Executive Summary
The Murray-Darling Basin is without doubt one of the most
important river systems in Australia. It contains 11 per cent of Australia’s
population and generates agricultural production worth $15 billion per annum
(in gross value terms). This represents
40 per cent of Australia's total agricultural production and 65 per cent of
Australia’s irrigated farms.[1]
The Basin is also home to many of Australia’s key riverine environmental
sites. The ongoing health of the river system is essential for sustaining these
important water‑dependent ecosystems and the ecosystem services they
provide; the long-term agricultural productivity of the Basin; as well as the
regional and rural communities which depend on a healthy river for their
livelihoods.
Over several decades the health of the Basin system has
deteriorated through a combination of increased water extraction (especially in
the 1970s, 1980s and early 1990s) and the many years of drought until 2010 (the
millennium drought).
The increased rainfall of recent years has given some
reprieve to the potentially devastating environmental, agricultural and social consequences
of the millennium drought. However the inevitability of future droughts (which
may be even more severe) requires the implementation of a Basin Plan which
effectively manages the social, economic and environmental risks facing the
Basin system to ensure a sustainable and productive future for the Basin. It is
with this in mind that the committee welcomes the tabling of the Basin Plan in
Parliament late last year. The committee commends the work of the Australian
government, the Basin states and the MDBA for one of the most significant water
reforms in Australia’s history.
Because of the need to balance a range of competing
interests, the Basin Plan strikes a necessary yet imperfect compromise. Over
the course of the committee’s inquiry, much of the evidence received
highlighted concerns with the various iterations of Basin Plan. The committee’s
second interim report of October 2012 discussed many of these issues prior to the
presentation of the final Basin Plan to Parliament in November 2012. However,
some issues with the final Basin Plan remain. While the committee is mindful
that this report will not change the substance of the Basin Plan, it considers
that the evidence received and recommendations made in this report and previous
reports make a significant contribution to the ongoing public debate about the
management of the Murray-Darling Basin. It also urges the government to
consider the report’s recommendations as part of the adaptive management
framework that will be used to implement the Basin Plan.
The key findings of this report are as follows:
Surface water
The committee remains concerned about how the 2750 GL/y
reduction in the environmentally sustainable level of take (ESLT) was
determined by the
Murray-Darling Basin Authority (MDBA). While the committee acknowledges the
additional modelling of reduction scenarios that occurred just prior to the
release of the final Basin Plan, this modelling could have been produced in a
more timely manner and covered additional reduction scenarios.
Furthermore, the committee considers that future pressures on
water resources due to the projected range of climate change impacts and
run-off interceptions predictions should have been more thoroughly considered
in the modelling and that more research in these areas is needed. In addition,
despite the volumes of information released about surface water, the MDBA needs
to improve how key information is presented to stakeholders and the Australian
public. The committee expects that these issues will be the subject of further
government-funded research and will also be key considerations for the MDBA in
its adaptive management processes.
Groundwater
The committee remains concerned with how the proposed
extraction limits on groundwater have increased significantly since the Guide
and subsequently changed across various iterations of the Basin Plan. The
committee is of the view that the reasons for such changes have not been
adequately explained. Furthermore, the committee is concerned with the
limitations in knowledge about groundwater and surface water connectivity and
that the Basin Plan does not apply a more precautionary approach where these knowledge
gaps exist. While the committee acknowledges the steps taken by the MDBA to
update information about groundwater in the Basin, it considers that further
research in surface water and groundwater connectivity should be a high
priority.
Infrastructure investment, environmental
works and measures and constraints management
The committee welcomes the use of environmental works and
measures and other water infrastructure projects to improve water efficiency in
the Basin. It also supports the target that environmental works and measures to
contribute as much as 650 GL/y of the 2750 GL/y reduction in take through the
application of the adjustment mechanism. The committee urges the government to
assist Basin states in reaching this target and to keep Basin stakeholders
informed of the progress, as the committee is concerned of the uncertainty
created of any shortfall in the 650 GL/y being made up by water entitlement
buybacks.
The committee welcomes the consideration of constraints removal
in the Basin system to return an additional 450 GL/y to the environment.
However, the committee is concerned about the potential consequences that this
may have on landholders and communities in certain parts of the Basin. The
committee acknowledges the requirement of the MDBA for consultation when
proposing constraints removal and it encourages the MDBA to do so in a manner
that is comprehensive, timely and that fully addresses stakeholder feedback.
Water trading
The committee considers that the over-allocation of water
entitlements in the Basin in previous decades is a major source of the current
water scarcity problems faced in the Basin. The committee recognises that the
development of diversion limits under the Basin Plan addresses this issue.
The committee remains concerned that there is limited
information about the extent of sleeper and dozer water licences in the Basin
and how their activation and trade may impact on the management of water
resources in the Murray-Darling Basin.
The committee also remains concerned about the conduct of
the government buyback program of water entitlements. In particular, its
inquiry found that a number of stakeholders and rural communities had felt
increased cost pressures resulting from the ‘Swiss cheese’ effect caused by
non-strategic buybacks creating gaps in water delivery and that many sellers of
water entitlements sold entitlements under financial distress. Although the majority
of water buybacks have been completed, the committee urges the government to
address these two issues when conducting the remaining buybacks.
Types of water entitlements
The committee was concerned about how the different types of
water entitlements were addressed in the modelling used to develop the Basin
Plan. While it was acknowledged by relevant government officials that the use
of different types of water entitlements (or reliability types) could have a
significant impact on the water resources outcomes achieved in the Basin, the
committee was not provided with convincing evidence that this issue was
adequately addressed. The committee also heard evidence that raised concerns
about the value for money of the buyback scheme due to different water
entitlement types. In this regard the committee took evidence about the Twynam
water purchase and the proposed Nimmie-Caira irrigation area buyback.
Socio-economic impacts and
stakeholder engagement
The committee heard evidence about the limitations of the
socio-economic modelling of the Basin Plan. It also took evidence from rural
communities and stakeholders that stated that social and economic consequences
of the Basin Plan would be serious for many rural communities. In addition, the
committee heard of some significant gaps in the conduct of the government’s
consultation process over the Basin Plan despite the high number of
consultation meetings that were conducted. The committee also heard that while
the MDBA has embraced the concept of ‘localism’ in its future work on the Basin
Plan there was confusion among stakeholders about how this concept would apply in
practice.
Future research
Finally, the committee found that research and development
(R&D) was essential to the ongoing implementation of the Basin Plan and
solving many of the issues facing the Basin system. In particular, the
committee considers that R&D should be improved in five key areas:
- possibilities for improved water efficiency through crop use such
as non-paddy rice;
- future changes in water interception due to changing farm
practices;
- surface water and groundwater connectivity;
- soil use and management; and
- improved water efficiency from infrastructure projects.
The committee considers that R&D should be fully and
explicitly integrated into the MDBA's adaptive management approach to the Basin
Plan.
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