Labor says it may hold royal commission into Murray-Darling water ‘scandal’ | Australia news

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Labor has left the door open to holding a royal commission into the Murray-Darling basin plan, calling on the government to explain the “scandal” surrounding $200m in water buybacks.

Pressure has been mounting on the Coalition to justify why the former agriculture minister Barnaby Joyce signed off on the controversial water purchases in 2017, which took place without a public tender process.

Labor’s environment spokesman, Tony Burke, has written to the Department of Environment asking it to release documents relating to the buybacks, and says the party will “wait and see” if a royal commission is needed.

“Be in no doubt it matters whether or not this was value for money, it matters that it wasn’t done through a tender process,” Burke said. “There may be an explanation for this [but] so far the government haven’t offered it, the department haven’t offered it, and we need those answers.”

Burke said the government needed to explain why the government chose to deal with Eastern Australian Irrigation, which was domiciled in the Cayman Islands at the time of the water buybacks, rather than transacting with “family farmers”.

He has called on the department to publish advice relating to the purchase, saying it appeared “top dollar” was paid for flood waters that only existed in very rare circumstances.

“You don’t pay Versace prices for water that you get from The Reject Shop and that looks like what Barnaby Joyce has done,” Burke said.

The opposition leader, Bill Shorten, called the management of the system a “scandal” that was “damaging our future”.

EAA has come under particular scrutiny because the company’s early directors included Angus Taylor, who is now the energy minister.

Taylor, a director of the company from 2008 to 2009, says he has never had a direct or indirect financial interest in EAA, or any associated company, and had no involvement in the buyback decision.

The prime minister, Scott Morrison, sought to deflect criticism about the sale on Monday, saying the Murray-Darling basin plan was bipartisan, and pointed to similar purchases undertaken when Labor was in power, including water bought from EAA.

“It was a program that was started under the Labor government,” Morrison said. “The department is tasked to pursue this plan, to take advice, to enter and negotiate the contracts at arm’s length from ministers.

“No agreement is perfect but it [the Murray-Darling basin plan] is one that enjoys bipartisan support and transactions have been undertaken by both sides.”

Burke said the Coalition’s 2017 buybacks were different because they took place without going to tender and because of the reliability of the water bought.

The Department of Environment took the unusual step of releasing a statement last Friday defending the purchase, saying it undertook the due diligence for the sale, “including checking the validity of the licences on offer; and obtaining commercial water valuation advice, independent advice on the possible socio-economic impacts, and advice from the state government, the MDBA and the Commonwealth Environmental Water Holder”.

“The water purchase was consistent with commonwealth procurement rules and paid at a fair market rate, as informed by independent market valuation. Information about the purchase of the water is listed on AusTender, the department’s website and on the Senate website to produce documents.”

In a letter to the department secretary, Daryl Quinlivan, Burke said that, given its “unusual” decision to “insert itself in to the public debate”, it should back up its claims by making public documents relating to the sale.

The Greens leader, Richard Di Natale, said Labor needed to back the royal commission.

“Every single hard-working farmer whose livelihood depends on a healthy river system should be appalled at what has gone on here,” he told ABC on Monday.

The Centre Alliance senator Rex Patrick has also backed a royal commission, saying it is the only way to compel sufficient evidence to make informed judgments about the water buybacks.

Patrick also told the ABC he was “absolutely disturbed that the Australian government has been dealing with a company that is domiciled in a tax haven”.

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