Pannell Discussions

No. 121, 17 March 2008

New environment policy "Caring for our Country"

The new national policy program for the environment and natural resource management has been announced. Details here. What has changed? Which changes are for the better? What is worse?

It is late 2000. I am at a national salinity conference in Bendigo, Victoria. The Australian Government has recently announced a new $1.4 billion program, the National Action Plan for Salinity and Water Quality. All the conference delegates are at a session where officers from the Government are outlining the program. In question time, I'm the first one with my hand up. I describe a few of the program's fatal weaknesses (Pannell, 2001a), and finish by predicting that, in seven years time, we'd look back at the program and say that it achieved almost nothing. Most of the audience is delighted, not because they agree necessarily, but because I've woken the place up. The speaker is dumbfounded. He manages to get out that I'm wrong because ... because ... well, because there is a lot of money in the program. At coffee break, reactions range from "good on you", to "you've made a big mistake", to "have you actually read the policy document?" (the latter from another Government officer).

Well, here we are at the end of the program, and we can safely say that it achieved almost nothing against salinity. There are some exceptions, but most of the money was spent on extension to promote practices that were not adoptable at the required scale, and poorly targeted small temporary incentive payments. In most cases, the changes in land management that were prompted were much too small to make a difference and/or were in the wrong places. The Australian National Audit Office reported recently that the program could not prove that it had made a difference (here). That's being polite.

On March 14, the new Government announced its program that is to replace both the salinity program and the Natural Heritage Trust. With this announcement, the fall of salinity as a high priority environmental policy issue in Australia is complete. The word "salinity" does not even appear in the new documents, except when they refer by name to the old program. Salinity has gone from having a major national program of its own, to being one fifth of the planned program under the previous government, to completely disappearing. Of course it will still be an issue that is addressed under other headings, but the change is still remarkable. 

It is probably an over-reaction. Salinity was and is an important problem. But it needed a program that was well designed and which considered the science and the human dimension well.

What about the new program, called "Caring for our Country"?

The announcement of the program was not a moment too soon for the 56 regional Natural Resource Management (NRM) bodies around the country, many of whom have been losing staff, facing financial stresses, and worrying about their futures as we approach June 30.

The regional bodies will be glad that the wait is over, but very unhappy with what has been announced. In PD#119 I suggested that a reduction in funding for regional bodies appeared likely, but the reduction is much greater than I expected it would be. The program includes core funding of $127 million per year for the regions, just over $2 million per region per year, on average. I think this is less than half of what they have been getting, on average.

Beyond that core funding, the regions are able to bid for funds to undertake specific projects determined by the government. From the regional perspective, a lot will hinge on how successful their bidding is. To secure funds that previously would have come straight to them, they will now have to compete with government agencies, local government, non-government organisations, universities, businesses and industry bodies.

This is hard on those regions that were performing well, but overall I think it is a very positive change. Hopefully the competition will drive all involved to lift their performances and allow us to target investments to achieve greater outcomes from the program budgets. There will be considerable transaction costs involved in the bidding process, but this should be more than compensated for by a better focus on outcomes.

A crucial question about this is not answered in the publicity materials: how will the new targets be selected? Some areas of investment have been announced, based on election promises. Now, elections are probably the worst possible times for making important decisions about funding, as political considerations dominate all others. Most of the Labor party's environmental promises hardly registered in the election campaign, but here they are as core elements of the new program, a grab bag of issues with political resonance:

  "rescue the Great Barrier Reef ($200 million)
  repair our fragile coastal ecosystems ($100 million)
  save the endangered Tasmanian Devil ($10 million)
  improve water quality in the Gippsland Lakes ($5.25 million)
  fight the Cane Toad menace ($2 million)
  employ additional Indigenous Rangers ($90 million)
  expand the Indigenous Protected Area network ($50 million)
  assist Indigenous Australians enter the carbon trading market ($10 million)"

I wonder where these amounts came from. Some of them look way too small to rescue, repair, save, improve or fight.

These promises plus the core funding for regions amount to about half of the program funding of $2.25 billion. How will investment targets for the rest of the money be selected? The publicity material makes much of a "business approach" and "value for money", but how will that be achieved? Will funds be targeted more tightly to achieve outcomes? How will policy mechanisms be chosen? How will science be used? How will the human dimension be considered? In short, what investment framework or decision framework will be used? We aren't told. There is a great opportunity to do better here, but it would also be easy to make a big step sideways, or even backwards given the risks of centralised decision making. 

A major problem in the past programs was that science was largely sidelined. Funding of science by regions to fill key knowledge gaps was discouraged, highly constrained, or absolutely prohibited, depending on which state you were in. In any case, the time frames for planning were too fast for science to play a sensible role. The use of science to provide improved technologies for environmental management was not recognised at all. Unfortunately, "science" is another word that doesn't appear at all in any of the documents for the new program. Perhaps it is implied within "business approach" and "value for money", but if so, that is worryingly obtuse. 

One of the fashionable areas of environmental policy in Australia has been economic policy instruments, known locally as market-based instruments (MBIs). Before the announcement I heard one fear expressed that the Government would be seduced by the MBI fad and would make them the cornerstone of the new program. Instead we got the opposite: no mention of MBIs at all. Perhaps the idea of using markets conflicts with the Ministers' ideologies (one, at least, is relatively left-leaning). I'm not unhappy about this outcome. Expectations about the benefits of using MBIs have been excessive for some time (Pannell, 2001b). They could perhaps still feature within some of the individual investments.

In one of the documents about the new program it says, "We expect that the regional bodies will be well placed to get a good proportion of the funding [to address centrally determined targets]." It will be interesting to see whether that turns out to be true. Some of the regional bodies act mainly as "middle men", channeling funds through to service providers such as consultants or state government agencies.  If the Australian Government knows its objectives, why wouldn't they contract directly with the providers? Regional bodies may try to do more things in-house, in order to capture a bigger share of the resources.

Another change from the previous programs is that there is no mention of matching state funding. Previously, state governments had to provide half the funds in order for national funds to flow to their states. If they are indeed stepping away from that approach, I think that is a positive change. The previous system meant that a huge proportion of the public funding eggs got placed in the regional NRM basket. In some cases, state funds were diverted from good programs into a very poor program. More diversity would have been better. If the matching-funds principle has been abandoned, considerable state funds could be freed up. An unintended consequence of that could be that state agencies are even more competitive against regional bodies in the battle for program funds.

With any program, the devil is in the detail. With the National Action Plan in 2000, just enough detail was released for it to be immediately apparent that it would not work. With Caring for our Country, it is much harder to tell. From what is public so far, there are grounds for hope, but equal grounds for concern.

David Pannell, The University of Western Australia,

Further Reading

Pannell, D.J. (2001a). Salinity policy: A tale of fallacies, misconceptions and hidden assumptions, Agricultural Science 14(1): 35-37. Full paper (26K)

Pannell, D.J. (2001b). Harry Potter and the pendulums of perpetual motion: Economic policy instruments for environmental management, Connections: Farm, Food and Resource Issues 1: 3-8. (39K)

Pannell Discussions are brief pieces on issues and ideas in economics, science, the environment, natural resource management, politics, and agriculture.

 120. The Landcare boom  3 Mar 2008

122. Effective environmental policy  24 Mar 2008

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Last revised: June 01, 2011.