Coalition Senators' Dissenting Report

Delivering Healthy, Working Rivers in the Murray-Darling Basin

Additional Comments: Environment and Communications Legislation Committee Water Amendment (Restoring Our Rivers) Bill 2023

1.1The Nationals and Liberal members strenuously support the extension of deadlines passage of this Bill would facilitate; however, after hearing all the evidence presented to this inquiry, we are of the opinion that without significant amendment, this Bill should not be supported by the Senate.

Introduction

1.2We believe the focus of the Basin Plan must be on delivering against the environmental outcomes, not merely volumes and for that reason, we are opposed to recovering the 450GL from the productive pool of water. We urge the Government to look at complementary measures, rules-based approaches, and off-farm measures to deliver the environmental objectives of the Plan.

1.3The Nationals and Liberals have reservations about some of the recommendations contained in the main Committee report but note the intent of many is to provide more transparency to the community about the ongoing implementation of the Basin Plan which is to be encouraged.

1.4The Nationals Liberal members do not agree with using open-tender buyback as a method for recovery of the 450GL, particularly in absence of an adequate social and economic impact assessment. Our members are inclined to believe economic modelling prepared for the Victorian Government and referred to by many witnesses about the negative impact of buybacks on our communities.

1.5The move to disregard the social and economic neutrality provisions from water recovered for the 450GL via additional held environmental water (HEW) is a shift away from the safeguards originally written into the Basin Plan in 2012 by the then Labor Government and which had not only bipartisan support but also the support of all Basin jurisdictions.

1.6We agree that any community assistance package must be directed into projects that produce and maintain jobs, but we do not agree with the recommendation requiring communities to demonstrate impacts. The onus must be on the Government to ensure there are no negative impacts and they develop a mechanism to monitor and assess social and economic conditions. We do not believe there is any form of community assistance that would adequately compensate for the jobs and industries that will be negatively impacted by the pursuit of the further 450GL from production.

1.7We do agree that there needs to be more accountability placed on State Governments to ensure projects proposed can be delivered and will achieve the outcomes sought and agree implementation schedule would be welcomed. We do not, however, agree that no further SDLAM projects should be accepted. We agree with the view of the NSW Government[1] and others that there are projects ready to be submitted once applications are open.

1.8Our members are open to looking at strengthening the provisions for First Nations values in the Water Act but agree with the Committee view that further consultation needs to be undertaken. We are of the view that the appropriate mechanism to consider this would be the Review of the Water Act scheduled for 2027.

1.9The Nationals and Liberal members of the Committee wish to thank all witnesses who travelled to Canberra to provide evidence to the Committee. We reiterate our frustration that the Committee did not see fit to travel into Basin regions to hear evidence from communities who will be impacted by the proposed reforms.

1.10We acknowledge time is a factor, however, we note that in the time this Inquiry has been established, the Coalition Backbench Committee on Agriculture was able to coordinate a three-state, five location tour across the Basin to hear from stakeholders from Queensland down to the Lower Lakes. The report from that tour formed the basis of our submission to this inquiry.[2]

1.11We further express our disappointment in the consultation process undertaken by the MDBA and the Department in preparing this Bill. Webinars, online surveys and invite-only sessions are woefully inadequate.

1.12The Nationals and Liberals have considered all the evidence provided to the Committee as well as reviewing all the submissions. We have come to the same conclusion as the NSW Irrigators’ Council who analysed submissions and found:

61 per cent of submissions overall do not support the Bill, rising to 79 per cent of submissions from within the Basin.

56 per cent do not support water buybacks, rising to 76 per cent of submissions from within the Basin.

68 per cent of submissions support socioeconomic impact conditions on water buybacks, rising to 84 per cent of submissions from within the Basin.

100 per cent of Murray-Darling Basin local government submissions oppose the Bill without amendment.

Most submissions support complementary measures to fix river health.[3]

Recommendations

1.13The Bill should be amended to ensure Basin Communities are not subjected to further unnecessary social and economic impacts by amending the Bill to:

Support extending the deadlines for the implementation of the Basin Plan.

Retain the existing Cap on Buybacks, noting there is still a significant volume available before the Cap ins reached.

Not enable open-tender buybacks to be used to recover volume to put towards the 450GL target.

Ensure all water recovered must meet the requirement to result in “neutral or positive social and economic impacts” as per the 2012 Basin Plan.

Broaden the definition for water recovery under the 450GL target to include rules-based changes or other projects to enhance fish-passage or connectivity.

Overview

1.14The clear and consistent message across the Basin and beyond is that while everyone wants a healthy and resilient river system, they also want economically resilient communities and they do not believe further water buybacks will deliver that balance.

[Former MDBA Chair] Craig Knowles said we need a healthy working river. At this rate we may end up with a healthy river, but it won't be working anymore." Ben Hassett, food producer, Renmark, SA.[4]

1.15Irrigated agriculture is a key mitigation tool in dealing with the extremes of climate change. It provides one of the best tools to cope with increasing droughts punctuated by flooding. Capturing water during flooding and using it to grow food and fibre during droughts is key to providing an economic base for many agricultural dependent communities and businesses.

1.16A healthy working river is more than just a flow, yet we have a Basin Plan that is a one trick pony with water recovery its only tool to improve environmental outcomes. Witness after witness highlighted that we need more than water recovery from the productive pool to ensure we have a healthy working river.

1.17The failure to engage with communities in the Basin has and will continue to lead to poor outcomes and conflict with the Water Amendment (Restoring our Rivers) Bill 2023 (the Bill), entrenching the division between a distant remote bureaucracy who, along with the government, have fundamentally failed to consult with and explain to communities what it is they are trying to achieve with the Bill.

1.18The Coalition Policy Committee on Agriculture, Water Resources, Drought & Environment did what the Government refused to and went to some of the most impacted communities in the Murray-Darling Basin (MDB) to speak to those directly involved. These communities have expressed their collective outrage that the Government believes a public webinar and an online survey constitutes extensive consultation.

1.19We heard from the Basin Community Committee (BCC), which is the legislated voice of the Basin Communities under the Water Act 2007, that their correspondence to the Minister had not received a response.[5] This was a constant theme amongst witnesses who raised concerns around the lack of detail about how the Government’s proposed Bill would work in practice.

1.20The Mayor of the Balonne Shire made it clear in her evidence that the consultation on water buyback tenders in her Shire was extremely poor and said:

…they gave the community five days’ notice. It was invite only to participate in the community consultation that they gave, and they refused entry to the public. So our community consultation that occurred in St George was only by irrigators. As a country mayor, as a mayor of a rural community, I'm here to represent all of the rest of my community… Those are the people that have not been consulted in any way shape or form.[6]

1.21Indigenous groups also expressed anger at the way they had been treated and their concerns had been ignored. This was graphically demonstrated by Ms Harriden, Research Fellow, Indigenous Water, Monash Sustainable Development Institute, Monash University who was asked about the Government’s recent consultation in June and July 2023 on the $40 million for Murray-Darling Basin Indigenous cultural water.

1.22Ms Harriden stated:

I recently ran a series of mob-only workshops around aqua nullius in the Murray-Darling Basin region. During that time, the roadshows about the $40 million by DCCEEW were being run. The department screwed it up, to be quite blunt. The mob I was dealing with were angry and disappointed, and a number of them stated quite clearly to me that they intended to withdraw from the process. The consultations were poor. Mob felt like they were having things thrown on them.[7]

1.23Both the Senate Committee and the Coalition’s Agriculture Backbench Committee heard from communities across the MDB that there are projects that can lead to good environmental outcomes that do not leave communities socially and economically vulnerable. Projects like the Murray Irrigation Limited[8] led project which has received $33.5 million to ensure environmental water can be better targeted and distributed to restore local creeks and wetlands – better mimicking the natural flow of water. The project will create additional irrigation escape structures to allow water to be delivered to target areas, install fish-friendly passageways, upgrade existing fences, and consider and evaluate further works. There were other projects such as the Healthy Coorong, Healthy Basin[9] infrastructure proposals which could be built to improve environmental outcomes whilst retaining water in the productive pool.

1.24One area where there was unanimous support was the need to extend deadlines to deliver the remaining parts of the Basin Plan. However not everyone supported doing this if it meant removing social and economic safeguards such as the 1500GL cap on buybacks, removing the requirements for the additional 450GL (efficiency measures) to only be recovered using infrastructure and requiring the recovery of that water to result in ‘neutral or positive social and economic outcomes’. The Nationals and Liberals will not support the Bill if there is no cap on buyback.

1.25The water market reform section of the proposed Bill was supported by witnesses. However, the decision by the Government to push much of the key details into subordinate regulations which could be years away from being finalised meant there were concerns around exactly what was being proposed or how it would work in practice. These concerns have been raised by the Scrutiny of Bills Committee as well.

1.26Many submissions raised concerns about the social and economic impact of previous buybacks particularly in intensive irrigation communities including Dirranbandi in Queensland and the Central Irrigation Trust in South Australia.The Victorian Farmers Federation pointed out:

There is overwhelming evidence from multiple sources that the 450GL cannot be recovered without causing social and economic harm.[10]

1.27Many of the witnesses to both the Senate Inquiry and the Coalition’s Agriculture Backbench Committee hearing expressed a strong desire for the Government to release more information about the social and economic impact of water buybacks on both their local and the wider communities, including issues like the cost of living and tipping points for industries and water delivery companies.

1.28The refusal by the Government to release its water recovery strategy so communities could understand what the impact would be and what environmental outcomes were being sought was a constant theme, with very few witnesses able to enunciate which constraints needed to be removed or from where water needed to be recovered. Of particular concern was the failure of the government on such a fundamental change to the Basin Plan to release a Regulatory Impact Statement.

1.29Two key issues highlighted by the Mayor of Campaspe Shire Council Councillor Adrian Weston, were the desire by communities in the Basin who:

…want to see that the accomplishments and achievements that have been achieved during the 15- or 20-year journey of water recovery, including what got recovered before the plan, is acknowledged—particularly that the hard work done at the grassroots level by local government and communities is acknowledged. Secondly, we want to see a focus on outcomes. We're done hearing about numbers; we want to see a healthy environment and we want the focus to be on outcomes.[11]

1.30In relation to outcomes, we heard there have been some excellent outcomes, as the Victorian Farmers Federation pointed out in their submission:

In 2020 the Commonwealth Environmental Water Holder, Jodi Swirepik, stated that getting more water for the additional 450GL was not her priority. She noted the environmental gains to date in a Senate Estimates hearing on 23rd October 2020: “Even in the record-breaking drought, environmental flows have provided positive outcomes across the basin. For instance, this year marks 10 years of continuous flows into the Coorong since the breaking of the millennium drought in 2010. This means that the Basin Plan has worked as the recent drought did not result in the same terrible impacts and the risk for the end of the river system.”[12]

1.31Similarly, the Leeton Shire Council expressed concern about the negativity surrounding the implementation of the Basin Plan stating:

We find it disappointing that Government frequently refers to the Basin Plan as having failed. The reality is that a significant amount of water has already been recovered for the environment (4 Sydney Harbour equivalents – or 2100GL of the planned 2750GL), plans are afoot for SDLAM projects (with new options waiting in the wings), and many reports in recent years from the CEWH and regional EWAGS (Environmental Water Advisory Groups) celebrate significant improvements in natural habitats and species breeding.[13]

Key Recommendations

1.32Support extending the deadlines for the implementation of the Basin Plan.

1.33Support for the extension of deadlines was a key issue for witnesses before both the Senate Inquiry and the Coalition Backbench hearings. There was widespread support for the deadlines being extended.

1.34Witnesses such as Mr Holm from the National Farmers Federation made it clear extensions were needed saying:

We went through a period of two to three years of COVID where no-one could really do anything. We've just gone through a period of three years of flooding where, again, it's pretty hard to get big earthmoving gear and stuff in to do things.[14]

1.35The Victoria Farmers Federation in its submission said:

…is pleased to see reforms that extend the deadlines for the Sustainable Diversion Limit Adjustment Mechanism (SDLAM) projects and (additional) 450GL.[15]

1.36The Wentworth Group of Concerned Scientists were also supportive of more time, with Professor Pittock informing the Committee:

…We do support the thrust of the restoring our rivers bill … as well as providing more time to achieve that, and measures to improve socioeconomic outcomes.[16]

1.37In its submission the Australia Dairy Industry Council (ADIC) said it supports ‘the extension of timeframes for implementation of projects under the Basin Plan’ and made the point that:

Almost all major Basin Plan reviews have flagged that projects are behind schedule, and recent flooding, COVID and inflationary pressures have exacerbated delays.[17]

1.38However, ADIC said whilst the extension of timeframes is necessary, it ‘should NOT be contingent on also increasing buybacks.’[18]

1.39Retain the existing Cap on Buybacks, noting there is still a significant volume available before the Cap ins reached.

1.40Most of the submissions to the Senate Inquiry and witnesses at the Coalition’s Backbench Inquiry held within basin communities echoed the Australian Dairy Industry Council’s submission comments:

…not support further buybacks from the consumptive pool unless they can progress without negative social or economic impacts. Subsequently, the ADIC does not support any proposal to remove the 1500GL cap on buybacks.[19]

1.41There is a genuine fear that the Commonwealth Government is being disingenuous when it says that general tender water buybacks are not its preferred option to recover the additional 450GL and it is looking at all infrastructure options, yet proposes remove the 1500GL cap, which has not yet been reached. After the 46GL tender to finalise the ‘bridging the gap’ water, there will still be 225GL of water available to be bought back under the 1500GL gap.

1.42South Australia’s Central Irrigation Trust (CIT) made it clear they do not support the South Australian government’s view that there will be no social or economic impacts from buybacks and stated in their submission:

…(CIT) does not support the change to remove the 1500GL limitation on water purchases...The negative impacts from buy backs on food and fibre production and increased prices will flow through to everyday Australians already struggling with cost-of-living pressures and to the export income generated by the Australian irrigated agricultural sector.[20]

1.43Coleambally Irrigation Co-operative Limited stated in its submission to the Inquiry:

The most important change the Inquiry can make is to recommend Part 3 – Purchase Cap, 14 Division 5 of Part 2 is not repealed...This would reinstate unchanged the Division 5 1500GL on water purchases in the Water Act 2007. This change would ensure the Government will be required to explore “all options” for delivering the Basin Plan and impose an accountability on the Government, to minimise the social and economic impacts of water recovery, which is absent from the Government’s Bill.[21]

1.44Local governments were also vocal in their opposition with the Riverina and Murray Joint Organisation made up of eleven councils along the Murray and Murrumbidgee Rivers in NSW stating:

Changing long understood Basin Plan mechanisms to provide water for the environment by both removing the 1500GL buyback cap and allowing 450GL efficiency water to now be bought back, without those buybacks being subject to the socio-economic neutrality test, may drive uncertainty and hardship in local communities (farmers, industries and workforce).[22]

1.45Opposition to removing the 1500GL cap on water buybacks was widespread across the MDB. The Narrabri Industrial Network Inc. made it clear:

...by limiting options and removing socio-economic protections, such as the 1500GL Cap on buybacks, the bill exposes Basin communities to an unknown volume of buybacks, an insecure water supply for production, and a highly uncertain future.[23]

1.46Ensure all water recovered must meet the requirement to result in “neutral or positive social and economic impacts” as per the 2012 Basin Plan.

1.47Numerous submissions and witnesses to both the Senate Inquiry and the Coalition’s Agriculture Backbench Committee highlighted the Bill represents a move away from the bi-partisan support for the 2012 Basin Plan. This support was premised on the words of both the then Prime Minister, Julia Gillard and Minister for Water Tony Burke who made it clear that the additional 450GL of water could only be recovered if it resulted in ‘neutral or positive social and economic outcomes.’

1.48In a media release, Returning the Murray-Darling Basin to Health issued on 26October 2012, then Prime Minister, Julia Gillard stated:

The Gillard Government has today resolved to provide $1.77 billion over ten years from 2014 to relax key operating constraints and allow an additional 450GL of environmental water to be obtained through projects to ensure there is no social and economic downside for communities.”[24]

1.49In his Second Reading Speech to the House of Representatives on the Water Amendment (Water for the Environment Special Account) Bill 2012, then Water Minister Burke stated:

Importantly, the plan being proposed by the MDBA stipulates that additional (450GL) water … only be acquired through methods that deliver additional water for the environment without negative social and economic consequences such as infrastructure.[25]

1.50Mr Burke, as the then Water Minister speaking on ABC Country Hour in October 2012, left no-one in any doubt as to what the Basin Plan was about when he said:

The rule is it (additional 450GL) can only happen through methods that have no downside, social or economic. So that’s the rule. And that’s why none of this money could be used for general tender buyback rounds or anything like that, because the Authority’s reached a very strong conclusion that if you did it through a general buyback, you do get downsides for the local community.[26]

1.51To ensure there was no doubt, two notes were inserted into the Water Act 2007 (Part 2AA, s86AD) to make it clear that water could only be recovered for the additional 450GL via infrastructure projects and not through general tender buybacks. This Bill proposes to delete those notes. We propose the retention of the note to ensure:

The Commonwealth will not conduct open tender rounds that are available to all water access entitlement holders in a water resource plan area to purchase water access rights.[27]

1.52In 2018, the Ministerial Council agreed on a socio-economic criteria test which does not preclude projects being approved. It does add a layer of transparency and community consultation to ensure proposals really do have a neutral or positive social and economic outcome.

1.53We note the submission from the Lower Balonne Floodplain Association (LBFA). The LBFA recently tendered licences to the recent Bridging the Gap tender, mainly to focus attention of the Government on this opportunity to recover 16GL of water, which comes from willing sellers, removes the risk of development on low flow connectivity and protects the existing and future recovery in the Condamine Balonne and Warrego systems in Queensland. This is an example of a proposed water buyback that if subjected to the social and economic test could provide a very good example of a strategic water buyback that does pass the social and economic neutrality test whilst delivering an excellent environmental outcome.

1.54There was some confusion by some academics who gave evidence around how many jobs would be lost if buybacks resulted in irrigation farms being dried off and converted into dryland farms.

1.55When Malcom Holm, a dairy farmer giving evidence with the National Farmers Federation was asked the difference between an irrigated enterprise and a dryland enterprise, and given farmers get compensated for the water they sell what do water buybacks mean in the broader community, he responded by saying:

I'll use our place as a bit of a case study, if you don't mind. Our dairy farm is about 600 hectares. We employ about 12 people including ourselves. Dairy Australia tells us we employ another 12 people in the supply chain somewhere else. My guys have just about finished milking, hopefully. We're employing 24 people directly plus the services. I've got something in at the engineers at the moment getting fixed, and something else happened this afternoon. All that is happening. My neighbour—their place used to be irrigation—sold out. It's dryland cropping. If our place got converted to dryland cropping I reckon you could run it with less than a person.[28]

1.56The impact on MDB communities of water buybacks must take into consideration the effects on the broader community.

1.57The ongoing impacts of communities was highlighted again and again with the local government panel giving evidence of the impact that previous water buybacks had had on their towns with the Mayor of Balonne, Mayor O’Toole stating:

For our communities it's had a very significant impact, in that we've had a significant loss in the irrigation area, hence job loss. In Dirranbandi, as an example, 15 per cent of all the jobs that were available within that community previously were lost. That is reflected in the school numbers, which halved over the period of time that the water recovery was occurring. In St George, we had a loss of 20 per cent of all jobs in our communities. Those are real jobs. They are not confined to on-farm. They are the chemists, the grocery store, people that own hairdressers—average, everyday businesspeople in our community that have been impacted by water recovery.[29]

1.58The Chair of the Country Mayors Association, Mayor James Chaffey stated:

…a loss of around 200 direct jobs from the Narromine Shire from the first round of water recovery, which has had a roll-on impact within that community with the loss of other retailing and businesses. Just next door in the Warren Shire, 200 direct jobs have also been lost, which they equate to 500 people leaving that shire. It's quite devastating for such a small community.[30]

1.59When questioned if the Mayors were blaming buybacks for all of those job losses or could they split the job losses up such as attributing it to changes in markets; other shifts like mechanisation, the millennium drought; or commodity prices and whether they had some data for that, Mayor O’Toole responded by saying:

But, if you look at the Murray-Darling socioeconomic study that was done in 2016 by Phil Townsend, one of the painstaking things that he did as part of that process was pick that all apart: What does cotton mechanisation do to reduce employment? How do some of the other complex things that are happening in rural communities contribute to population increase or decrease? And what is the true impact of just the water purchasing? The figures that I quoted in the job losses in Dirranbandi and St George are specifically out of that study that he did.[31]

1.60The Productivity Commission’s Interim Report: Murray–Darling Basin Plan: Implementation review 2023 made it clear there were socio-economic impacts of water buybacks despite some academics arguing that was not the case:

Water purchased by the Australian Government to meet commitments under the Basin Plan has had negative socio-economic impacts on some Basin communities…there have been negative socio-economic flow-on effects in some small irrigation-dependent communities, particularly following major irrigators selling large parcels of entitlements. Some Basin communities saw agricultural employment fall rapidly, without offsetting growth in other employment areas (the negative effects have only been slightly tempered by improvements to tourism resulting from improved ecological outcomes).

The size and speed of water purchases also appears to influence whether communities adapt relatively quickly (through other economic development and diversification) or experience more severe and lasting economic disruption.[32]

1.61Key food processors and manufacturers who gave evidence to the Committee were very concerned about what a future will with less productive water would do to the largest manufacturing sector we have left in the country.

1.62The Chairman of SPC Global Ltd, Mr Hussein Hani Rifai told the Committee:

Any imbalance in supply and demand, especially in a way that would affect the quantum of supply, is bound to raise the prices of water. When that happens, it is obviously going to impact significantly on our prices, which go to the consumer. Frankly, that could put our business, as well as the businesses of the farmers that we buy from, at risk. We are already at a cost disadvantage for a variety of other reasons—this will just add to our disadvantage in terms of competing against cheap imports coming in from everywhere from China to Italy.[33]

1.63The Frontier Economics report undertaken for the Victorian Government found that ‘[i]f an additional 760GL in total (372GL for ‘Bridging the Gap’ plus 388GL for Efficiency Projects) were to be recovered via buyback, in line with the CEWH’s existing portfolio, the average annual cost in foregone production would be over $850 million per year. It would also result in an extra 17 500 hectares of high-value horticulture being dried off in a repeat of the Millennium Drought.’[34]

1.64It wasn’t just job losses which were of concern to basin communities. South Australia’s Central Irrigation Trust gave evidence which showed that irrigation water delivery schemes were particularly vulnerable to what is known as the ‘Swiss cheese effect’:

We have a lived experience of the Swiss cheese. We have a lived experience, which we're still living now 12 years after it occurred. We lost 180 farms across our network in no planned way. They left, and those that remained had to pick up the additional costs and will continue to pick that up into the future.

In certain of our districts, if we have a sufficient number of the irrigation community leave—if we think about it like this: 97 per cent of the water we supply goes to irrigation, so it's by far the largest volume, so they pay the largest share of the cost to augment the ability for us to provide services to other parts of the community…As we've said to the South Australian government, if the buyback is unstrategic, given the economic conditions, which I know other presenters have spoken about today, that are impacting us in South Australia, and particularly the region I am in, it will leave those customers of ours who have no particular interest in irrigation on property themselves with an inability to have a water supply to their homes.[35]

1.65And concerns were not just reflected by the irrigation sector. Basin Community Committee Indigenous Member, Mr Feli McHughes, stated in his submission:

I know a lot of local councils and farming groups talk about the socio‑economic impacts of buybacks, but I think it’s time decision-makers realise that this hits our people too in these communities. We are part of these communities too. I’d say, it probably hits us the hardest. I am very concerned that buybacks will further spiral our peoples in these communities into poverty.

When Governments talk about buybacks, there is a lot of focus on the seller, but we need to look at the community. They are the ones who really feel the impacts. The farmers can sell up, the farmers can move elsewhere, and the money can go elsewhere too. But our people can’t, not the most of us. Our peoples have a connection to our country, and we can’t just leave.[36]

1.66The last word for the need for the social and economic neutrality test to be retained should go the Murray-Darling Basin Ministerial Council who made it clear in 2012 that the joint government agreements to support the SDLAM agreed to recovering additional water in ways that ensure neutral or beneficial socio-economic outcome.[37]

1.67 The Commonwealth Government’s proposed Bill fundamentally alters the agreement made between Ministerial States and the Commonwealth when the Basin Plan was agreed into in 2012. In 2012 there were three Labor Ministers and three Coalition Minister. The amendments being pursued in the Bill do not reflect the Basin Plan that communities believe they were signed up to with bipartisan support.

1.68Broaden the definition for water recovery under the 450GL target to include rules-based changes or other projects to enhance fish-passage or connectivity.

1.69The Murray-Darling Basin, particularly the Southern Connected MDB, is one of the most modified river systems in the world and the Basin Plan will not, nor is it designed to, return to a pre-1788 level of development. The modifications to the river system via head-water storages, weirs, locks, levy banks, roads, railway lines, channels etc are not going to be removed; however, they do provide river operators with tools to manage the riverine environment.

1.70The Commonwealth Environmental Water Holder, the Living Murray Program and state-based e-water holders and managers are in essence ‘irrigators’. The water entitlements they hold have the same characteristics as those recovered from irrigators. Coupled with planned environmental water, environmental water holders should be able to improve the productivity of environmental water just as farmers have year on year.

1.71The overarching objective for environmental water holders and managers should be to increase the productivity of environmental watering events to maximise environmental outcomes to as one former senior water bureaucrat eloquently put it “just as farmers have the mantra of ‘more crop per drop,’ we need to breed more frogs per drop”.

1.72Simply focusing on water recovery will not improve environmental productivity. We know that through the modification of our river systems which underpins our civilisation, we have created issues such as thermal pollution, fish movement blockages, removed instream habitat, introduction of feral animals such as carp and weeds which are all impeding the improved environmental recovery.

1.73We need to include both rules-based changes and what are known as complementary measures to count towards water recovery under both the supply measures and the additional 450GL. These environmental degradation drivers cannot be fixed by just adding water.

1.74Indeed, the NSW Government submission proposes expanding the 450GL target to include alternate measures over and above simple licence transfer:

Rules based changes arguably provide greater environmental protections than purchasing licences. In combination with rule changes, there are broader projects such as changing infrastructure to support fish movement that will help reduce the extent of major environmental disasters like the recent mass fish deaths at Menindee.[38]

1.75There should also be consideration of allowing the Commonwealth Environmental Water Holder to utilise other market mechanisms to meet the targets such as temporary trade and or lease products. This option was agreed by Professor Sarah Wheeler who told the committee:

I am a big supporter of the Commonwealth entering the temporary market, and I think another thing they could do is think about long-term leasing—buying permanent entitlements from farmers but then providing a long-term lease back to that farmer. Whether it's three or five years, that is another way I think could be quite effective. If we're only concentrating on voluntary sales, that would bring in additional irrigators who would be willing to do that. We know from our surveys—we've surveyed thousands of irrigators—they're much more willing to sell temporary water to the Commonwealth than permanent water.[39]

1.76In giving evidence to the committee, Dr Lee Baumgartner from Charles Sturt University’s Gulbali Institute said:

it’s important to note that we're dealing with a modified system. When you're dealing with a modified system, there are a range of different solutions that can be applied…

…the first point I'd make is that, yes, the water is important, but it's appropriate that the water is of good quality. That's what has led to some of the issues we've seen, particularly with the fish deaths. Adding more water that's not of good quality won't provide any outcomes for anyone.[40]

1.77When Dr Baumgartner was asked about his work on the Lower Darling fish kill panels he pointed out:

What the recommendations of the [NSW] chief scientist's report were trying to say was that water is like the thread that connects all the elements of the river together that make it healthy. …. You can provide an environmental flow for fish which stimulates fish migration and spawning events, but if those fish are blocked by a weir you may not get the benefit; you actually have to get the fish past the weir to access the spawning habitat. That's where those additional measures become important. The fish need to be able to access good habitat for their nursery, and that's where the Menindee Lakes come into it. That's one of the most important nursery habitats for fish in the Darling/Baaka.[41]

1.78The Chief Executive Officer of the One Basin CRC, Professor Stewardson, told the inquiry that complementary measures get better outcomes:

It's not necessarily a one-size-fits-all, black-and-white version of the basin—that's never valid. A packet of water—a megalitre of water in a dam—which can be actively managed and released at the right time can have enormous benefits, and a megalitre of water that can't be delivered because of a constraint, for example, to achieve the target won't have any benefit. I actually think there's some subtlety around the environmental utility of different volumes of water. That's one of the reasons why I made the comment about the benefit of thinking through the volumetric equivalence in the way that the water is considered under the Basin Plan, because it reflects the purpose that water is intended to achieve. It's not simply the volumetric target but that we're trying to achieve specific outcomes with that water.[42]

1.79The Basin Community Committee Indigenous Member, Mr Feli McHughes, in his submission called for ‘a paradigm shift from Governments’:

I have developed the award-winning methodology of Cultural Billabong Restoration, which works together with farmers and landholders, to restore billabongs and riparian land, by employing the most disadvantaged in our communities. I have seen how this culturally appropriate employment helps heal country and heal mob…

But governments don’t seem to care about water quality, only quantity. This Bill continues to take a very siloed approach to this resource, and not look at how it fits within the landscape. If we are serious about looking after our Basin, we need to look much further, and consider how it interacts with our lands and peoples. This Bill does not do that.[43]

1.80Professor Pittock from the Wentworth Group of Concerned Scientists told the Inquiry:

I've been a great proponent of the so-called complementary measures throughout my career—things like building fish ladders and fixing the cold-water pollution from dams. They are essential elements of what we need to do to achieve good environmental outcomes.[44]

1.81The failure of the Government to include both rules-based changes and what are known as complementary measures to count towards water recovery under both the supply measures and the additional 450GL needs to be rectified as these environmental degradation drivers cannot be fixed by just adding water.

Senator Perin Davey

Substitute Member

Senator Hollie Hughes

Member

Senator Ross Caddell

Participating Member

Footnotes

[1]NSW Government, Submission 55, p. 2.

[2]Coalition Backbench Policy Committee on Agriculture, Environment and Water, Submission 114.

[3]NSW Irrigators’ Council, Listen up, Canberra: MostSenate submissions oppose Basin Plan legislation, Media Release, 31 October 2023.

[4]Coalition Backbench Policy Committee on Agriculture, Environment and Water, Submission 114,p.2.

[5]Ms Rachel Kelly, Chair, Basin Community Committee, Proof Committee Hansard, 31 October 2023, p.40.

[6]Mrs Samantha O’Toole, Mayor, Balonne Shire Council, Proof Committee Hansard, 31 October 2023, pp. 89-90.

[7]Ms Kate Harriden, Research Fellow, Indigenous Water, Monash Sustainable Development Institute, Monash University, Proof Committee Hansard, 1 November 2023, p. 12.

[8]The Hon Tanya Plibersek MP, Minister for the Environment and Water, Water infrastructure working to better deliver for the environment, Media Release, 2 November 2023.

[9]Government of South Australia, Department for Environment and Water,Coorong Infrastructure Investigations Project, accessed 9 November 2023.

[10]Victorian Farmers Federation, Submission 73, p. 4.

[11]Councillor Adrian Weston, Mayor, Campaspe Shire Council, Proof Committee Hansard, 31 October 2023, p. 91.

[12]Victorian Farmers Federation, Submission 73, p. 11.

[13]Leeton Shire Council, Submission 14, p. 1.

[14]Mr Malcom Holm, National Farmers’ Federation, Proof Committee Hansard, 31 October 2023, p. 78.

[15]Victorian Farmers Federation, Submission 73, p. 11.

[16]Professor Jamie Pittock, Member, Wentworth Group of Concerned Scientists, Proof Committee Hansard, 31 October 2023, p. 39.

[17]Australian Dairy Industry Council, Submission 22, p. 6.

[18]Australian Dairy Industry Council, Submission 22, p. 6.

[19]Australian Dairy Industry Council, Submission 22, p. 7.

[20]Central Irrigation Trust, Submission 41, p. 2.

[21]Coleambally Irrigation, Submission 69, p. 1.

[22]Riverina & Murray Joint Organisation, Submission 119, p. 1.

[23]Narrabri Industrial Network, Submission 117, p. 2.

[24]Prime Minister Julia Gillard and Minister for the Environment Tony Burke, Returning the Murray-Darling Basin to Health, Media release, 26 October 2012 (emphasis added).

[25]Minister Burke, Minister for Sustainability, Environment, Water, Population and Communities, Second Reading Speech, Water Amendment (Water for the Environment Special Account) Bill 2012, 31 October 2012, p. 2.

[26]Minister Burke, ABC Country Hour, 26 October 2012.

[27]Water Act 2007, Section 86AD.

[28]Mr Malcolm Holm, Water Committee Chair, National Farmers Federation, Proof Committee Hansard, 31 October 2023, p. 79.

[29]Mrs Samanatha O’Toole, Mayor, Balonne Shire Council, Proof Committee Hansard, 31 October 2023, p. 87.

[30]Mr Jamie Chaffey, Chairperson, Country Mayors Association of New South Wales, Proof Committee Hansard, 31 October 2023, p. 88.

[31]Mrs Samanatha O’Toole, Mayor, Balonne Shire Council, Proof Committee Hansard, 31 October 2023, p. 89.

[32]Productivity Commission, Murray-Darling Basin Plan: Implementation review 2023: Interim report: Overview, p.15.

[33]Mr Hussein Hani Rifal, Chairman, SPC Global Ltd, Proof Committee Hansard, 1 November 2023, p.43.

[34]Frontier Economics, Social and economic impacts of Basin Plan water recovery in Victoria, 5-year update for Victorian Department of Environment, Land, Water and Planning, 31 August 2022, p. 10.

[35]Mr Greg McCarron, Chief Executive Officer, Central Irrigation Trust, Proof Committee Hansard,31 October 2023, p. 95.

[36]Mr Feli McHughes, Submission 48, p. 1.

[37]Murray-Darling Basin Authority, Murray-Darling Basin Ministerial Council communique,30 November 2012 (emphasis added).

[38]NSW Government, Submission 55, p. 4.

[39]Professor Sarah Wheeler,Proof Committee Hansard, 31 October 2023, p. 60.

[40]Dr Lee Baumgartner, Proof Committee Hansard, 31 October 2023, p. 60.

[41]Dr Lee Baumgartner, Proof Committee Hansard, 31 October 2023, p. 60.

[42]Professor Michael Stewardson, One Basin CRC, Proof Committee Hansard, 31 October 2023, p. 86.

[43]Mr Feli McHughes, Submission 48, p. 2.

[44]Professor Jamie Pittock, Wentworth Group of Concerned Scientists, Proof Committee Hansard, 31October 2023, p. 56.