The pending El Nino weather system, which usually heralds lower rainfall and higher temperatures in eastern Australia, is a timely reminder that governments should be investing more in the State’s water security, according to Business SA chief executive Nigel McBride.

McBride said the peak business lobby welcomed the Federal Budget provisions that will allow primary producers to immediately deduct capital expenditure on such water facilities as dams, tanks, bores, irrigation channels, pumps, water towers and windmills.

The accelerated depreciation incentives for farmers will apply from 1 July next year and replace the former arrangements where such investment could be written off over three years.

But McBride added: “While this may assist some farmers, particularly to ensure adequate water supplies for stock, it will not solve the bigger picture of providing greater water security for South Australia’s vast horticulture and viticulture sectors.”

In a recent submission to the State Government on its Draft Murray Allocation Plan, Business SA endorsed the proposal to operate Adelaide’s desalination plant before water allocations to irrigators were reduced.

“However, there needs to be full transparency from the State Government on all fixed and variable costs of running the desalination plant before there can be a discussion on how to apportion those costs,” McBride said.

Water security for the Clare Valley’s grape growers is also of concern to Business SA and despite proposals being put forward by the State Government, the Federal Budget did not allocate any funding to upgrade the existing dams of Bundaleer, Baroota or Beetaloo.

“If we are serious about boosting SA’s exports of goods and services like wine and tourism, we need to get serious about ensuring the water security which is the foundation of both,” McBride said.

“Although the current May to July outlook suggests much of Australia is likely to be wetter than average, the Bureau of Meteorology expects El Nino to become the dominant influence on Australia’s climate during the second half of the year.

“This is a timely reminder for the State Government to revisit the water security needs of the rural sector to ensure that when SA enters its next drought, the economy doesn’t disappear along with the rain.”

Business SA has thrown its support behind the State Government’s calls for a major upgrade of the Bolivar treatment plant to deliver an additional 20 gigalitres of reclaimed water for use in the horticultural sector.

The State Government has asked the Federal Government to fund the $170 million needed to install a new pump-filtration plant as well as pipelines and storages, an investment which it says would increase Gross Value of Production on the Northern Adelaide Plains by around $250 million each year.

“Business SA is very mindful of the contribution of agriculture and associated food and beverage manufacturing to South Australia’s economy. In 2013-14, these sectors combined contributed approximately 8 per cent to State Gross Product and more importantly accounted for 48 per cent of South Australia’s merchandise export revenue,” McBride said.

“At a time of depressed mineral and oil prices, SA’s export fortunes really do hinge on the capacity of farmers to supply export markets,” he said.

Meanwhile, the fact that South Australia is well served with high quality research and policy advice was confirmed last week when the Goyder Institute for Water Research received the Australian Water Association’s National Research Innovation Award.

A partnership between the SA Government, the CSIRO, Flinders University, University of Adelaide and the University of South Australia, the Institute was established five years ago to deliver expert scientific advice to the Government to help shape policy and decision making.