then came forward in 2016.

Joyce has said the water purchase for $80m was at arm’s length. But documents show that Joyce specifically asked for the department to “report back to me on this and seek final approval before settling this purchase”.

The section of the department dealing with water buybacks is Mary Colreavy. She has told the Senate that some companies approached the department and in some instances the department went back to sellers who had been unsuccessful in selling water to the government in the past. The Queensland government had earlier proposed that the commonwealth buy the Eastern Agriculture properties outright. The commonwealth decided to proceed with buying the water only.