Second interim report: the Basin Plan: Addendum
11 October 2012
© Commonwealth of Australia 2012
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The text on the following page should be read into the report on page 36 of chapter 4, after paragraph 4.37.
4.38
The committee also heard evidence from ABARES regarding how the
different categories of water entitlements (i.e. high-security and
low-security) were reflected in the economic models of the 2750 GL/y reduction
of take for the Basin.
4.39
When asked about whether the MDBA had specified the different water
types to ABARES for use in its modelling of buybacks, an ABARES official stated
that there was 'no differentiation between the types' and later added that for
'all intents and purposes the difference between low and high security water is
reflected in the average yield'.[1]
4.40
When pressed further about differences in availability of water types,
the ABARES official conceded that 'we do not have that information'.[2]
4.41
ABARES provided some further explanation of how water types are
considered as part of its modelling of the impacts of the 2750 GL/y figure. In
an answer to a question on notice, ABARES outlined this aspect of its modelling
as follows:
The ABARES water trade model is a ‘water use’ model that
models how irrigators use available irrigation water during the year. The model
does not explicitly model entitlement classes, but rather aggregate allocations
across regions and industries.
For the Basin Plan modelling a long-term average year of
water availability was modelled, with water allocations based on observed
long-term average allocations...differences in entitlement types are reflected
through differences in their long-term Cap equivalents.
ABARES modelling is broadly consistent with the Commonwealth
purchasing an equal proportion of high and low security entitlements. That is,
if it was assumed 25 per cent of entitlements within a region were to be
purchased, then this would involve purchasing 25 per cent of the high security
entitlements in the region and 25 per cent of the low security entitlements.[3]
4.42
The committee remains very concerned about the accuracy of models regarding
the socio-economic impacts of the 2750 GL/y figure on the Basin when such
models do not consider full details about how different water types are used in
practice.
[1]
Mr Orion Sanders, Economist, ABARES, Committee Hansard, 24 April
2012, p. 13.
[2]
Mr Orion Sanders, Economist, ABARES, Committee Hansard, 24 April
2012, p. 14.
[3]
ABARES, answer to question on notice, 24 April 2012 (received 5 June
2012).
For further information, contact:
Committee Secretary
Senate Standing Committees on Rural and Regional Affairs and Transport
PO Box 6100
Parliament House
Canberra ACT 2600
Australia