Minority Report from the Australian Greens Senator Rachel Siewert


Minority Report from the Australian Greens Senator Rachel Siewert

Introduction

The issue of the management of Australia's shared water resources is one of utmost importance - one that is made all the more crucial by the problems presented by over-allocation and over-use, and of overlapping jurisdictions and complex and varied systems of water allocations and rights in the face of significant reductions to available water in a drying climate.

Water governance within the Murray Darling Basin has always been a difficult and complex issue with the river system involving four states and one territory all of whom have overlapping and competing interests together with different priorities and institutional arrangements. While there has been recognition of the problems facing the Murray Darling system for decades, governance arrangements under the Murray Darling Basin Ministerial Council have been characterised by inertia and a lowest-common-denominator approach to resolving conflict.

The agreement of the National Water Initiative in 2004 represented a major conceptual step in characterising both the nature of the problem and the kinds of steps that needed to be taken. This conceptual leap was not however matched by the necessary progress in reforming water management, and Basin governance continued to be dominated by parochial interests and held back by state veto powers.

The announcement of the National Plan for Water Security by the Prime Minister in January 2007 represented both a recognition of the seriousness of the issue (with the commitment of $10 Billion and the opportunities for reform that entailed) and another disappointing example of the continuing politicisation of the issue (coming without consultation and with strings attached in the lead up to a Federal election).

Given the importance of these issues taken together with the significant amount of funds at stake it is particularly disappointing that so little time was afforded for proper consultation over these bills, that the committee inquiry was so short and that the committee's report is perfunctory and does not address the serious issues at stake in the debate to protect and secure our nation's shared water resources.

Positive Aspects of the Bill

While these comments necessarily focus on a number of concerns with and shortcomings of the Water Bill 2007, the Australian Greens wish to acknowledge that there are a number of positive aspects of both the Bill and the NPWS which offer some progress on addressing the problems of Basin governance and sustainable water use.

These include:

  • commitment to determine sustainable extraction levels,
  • commitment to a shared planning framework and a whole of basin perspective
  • realising the promises of the NWI,
  • creating greater water security for all stakeholders,
  • an opportunity to overcome the inertia and infighting that has characterised Basin governance,
  • meeting international commitments (using treaties power),

Some concerns still remain on a number of aspects of these issues - including the manner in which sustainable extraction levels are determined ... and whether the provisions of the Bill are effectively enacting our commitments to international conventions (rather than simply using them as a justification for applying the commonwealth's external affairs powers). Nevertheless, a wide range of stakeholders from farmers organisations to environmental advocates have welcomed the opportunity offered by the National Plan for Water Security to move forward on industry reform and sustainable water use.

Weaknesses in the Bill

The Australian Greens are concerned that the Water Bill 2007 in its current form has a number of key weaknesses. These weaknesses need to be addressed either through legislative amendment or in some cases could be handled through careful and consultative management. Nevertheless, given the manner in which this legislation has been rushed through the Senate together with the way in which several key water management issues have been politicised, we remain concerned that these issues could undermine and derail the reform process as envisaged by the NWI.

These risks include:

  • The long lead time before the Basin Plan effectively comes into operation brought about by the decision to recognise existing state-based catchment plans for the lifetime of those plans (mostly until 2014 and 2019 in the case of Victoria)
  • Lack of clear environmental targets and timelines. Taken together with the delays in effectively instituting the Basin cap there is a real risk that the return of environmental flows could be too late to prevent irretrievable damage to some ecosystems.
  • The creation of another large bureaucracy and the complexity of having multiple agencies and institutions with overlapping jurisdictions  [MDBA + MDBC + 2 Ministerial councils + NWC ...]
  • The lack of independence of the new Murray Darling Basin Authority and the provisions to allow Ministerial direction in setting the sustainable diversion limit and in developing the environmental watering plan.
  • The risk that institutional arrangements within the Bills might effectively 'freeze' reforms and possibly delay them for many years
  • The extent to which many of the reforms are now dependent on the content of the Intergovernmental Agreement [IGA], with the possibility the  agreement reaching process could drag out and blow timelines.
  • The lack of community consultation and engagement in the legislative process and in the IGA
  • The lack of consultation with Indigenous stakeholders
  • The manner in which the debate has become politicised, particularly in relation to compulsory acquisition provisions and the risk that investment decisions could be strongly influenced by political considerations

Will the response be quick enough?

The Australian Greens are particularly concerned by the timeframe of the proposed interventions. On the one hand the government is arguing that the pressing urgency of this issue is the reason that these Bills need to be pushed through the legislative process with insufficient time for scrutiny. However, on the other hand the decision to recognise and protect existing (state level) catchment plans effectively means that little change may be seen in the Basin until after 2014. For many of our threatened ecosystems and for rural communities in which farmers are struggling with uncertain seasonal water allocations this delay could mean action is too late to preserve our precious environmental assets and to protect irrigation industries.

In theory the Prime Minister has already committed to spend $6 Billion on improving irrigation infrastructure and $3 Billion to address over-allocation and buy back environmental water. In practice, however, this investment was made contingent on State parties referring their powers. With the failure of Victoria to agree to refer its powers, most of it is now contingent on all state parties signing up to the IGA, which could see considerable delays in undertaking needed water reform and returning environmental flows.

The Australian Greens support the calls for the Commonwealth government to immediately begin buying water from willing sellers to increase the amount of environmental water available and to increase the certainty of existing water entitlements by reducing the extent of over-allocation.

It is important to appreciate that we are discussing two distinct but inter-related issues here. Simply buying back water allocations to address the problem of over-allocation within a region (that is, where more water has been allocated than is actually likely to be available within a given system) does not necessarily return any water back to the system - it simply increases the certainty of existing entitlements by reducing the extent to which available water will not be sufficient to meet the remaining entitlements. The purchase and return of water to environmental flows needs to be addressed urgently, as the combined impacts of extended drought and over-allocation is severely threatening the resilience[1] of many of our iconic ecosystems, and there is a real risk that we may soon pass thresholds beyond which these systems cannot bounce back.

As Professor Mike Young said in evidence to the inquiry:

The dams are now empty. The concern I have is, if we have only a 25 per cent chance of having it better and a 75 per cent chance of having it worse, how are we going to speedily resolve this issue. That requires the investment to be made very quickly and it requires a very dynamic market. Because of that I have suggested that, if we want to keep entitlement reliability, there might be sense and wisdom in retaining a mechanism where you can acquire water on just terms in a quick process, so we can start that adjustment that is going to be needed.[2]

The government needs to be cautious about the manner in which it enters the market, and there are a suite of market-based instruments that could be judiciously applied without resulting in rising prices, market distortions or stranded assets (these issues will be discussed in detail below).

The Australian Greens are particularly concerned that there is nothing within the legislation which guarantees speedy action in implementing the Basin Cap and the environmental watering plan.

As the Wentworth Group of Concerned Scientists stated:

We are concerned that if existing plans are protected then little change will be seen within the Basin until after 2014, by which time many of the environmental assets and the rural wealth of irrigation could be destroyed. This task is urgent.[3]

We note that in evidence to the inquiry the Victorian Government indicated that its recently revised plans, which it expects the Commonwealth to honour, will run through to 2019, and that the VFF want the 4% cap on trading water out of a district retained until at least 2014. As Professor Cullen noted:

My concern is that earlier in the bill there are transitional arrangements to get back to the sustainable levels of extraction within a five year period. I am concerned that some of these do not kick in until 2014. There is a timing issue that is a bit of a worry. The system is perhaps changing more quickly than this timetable envisages.[4]

The Australian Greens are also concerned that there is nothing within Bill to ensure that the first plan is completed within 2 years of establishment of the Murray Darling Basin Authority (MDBA).

In relation to the issue of the timing of the first MDBA plan, we note the comments made by DEW:

unknown5unknown1Dr Horne— The third issue was the proposition that the first basin plan should be completed within two years. This is the government’s intention and the minister said as much in his second reading speech. The second reading speech can be given additional authority through the minister making a written direction to the authority. This is our preferred approach because, if this was a real deadline, there is a legal risk that, if the first plan happened to be approved even a day later than the two years, it could be open to challenge on that basis. If the requirement were drafted so as to avoid invalidity of the plan, this would be a weaker proposition and therefore does not seem to be of much benefit to include it in the bill. Nonetheless, I would say it is something that we think is an important issue. The minister has said it is an important issue in the second reading speech and he is quite prepared to make a direction to the authority that this be given high priority and completed within two years.[5]

We appreciate the concerns raised by Dr Horne relating to a potential legal challenge to the plan if a legislative deadline was set, but we believe that this issue is sufficiently pressing that we would like a firm commitment from the government that the first plan will be delivered on time.

Recommendation: that the government addresses the issue of the timeline of the Basin Plan in the committee stage of the Bill and gives an undertaking that the Minister will issue a directive to the Murray Darling Basin Authority that it finalise its first Basin Plan within two years of its establishment.

Consultation & Indigenous rights

The Australian Greens are concerned about the lack of recognition of indigenous rights and interests in the Bill.

We share indigenous concerns that the Water Bill 2007 should include an explicit recognition of Traditional Owner inherent rights to land and water and provide a consistent legislative approach for Indigenous engagement and participation in natural resource management.

We also believe that the legislation should include provisions of water for cultural purposes, which is an allocation for traditional owners to decide where and when water is used, based on their own cultural-economic aspirations and spiritual beliefs.

Environmental water

Sustainable diversion limit

While the Objects of the Act are very clear in relation to its responsibility to "...return to environmentally sustainable levels of extraction..." "...to protect, restore and provide the ecological values and ecosystem services..." and "to take into account the broader management of natural resources..." the Bill does not of itself guarantee any environmental outcomes.

The Australian Greens are concerned by the lack of environmental goals and timelines within the Bill and with its failure to require end of basin and end of valley targets. While we acknowledge that the detail of the specifics of these targets and how they will be achieved is a matter for the MDBA (in consultation with Basin catchment management organisations, natural resource managers and other key stakeholders) the very failure to stipulate that there should be such environmental targets and indication of the principles upon which such targets and plans should be reached is a major shortcoming.

We do acknowledge that the Basin Plan include long term sustainable diversion limits and temporary diversion limits (clause 22(1), item 4) and maximum long-term annual average quantities of water that can be taken, at the level of the Basin and at the level of each water resource plan area (item 6), and also appreciate that there must also be water quality and salinity targets set (clause 25).

Amy Hankinson noted:

...we see the great value in having a robust sustainable diversion limit where the bill is amended to include a number of provisos to ensure that the diversion limit is sustainable. For instance, protecting the environment in critical low or medium flow years, taking into account climate change impacts and use of low and medium figures to get us away from misleading long term averages.[6]

The Australian Greens believe that the Bill needs to directly address the need for a robust ecologically sustainable diversion limit for the Basin, its catchments and sub-catchments by specifying that such a limit (or limits) is essential and by outlining robust criteria to guide the development of those limits.

To this end we support the submission of the Inland Rivers Network and the Australian Conservation Foundation in stating that:

The Bill should be amended to require the Authority to ensure the sustainable diversion limit:

  • reflects an ecologically sustainable share of the total resource and is not based on volumetric limits;
  • flexibly responds to wet periods and dry periods;
  • protects the environment in critical low and medium flow years;
  • takes into account climate change impacts to protect critical minimum environmental flows;
  • uses median figures, which reflect the reality of flows in the system more effectively than long term averages; and
  • takes into account the double accounting of surface water and groundwater.[7]

To this end we will be moving and amendment to require the setting of a robust ecologically sustainable diversion limit.

End-of-system flow regime

The Australian Greens are concerned that the Bill does not stipulate that an end-of-system flow regime should be determined by the MDBA. The South Australian Government comment on this issue during the committee inquiry, indicating in evidence that:

E6C7Wortley, Sen Dana0Senator WORTLEY—You have raised concerns that the bill fails to provide a guarantee on environmental returns to the River Murray. I am wondering how you think this can be addressed and how significant it is in relation to the Water Bill 2007?

unknown7unknown1Mr Freeman—As I outlined, it could be addressed through an amendment to the mandatory content of the basin plan. The basin plan at the moment does not require an end-of-river system target. In talking previously about how we might divide up the off-farm infrastructure, one of our concerns is that this does become splitting up a pie amongst jurisdictions, when really it should be about basin-wide solutions; whether money is spent in one jurisdiction or another is irrelevant. We need to restore health to the river system and the way that we will measure that is a target at the mouth.[8]

These concerns were echoed by environmental groups, with WWF also saying:

I noticed earlier that the South Australian government was calling for a guaranteed end-of-system flow, and certainly that is something that the WWF would support. We ask that such an end-of-system flow would be sufficient to maintain the integrity of the Coorong Ramsar site. I came across some interesting science from the South Australian government in their ecological character description from the Coorong. I think that would be a useful document for the committee to consider because, apart from determining the ecological character of the Coorong site, it also sets out a framework for aligning management responses to benchmarks for condition, and it may be useful for thinking more closely on how exactly we draw the line on sustainable limits. I would like to submit that document for the committee’s reference.[9]

While the Australian Greens note that the Department of Environment and Water Resources (DEW) suggested during the inquiry that this is an issue best left up to the MDBA as part of the environmental watering plan, we disagree that this is either necessary or sufficient. While we believe that the specific details of the end-of-system flow levels and the plan by which those levels would be achieved is indeed a matter for the MDBA, we believe that the legislation is deficient to the extent that it does not stipulate that such a target should be set nor give criteria for determining what counts as a robust end-of-system flow regime.

To this end the Greens will be moving an amendment to require the setting of an end of system flow regime.

Use of long-term averages

The Australian Greens are concerned with the reference to the use in the Bill of long-term averages for determining sustainable diversion limits in Part 2 Division1B (23), Part 2 Division 4A (75) as defined in Subsection 22(1) item 6 (p41).

We believe that the decision to use long term averages to determine sustainable diversion limits reflects a southern basin-centric bias in the approach to sustainable water management that does not adequately take into account the high level of variability in the event-driven and often ephemeral systems of the northern basin. To this end we would prefer the use of long-term median values or some other statistical regime that gave greater account for system variability and offered more opportunity for the adaptive management of the sustainable use of the systems of the northern basin.

Similar concerns were raised by the Wentworth Group, ACF, IRN, WWF and QFF.

The Australian Greens will be seeking to amend the Bill to alter the references to long-term averages.

The issue of the high degree of variability within parts of the system is also matched by an emerging issue of increased basin-wide variability and uncertainty of rainfall events, surface water runoff and overland flows in the face of climate change. The reduction in flows and increased systemic variability was characterised by Professor Cullen in evidence to the inquiry:

unknown8unknown1Prof. Cullen—... I fear that the inflows into the Murray-Darling have dropped by about 40 per cent over what has been the reasonably long-term average. When you look at the climatic record, the period 1950 to 1990 has been an unusually wet period and we are now back somewhat drier than the period 1900 to 1950. A lot of our understandings of the Murray-Darling, the agriculture and the environment it can support have been made during a reasonably unusual wet period. I believe we need to adjust to this water scarcity and learn to live without a number of wet years. It is probably more serious in that we have now run all the storages to empty and it is quite possible that some of those storages will not refill without a run of quite unusually wet years. They will not fill in average years. We are not dealing with a stable system. We are dealing with one that has quite a lot less water and which might be continuing to decline.

When we look at the Perth story, the weather patterns have slipped down to the south and in Perth it seems to be getting drier again. There has been a series of step changes. I hope that is not what we are seeing on the east coast, but I fear it might well be. We deal with two weather patterns in the Murray-Darling Basin. We have the westerlies that impact Perth, Adelaide and Melbourne. They appear to have slipped south and we appear to be getting much less rain because of it. In the northern part of the basin we are dealing with the cyclonic systems, and we have seen one that has just hit the coast, which produced a lot of water into Sydney. It brought the Sydney storages back from 30 per cent to 50 per cent. We just do not know how frequent those events, with the climate change predictions, are going to be. Traditionally in Sydney they have been about every eight or so years. If they go out, then we have more troubles in the north. The cyclonic activity that hit the coast did not hit the northern part of the Murray-Darling Basin so we did not get a pulse of water going through that. We do appear to be dealing with a different climate.[10]

It is important to note that increasing climactic variability can mean an increased likelihood of extreme events - both droughts and floods.

Professor Cullen's evidence, along with recent report from the CSIRO entitled Climate change and Australia’s water resources: first risk assessment and gap analysis[11] raise the serious question of how do we protect the environment in critical flow years? We believe that there are two critical issues that need to be considered, firstly how we manage to protect and enhance the resilience of our riverine, floodplain, wetland and estuarine ecosystems (which indicates a need for better science and more work on adaptive management), and secondly whether the proposed governance systems and water sharing arrangements are flexible enough to deal with the requirements for ecosystem survival in low flow and critical flow years - particularly with the prospect of a 40% reduction in available surface water as indicated by Professor Cullen:

We have to accelerate the implementation of the National Water Initiative, because that still gives us the best possible framework for dealing with uncertainty and declining water. It has

been agreed by the Prime Minister and the Premiers. We have to get on and do it perhaps a bit quicker than we have been planning to do it. Secondly, we need to improve the governance of the Murray-Darling Basin. I know that is one of the issues concerning the government. A lowest common denominator governance model might get you by during wet periods, but it is certainly not going to get us through the water scarcity that we are now facing.[12]

To this end the Australian Greens recommend

  1. that the Government commit to funding the best possible science with an aim to understanding how to maintain & enhance the resilience of our river systems and associated ecosystems to deal with climate shift and increased climactic variability.
  2. that water sharing arrangements be reviewed on the basis of the best possible science to ensure arrangements are compatible with the requirements for managing resilience for key environmental assets within the Basin

The Australian Greens will be moving amendments to require information gathering on ecosystem health and resilience by the MDBA and to add consideration of these issues to the Objects of the Act.

River health monitoring

In evidence to the committee Professor Cullen suggested that there was a pressing need to ensure regular systematic collection of data on indicators of river health.

Prof. Cullen - As to the mission in the document, there are a lot of good requirements for water information, and I strongly support all of that. But there is no requirement for regular information on the health of the rivers, and yet we are doing all of this to restore river health. I believe the bill would be better if we could include in it a commitment to accelerate and to report regularly on the sustainable rivers audit that the Murray-Darling Basin Commission has been doing. We need to get a routine, regular, systematic measure of river health so we can see whether we are getting on with the task.[13]

The Australian Greens are concerned that as it stands the CSIRO study into sustainable extraction levels is effectively focused primarily on hydrology - only providing half the data needed to set the cap. Determination of the level of sustainable extraction (cap) is based on knowledge of total available water (i.e. the hydrology) plus a determination of what is required for ecosystem health. We remain concerned that there seems to be an assumption the cap will be a 'magic' fixed figure, whereas we believe it likely that the requirements of adaptive management to maintain and enhance resilience will mean this figure is likely to vary.

Allocation issues

Seasonal Allocations

We have tended to manage our water allocation systems and to attempt to secure environmental flows through a system which is focused on maintaining flows and delivering minimum ecosystem requirements, which in effect seeks to average out the variability in the system. In practice this has meant fighting to secure environmental flows during critical flow periods and allowing other users to access their full entitlements during high flow events.

However, given the emerging knowledge on the resilience of drought-adapted ecosystems, it now seems likely that there may be an environmental requirement that after a big drought it may be necessary to get a high flow 'flushing' event onto the floodplains and through the wetlands to ensure recovery and restore resilience.

unknown11unknown1Prof. Cullen—Australian aquatic ecosystems and terrestrial ecosystems are adapted to drought. Therefore, they have the capacity to bounce back from a drought. We term that ecological resilience as the ability to recover. What seems to me important as we go into this uncertainty is to try to understand what are the critical factors that allow those systems to recover and make sure we do not inadvertently lose them. The obvious example is that fish hang on in waterholes. Even when the river has ceased to flow you have still got waterholes and fish can hang on in there and then recolonise. We obviously see this in the Lake Eyre Basin where some of the waterholes hold fish that have measured at 18 years old. They hang on and they can breed. There are a whole lot of other, what we call, refuges by which animals and organisms hang on and then recolonise. That is the first point, understanding what those refuges are and making sure we protect them so the system can bounce back.

The second thing is trying to understand these thresholds. How frequently do we need to get water on the floodplain for the trees, into the wetlands for the wetlands, for the waterbirds and for fish? I am trying to get some of the science now marshalled to let us know what existing knowledge tells us about those various thresholds. We then start to rethink some of the thinking. In the past it has been the view that in a wet period you could harvest as much water as you wanted for irrigation and in a dry period we would fight over it between irrigators and the environment. When you start thinking this way and you look at, say, the red gum story, it may well be that after a run of dry years and you do get some water, what is important is that the high flow gets out onto the floodplain for the environment. Rethinking a bit about when it is reasonable to harvest floodplains and when we should not be doing that seems to me to be part of living with that drying environmental side of it. I think that is where some of the science is taking us, the idea of maintaining the resilience, understanding its thresholds and then letting that feed into the management of our water so that the environment gets its share when it really needs it.[14]

It is worth noting that under these circumstances much of this water is not 'consumed' or 'wasted' by the ecosystems in question, but rather becomes available to other users downstream, including irrigators, urban users and other ecosystems.

This raises a number of important issues pertaining to the relationship between seasonal allocations (as set by states) and the overall basin cap on extraction levels (as set by the MDBA).

It is unclear within the Bill who will make periodic announcements to irrigators of seasonal entitlements? The assumption might be that the announcement of seasonal allocations continues to be the responsibility of state agencies, but as the Bill is silent on this issue we believe that there is a need for greater certainty and recommend that the Minister should address this issue during the committee phase of the Bill.

As alluded to previously in relation to both the issue of ecosystem resilience and of end-of-system flows, the requirements of ecosystem health relate to a flow regime within the environmental watering plan which reflects emerging environmental requirements, rather than to the setting of a simple flow target.

As Professor Cullen puts it:

unknown12unknown1Prof. Cullen—This is one of the really tricky bits. From what I have read of the bill, there is an implication that we just need to set a long-term sustainable level of extraction. I am just a bit worried that implies there is a magic figure such that, if we can operate within that, we will be okay. I think the rainfall has certainly declined and it may still be declining as it has in Perth. The sustainable level of extraction may not be a fixed figure, it might be a variable figure, and we are going to have to learn to manage within that. There is still the critical question: once we have a sustainable level of extraction, someone has to make periodic announcements to the irrigation community as to how much the seasonal allocations are. At the moment that is not referred to in the bill. That will be a state responsibility. I see a difficult connect between the limits on diversion, the sustainable level of extraction, which might be varying somewhat, and then the second set of decisions within that for the periodic announcements of seasonal allocations. That is the crunch. If we got those seasonal allocations right we would not have had a problem now. In my view, traditionally we have not got them right, and I am still worried about the disconnect particularly between the multiple players. We have the new Murray-Darling Authority. We have the Murray-Darling Basin Commission and we have each of the state agencies. My understanding is that each of the state agencies will be doing those seasonal allocations. Making sure that is realistically within the sustainable levels is going to be the tricky part, and it is not clear from the bill how that is going to be done.[15]

MDBA Independence and responsibilities

Independence of the MDBA

The Australian Greens are particularly concerned by the issues relating to the independence of the MDBA and the proposed powers of Ministerial oversight and direction. We are concerned that, as the Bill stands, the Minister can direct the MDBA in setting both (1) the sustainable extraction level (2) the environmental water plan.

The Greens will be putting forward amendments to address these issues

We also remain concerned that there are no requirements for open consultation with key stakeholders on these key issues - including States, Indigenous interests, farmers, urban users and environmental groups.

The Greens are also concerned that there is no requirement consult with states before amending the Water Act, given that this has potential knock-on effects to both the content of the likely Intergovernmental Agreement and future enabling Acts at the state level.

The Greens also believe that the Commonwealth environmental water holder needs to be free from inappropriate limits

Ministerial Powers

The extent of the powers of the Minister to intervene with respect to the contents of the Basin Plan, the exercise of the MDBA's functions, and to create exemptions to the Basin Plan by regulation, compromise the MDBA's independence and authority. The Greens will be moving amendments to limit these powers of the Minister to ensure the independence of the MDBA and to limit the politicisation of the Basin planning process. .

Responsibilities of the MDBA for the environment

The Australian Greens support the comments of the Wentworth group in relation to the need to ensure that the MDBA is explicitly given responsibility for ensuring that the environmental objectives contained within the Objects of the Act:

unknown13unknown1Prof. Young—... One thing the Wentworth Group has been very supportive of in the bill at the moment is the objects of the act. There is a very important issue there: the objects of the act require this to be considered very carefully and that the science be done properly.

unknown13unknown1I recommend that the committee consider changing the responsibilities and functions of the authority to include a responsibility to pursue the objectives of the act. We are going through a very difficult stage, and one of the things that I do think is important is that the authority when it is set up is given a broad mandate to really address these issues and is told squarely that it has a function to pursue the objectives of the act.[16]

The Australian Greens will be seeking to amend the Bill to ensure that MDBA is given responsibility for meeting the Objects of the Act (Division 1, Section 3)

The Australian Greens also note the suggestion by the Wentworth Group that Part 5 of the Bill should be amended to direct the MDBA to progressively establish a central secure Basin register of water entitlements and will be seeking to amend Section 103 of the Bill to give effect to this recommendation:

The commonwealth should build a top class water registry system for surface and groundwater systems, with appropriate guarantees. All commonwealth water should be on such a registry, and irrigators should have the opportunity to migrate to this registry if they wish to have greater certainty as to titles.[17]

International Commitments

The Australian Greens welcome the recognition within the Bill of Australia's commitments to a number of international conventions - including the Ramsar convention on wetlands of international importance, the convention on biological diversity, and the migratory bird conventions.

We are concerned however, that the legislation should not merely be consistent with these international obligations, but should be truly seeking to give effect to them. In seeking to use Australia's commitments to these international conventions as a way of invoking the Commonwealth's external affairs powers it is incumbent on the Commonwealth to ensure that it is fully implementing its commitments under these conventions.

In particular, the Australian Greens believe that the Basin Plan and Water Resource Plans need not only be consistent with and give effect to relevant international agreements, but also to plans and strategies developed for implementing those commitments under the EPBC Act. We also believe that Water Resource Plans should be required to implement relevant Ramsar management or recovery and threat abatement plans.

The Greens will be moving an amendment to ensure that the Basin Plan and Water Resource Plans give effect to relevant plans and strategies developed for implementing our commitments under the EPBC Act.

Climate Change Convention

The Greens also believe that the Bill should specifically implement important and relevant elements of the Climate Change Convention and will be moving amendments to put this into effect.

Public Standing Provisions

The Greens believe that to ensure that the Authority and Minister can be held accountable in exercising their public interest functions under the legislation, the Water Bill should be amended to provide for public standing provisions equivalent to those in the Environment Protection and Biodiversity Conservation Act 1999. The EPBC Act provides for "interested persons" to be able to assist in the enforcement of the Bill by applying for injunctions if a person has engaged, is engaging or is proposing to engage in conduct that would constitute a contravention of the Act. Further, the EPBC Act provides for "interested persons" to be able to apply for a review of administrative decision under the Act.  The extended standing provisions in the EPBC Act have not led to a deluge of frivolous cases. These are important provisions that should be included in the Water Bill to ensure the credibility and legitimacy of the federal water regime.

Market Mechanisms

The Australian Greens believe that it is best to have a package of various mechanisms and market based instruments for purchasing environmental water available, and to seek to use the most cost efficient mechanisms first. The open tender model used by River Bank in NSW is a good example of a way in which a government can effectively enter into the market to purchase environmental water without distorting existing markets. The system is based on an open tender model in which farmers are asked to specify how much water they might consider selling at what cost, and then the least-cost options are purchased to meet a given water target.

Professor Mike Young pointed out some of the potential dangers of governments entering into water markets, particularly in relation to the mismatch between the size of existing markets and the amount of money the government has indicated it has available for purchasing environmental water and addressing over-allocation:

Prof. Young—At the moment the size of the market that the farmers have built as they adjust in the southern system has risen to about 100 gigalitres of water entitlements per year in the southern connected River Murray system. That is what farmers need to do, the structural adjustment that they are doing. When the government enters in and comes on top of that, if you doubled the size of the market and kept the structural adjustment going you would get about 200 gigalitres a year. $3 billion will buy, at current market prices, about 1,500 gigalitres of high-security water, and depending on how you mix it with other types of water it changes the algebra. We are talking about very different sums.[18]

The NFF also raised concerns with the manner in which the government might distort water markets and indicated the need for a cautious approach:

Mr Arthur—If the government were to almost seamlessly enter the market over an extended period I do not think there would be a market explosion. Obviously if the government were to enter into the market over a period of two years and say it is going to spend $3 billion in the water market over two years, I would say you would get some sort of property explosion, which would be totally unhelpful to all of us. Under the rollout of water reform in Australia, farmers are very much looking to the water market for us to restructure our businesses in response to a lot of the threats that Mr Cosier and Professor Young have talked about. We need to make sure that the market is accessible to governments to acquire water for environmental flows but that it is also accessible to farmers to readjust their businesses in the light of commodity prices, climate change and all the risks that we face.[19]

Compulsory acquisition

The Australian Greens support the contention of the Wentworth Group that the option of compulsory acquisition needs to be kept on the table as an option of last resort.

Senator O’BRIEN—Professor Young, I asked a question about your views on acquiring water. I take it you are aware that section 255 of the act states that the act does not authorise compulsory acquisition of water access rights. I was seeking to draw your attention to that earlier, but I did not refer to that provision. I take it you are aware of that. How is that consistent with what you have said to us so far?

Prof. Young—If I had my way I would delete that section. I think that all options should be on the table. The Wentworth Group has consistently said that all options should be on the table. People do not like the words ‘compulsory acquisition’, but it does enable the government to pay well above marketplace and to play with just terms and it does require a government to give advance notice. The processes are very well established of giving people long notice of a change that is coming, giving them payment up front so they have time to invest, and it has a very important concept in there about paying justly and dealing with people equitably. Ruling out that surprises me. I understand the concern, but I would not put it in legislation.

Senator HEFFERNAN—In that so-called scenario that you have just described one of the catches for farmers is when they discover that money is taxable.

Prof. Young—Yes. Under compulsory acquisition arrangements there is special legislation that deals with compulsory acquisition that are different, and that sorts out a whole pile of income taxation arrangements. In the second reading speech, even with section 77, where we are talking about payment for essentially a legislated reduction, which is the same as a compulsory acquisition, the payment is only for actually the reduction in the value.[20]

These concerns were also debated by others during the inquiry

Mr Sydes—Compulsory acquisition should be a last resort. From a basic civil liberties perspective, there are very good reasons for that and there are very reasons for the constitutional protection that we have with respect to property rights. However, I think to exclude it and to basically tie one hand behind the back in negotiations about voluntary acquisition is an unwise move and it should be there on the table.

Dr Buchan—It would be a worst case scenario to envisage governments just turning up at someone’s farm gate and saying, ‘We are having your water. You are out.’ That is ridiculous and extremely unfair. Realistically, we need to go through an enormous process of change across the basin. If that process of change is done well with good consultation with communities and gives them the information that they need to envisage where they are likely to be in 10, 20 or 50 years time, compulsory acquisition can be a useful tool in the toolkit. There are advantages with that. You are exempt from capital gains tax and you can gain greater than market value for your water. Whilst I do not think anybody was thinking that it would be a tool of first choice and to be used heavy-handedly, which would be very unfair, it just seems ridiculous to tie the government’s hand and remove an important potential tool from the toolkit.

Prof. Cullen—I would like to support that. I think it is a mistake to rule it out. I do not imagine it would be used all that frequently, but you can see a situation where perhaps 80 per cent of the water had gone out of a particular area and the remaining 20 per cent would have to carry a huge burden if they were to carry the management costs of keeping that infrastructure operating. In that situation a compulsory acquisition might well have significant advantages, as I understand it, from the point of view of capital gains tax to those farmers. I think you need to look at the tax situation in terms of a straight purchase versus an acquisition. There might be situations where the farming community would prefer compulsory acquisitions. It would be silly to rule it out, but I would not imagine it would be used all that frequently.[21]

The Australian Greens believe that we need a mechanism to allow acquisition of water on 'just terms', and that ruling out compulsory acquisition as last resort may not be in farmer's interests when they are faced with a need to relocate or restructure. Compulsory acquisition offers the possibility of compensation on just terms (ie more than market value) and exemption from capital gains tax.

The Australian Greens will be moving to strike out Section 255 to enable compulsory acquisitions as an option of last resort.

 

Senator Rachel Siewert

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