Additional comments by Senator Nick Xenophon
Water Amendment (Water for the Environment Special Account) Bill 2012
The Prime Minister’s announcement of 26 October 2012 that an
additional 450 gigalitres (GL) of water is to be returned to the Basin during the
period 2014-2024 can potentially bring about significant improvements in the
health of the River Murray. However, this potential is limited due to a number
of constraints and ambiguities in the Water Amendment (Water for the
Environment Special Account) Bill 2012 (the ‘Special Account Bill’).
No guarantee 450GL will be delivered
According to the current wording of the Special Account
Bill, enhanced environmental outcomes will be achieved by "increasing the
volume of the Basin water resources that is available for the environmental use
by up to 450 gigalitres" (emphasis added).[1]
Mr Rob Fowler, President of the Conservation Council of
South Australia, expressed the inadequacy of this wording:
The 450 gigalitre object is not framed in a way in the bill
which provides any assurance or guarantee that it will in fact be delivered. It
is not even framed as an object of the bill; it is simply framed as one means
of achieving the broader objects of the bill.[2]
Recommendation 1
Clause 86AA(3)(b) of the Water Amendment (Water for the
Environment Special Account) Bill 2012 be amended so as to ensure 450
gigalitres is a minimum amount rather than a maximum amount to be returned to
the environment.
Purposes of the Water for the Environment Special Account
Clause 88AD of the Special Account Bill sets out the
purposes of the Water for the Environment Special Account and lists the
different types of activities eligible to receive payments from the $1.77
billion fund. These activities include improving the water efficiency of
irrigation infrastructure (including roads and bridges), increasing dam
capacity, acquiring interests in land and purchasing water rights.
Professor John Williams, Dean of Adelaide Law School and
vice-president of the Australian Association of Constitutional Law, summarised
the issues with clause 88AD in his recent article in The Advertiser:
These are obvious activities that would be required to
deliver the additional water for the Murray. However, the Bill does not prioritise
these activities. The temptation to focus on infrastructure rather than
reducing the over-allocation of the river may prove irresistible. Further, the
link between the expenditure of the funds and measurable outcomes for the
health of the River is poorly made.[3]
These concerns were shared by Mr Tim Kelly, Chief Executive
Officer of the Conservation Council of South Australia:
The additional 450 gigalitres of water from a special account
may never be achieved, even if up to $1.77 billion is spent on additional
infrastructure. There is no absolute requirement in the special account bill
for these funds to be spent to achieve the additional water.[4]
As a result I propose an amendment to clause 88AD requiring
that priority be given to projects with maximum guaranteed water returns to the
system within the shortest timeframe, taking into account social and economic
factors, as well as early adopters of water efficiency measures.
Recommendation 2
Clause 88AD of the Water Amendment (Water for the
Environment Special Account) Bill 2012 be amended to ensure that funding
priority is given to projects with maximum guaranteed water returns to the
system within the shortest timeframe, taking into account social and economic
factors, as well as early adopters of water efficiency measures.
It is again worth noting the consistently glib attitude
taken by both the Federal Government and the MDBA when it comes to recognising
irrigators for past efficiencies and investigating the comparative efficiencies
of different irrigation regions. I again refer to evidence given by the MDBA’s
Chief Executive, Dr Rhondda Dickson, during Senate Estimates in May of this
year:
Senator XENOPHON: No, but you can establish how
efficient an area is and when it became efficient, can't you? That is a matter
of fact, isn't it?
Dr Dickson: You could presumably do that. But I guess,
as to how you might rank efficiencies, that is not really our job. It is more
to look at what is a sustainable level of extraction rather than who is the
most efficient.[5]
This issue has not been addressed in these Bills.
Recommendation 3
Urgent modelling is undertaken to establish the comparative
efficiencies of irrigation communities in the Murray-Darling Basin to ensure
fair treatment of irrigators.
It is also imperative that local knowledge is taken into
account through consultation with irrigator groups throughout any regulatory
reforms of the Murray. For example, Mr Mark de Lacy McKenzie, Chief Executive
of Murray Valley Wine Growers Inc told the Senate Rural and Regional Affairs
and Transport Committee recently:
There is a classic example downstream on the South Australian
border here which is the Lindsay Island issue you have probably heard about. We
have a huge wetland on Lindsay Island which can be, with check banks and
regulators, effectively irrigated. Rather than an overbank flow at 1,200
gigalitres to achieve that naturally it can be done with 95 gigalitres. We have
circumstances like that all through the basin.[6]
Furthermore, given the current inability of many South
Australian irrigators to access funding provided through the Federal
Government’s $5.8 billion Sustainable Rural Water Use and Infrastructure
Program due to irrigators’ already high levels of efficiency, it is imperative
that funding is made available for research and development via the Water for
the Environment Special Account.
Recommendation 4
Clause 86AD(2)(a) of the Water Amendment (Water for the
Environment Special Account) Bill 2012 be amended to include projects in
Research and Development or projects using emerging technologies and to
acknowledge and reward early adopters of water efficiency measures.
While the Special Account Bill requires annual reports to be
presented to Parliament, there is no requirement that the administration of the
fund is audited. The need for proper oversight of Federal Government funding
was demonstrated in June 2012 when the Australian National Audit Office (ANAO)
reported that all applications from funding rounds one and two of the Private
Irrigation Infrastructure Operators Program in New South Wales "did not
contain sufficient detail to facilitate a thorough assessment, particularly in
relation to addressing the economic/social criteria, environmental criteria and
the projects’ cost-benefit analyses".[7]
Therefore it is imperative all funds paid out of the Water
for the Environment Special Account are subject to robust and regular audits so
as not to replicate the inappropriate granting of Federal Government funds that
has previously taken place.
Recommendation 5
The Water Amendment (Water for the Environment Special
Account) Bill 2012 be amended to require the ANAO conduct an audit of the
Special Account after the first year of operation, the third year of operation,
and every three years after that, with specific attention to:
- The financial performance of the account;
- The projects funded under the account, and the robustness of the
funding process;
- The performance of these projects in relation to the outcomes
under 86AA;
- Any related matters.
Water Amendment (Long Term Average Sustainable Diversion Limit Adjustment)
Bill 2012
I am broadly supportive of the Water Amendment (Long Term
Average Sustainable Diversion Limit Adjustment) Bill 2012, however the
Committee heard evidence raising concerns over the legality of this Bill.
The Conservation Council of South Australia, together with
the Wilderness Society, argued that under the current Bill social and economic
considerations will be elevated to equal status with environmental
considerations:[8]
Underlying this observation is a legal debate of a quite
fundamental nature concerning the relationship between environmental, social
and economic considerations in relation to the proposed Basin Plan. The
government, through its statements in the explanatory memorandum, is
perpetuating a highly contentious legal viewpoint that all three aspects may be
considered simultaneously when producing the Basin Plan, and now in relation to
an adjustment to the SDLs spelled out therein.[9]
Their submission continues:
There is strong legal advice to the contrary... which suggests
that socio-economic considerations may only be taken into account after the
long-term average sustainable diversion limit has been determined by reference
to the environmental sustainability needs of the MDB.[10]
Similarly, it is possible litigation will commence based on
the proposition that the best available science has not been used when setting
SDLs and that as a result, the environmental objectives of the Basin Plan will
not be achieved.
This concern should be meaningfully addressed by the Federal
Government before the Bill passes the Senate.
Further comments
Inquiry into the Management of the Murray-Darling Basin
It is worth noting that the abovementioned inquiry has not
yet reported, nor is it due to report until February 6, 2013.
Furthermore, the concerns raised in the Committee’s interim
report have not yet been responded to by the Government or addressed
meaningfully in any way.
Given this, it is worth questioning why the Government is
seeking to push this legislation through Parliament before the end of 2012.
While there is no question that a long-term plan for the
Murray-Darling Basin is of critical importance, the Government must also
meaningfully address past and present failures in the management of the
Murray-Darling Basin system as discussed throughout the abovementioned inquiry.
This includes responding to concerns raised about the lack
of flexibility and equity in the criteria of established infrastructure funds,
which have consistently disadvantaged early adopters of water efficiency
measures in regions such as the Riverland in South Australia.
Amendments must be made to this legislation to ensure that
early adopters of water efficiency measures are not disproportionately
disadvantaged by water recovery targets as prescribed under the Basin Plan.
Senator Nick Xenophon
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