Federal budget defers HIPCo, Hughenden off-stream water storage funding

Hughenden Irrigation Project chair Jeff Reid said the funds they were hoping for had been deferred, with more bureaucratic hurdles to go through.

"We'd spent $10m on a detailed business case, and the next round is about pre-construction planning - an environmental impact statement, the design and so on - that would be $28m in total," he said.

"Last night assured us the $170m is still there, we haven't been knocked on the head.

"We're not popping the champagne yet but we're still alive.

"Building dams is not always popular in this environment so we're going OK."

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The Flinders Shire Council had hoped for $25.6m in matching funds from the federal government in the budget, for its off-stream water storage, but has been told by federal environment minister Tanya Plibersek to keep communicating with the federal government and go back to the drawing board to expand on the list of beneficiaries from the project.

"Since we wrote the plan, all the renewable energy projects, including Copperstring, have been announced, so water's even more important now," Flinders mayor Jane McNamara said.

"I've been using the analogy that Hughenden's recreational lake money was allocated on the third application - the application for assistance for the water storage is our first one.

"It's an ongoing process you have to go through.

"In the meantime, we're extremely happy that the state government has supported our water project."

The future of the $240 million Granite Belt Irrigation Project (GBIP) is up in the air following the release of the federal Budget.

According to the papers, the federal government will achieve savings by "not proceeding" with $162.5 million over seven years from 2022-23 for the Emu Swamp Dam and pipeline project, which is "being reconsidered against alternative options" as part of the regional water assessment (RWA).

"The current feasibility and business case work is insufficient and cost estimates have increased substantially since the initial proposal," Federal Water Minister Tanya Plibersek said.

"Our government and the Queensland government are working together to identify viable water security options for the Stanthorpe region."

National Party leader David Littleproud and Nanango MP Deb Frecklington took aim at the federal government, saying the funding had been scrapped.

About 50 local irrigators and the Southern Downs Regional Council have said they would commit $23.4 million to construction, while the Queensland government has committed $13.6 million.

On Wednesday, Queensland Water Minister Glenn Butcher said the state was still assessing the project.

In December, he said the estimated cost for the project had recently increased to more than $240 million; much more than the original $84 million price tag and said "it's important to remember, funding hasn't been cancelled, only deferred while all options for water security in the region can be determined..."

This week's announcement comes after the Albanese government put the $162.5 million contribution on the back burner last October.

Following that, the Palaszczuk government announced in November the project would be moved to the RWA.

The RWA provides a stakeholder forum in which to confirm the Granite Belt's future water needs and explore the merits of any alternative options.

The project aims to deliver a 12,000ML dam at Emu Swamp, south west of Stanthorpe, and 126km of pipeline.

The business case for the GBIP originally proposed an irrigation only project, but the Queensland government was advised in October 2021 that the project was configured to also increase storage capacity for urban supply for Stanthorpe by 85pc.

A GBIP spokesperson said while the budget announcement was disappointing, it pointed the finger at the state.

"The federal budget is a disappointment to the project and the people of Stanthorpe," they said.

"The lack and cost of irrigation water significantly contribute to the high cost of living to Queenslanders through higher fruit and vegetable prices.

"The current Regional Water Assessment process is still a long way from being finalised, yet as regions know we are closer to the next drought.

"The previous Australian government made funds available to build this dam, it's the Queensland government that has stalled the process and continues to stall the process."

Stanthorpe ran out of potable water during the last drought and the Queensland government spent over $13 million carting drinking water to the town.

Local irrigators were paying $20,000/ML for water to be carted to farms to keep fruit trees and crops alive to fulfil contracts with major suppliers.

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