Appendix IX.

Perth, 30th May, 1917. The Hon. Minister for Industries, Perth.

Sir,—The Commission duly received yours of the 17th November last relative to the water supply from the Goldfields Water Scheme in agricultural districts. At your request we report as follows:—

(1.) Extensions such as those to York, Beverley, and Toodyay are almost exclusively for purposes of town supply. As our instructions are only to deal with water supplies for agricultural purposes, we therefore make no recommendation in regard to these extensions at the present stage.

(2.) Dealing now with supplies for purely agricultural purposes, we find that the State has imposed a water rate of 4d. per acre on all agricultural land along the main pipe line in connection with the Goldfields Water Supply, from Northam to Burracoppin. This rate was imposed a few years ago, after many of the settlers had already supplied themselves with water, and was in some cases a hardship to those who really did not require the water.

(3.) We find that at the request of the settlers the Government had laid down East of Northam additional extensions off the principal main to supply the settlers in the back country.

(4.) We find the rates charged for water are as follows:—

(a.) To settlers on the main pipe line to Kalgoorlie, a holding fee of £5, plus rates ranging from 4d. in most cases to 5d. and 5½d. on one extension, per acre, for all holdings within 1½ miles of the main abutting thereon or situated within ten chains of the main at the nearest point. The water is charged to settlers at 2s. 6d. per thousand gallons. Settlers pay a meter rent of 10s. per annum in addition.

(b.) Settlers whose land abut on extensions or is situated at the nearest point within ten chains thereof are rated similarly, but, in their case, water is charged at 6s. to 8s. per thousand gallons—the latter rate being paid on one extension only.

(c.) Sundry settlers have contracted with the Department for the supply of water in certain areas under the guarantee system, for a defined number of years at varying prices.

(5.) We are assured by the Departmental officials that the water supply on agricultural extensions is supplied at an annual loss, without taking into account headwork expenses and head office charges for supervision and clerical work.

(6.) The extensions, we are told by the officials, are designed to provide only the water which the Department has contracted to supply if all the holdings were occupied and were consuming up to the value of their rates. Excess water, under such circumstances in the critical period of the year, could not be supplied by the Department in appreciable quantities.

(7.) Most settlers only use a portion of the water to which they are entitled. The amount of water which was available last year was 30,147,000 gallons, of which only 12,926,000 gallons were used. The total rates due to the Department for the same period were £9,048. Arrears of rates for the year ending 31st December, 1916, were £7,584; for the year ending 31st December, 1915, £3,215; and for previous years £2,819. The total arrears, therefore, are £13,618, of which the Department estimates that £3,000 are not recoverable.

(8.) It is quite clear that settlers originally urged the Government to provide them with Goldfields Water and that the Departmental engineers exhaustively discussed the cost of providing natural supplies from excavated tanks or wells—before deciding that Mundaring water would be the most satisfactory supply. The settlers were advised what the water would cost, and they freely contracted to take it on the Government's terms. There is now general dissatisfaction regarding the rates charged, and the majority of the settlers request reductions on the rates and price for the supply of water and from the extensions. It is a freely admitted that the settlers themselves originally asked for the water to be laid on, and they fully understood what the charges would be. Regarding the concessions required, the evidence varies. Some witnesses request reductions to as low as a rate of 2d. per acre and a charge for water of 2s. per thousand gallons, but as against this some witnesses would prefer to use the water at 6s. per thousand gallons in preference to being cut off. Other settlers regard the scheme, even at present rates and charges, as necessary insurance against drought. In some cases settlers request a classification of the land and a graduated scale of rating based on productive value. Lastly, we are advised by the Under Secretary for Water Supply that a body of settlers South of Merredin, notwithstanding the constant agitation of the last few years for reductions in the charge for Mundaring water, has, while we have been gathering evidence approached the Government for an extension to their district at the usual rates charged by the Department.

(9.) As the evidence varies, we are left to form our own conclusions, and therefore sum up the position as follows:—

(a.) There is no doubt that in many localities settlers who had embarked their all in taking up land which was either waterless or on which they had been unable to find water, were alarmed by dry seasons into asking the Government for water without due consideration of the cost.

(b.) A rate of 4d. per acre for good wheat land with water at 2s. 6d. per thousand gallons is not excessive. Settlers along the principal main, who do and can use the water, admit this.

(c.) With regard to the extensions, the same principle applies as on the principal main, viz., that the rate of 4d. per acre is not excessive to those who can use the water. With regard to the prices charged for water, viz., 6s. per thousand gallons, the case is different. Our opinion, fortified by our inquiries in other parts of Australia, is that 6s. water is an impossibility in terms as applied to the class of country served by the extensions.

(d.) Inferior country unfit for wheat growing, such as our poorer sandplain, can under no circumstances pay a rate of 4d. per acre and return a profit to the occupier.

(e.) On the extensions there are settlers who have not sufficient land cleared to pay from the land's production the State's charges for the annual C.P. instalments and water rates. Others, situated more than twelve miles from railways, are in a somewhat similar position. Until these men are more established, it should be policy to adjust their payments to their circumstances.

(f.) Some extensions carry a rate of over 4d. per acre with water at 6s. The country such extensions traverse cannot pay either such higher rate or price.

(g.) From a Departmental point of view, any concessions made will be a loss and a direct charge upon general revenue.

(h.) There are two ways of considering the price or rate for water supplied to agricultural districts:—

(1.) The first is the South Australian system, which provides reticulated water to the agricultural areas almost regardless of cost, relying on the indirect benefit to the community for its return. The Bundaleer and Beetaloo schemes, for instance, which cost over two millions sterling, only return a gross revenue of 1.57 per cent. towards interest, sinking fund, and depreciation. Another scheme, now authorised for the West Coast at a cost of £1,500,000, contemplates a return of less than one-half (10s.) per cent.