Coalition Senators Additional Comments
Background
1.1 The Water Amendment
Bill 2008 aims to amend the Water Act 2007 by giving effect to the
Intergovernmental Agreement on Murray-Darling Basin Reform (IGA) signed by the
Prime Minister and First Ministers of each of New South Wales, Victoria, South
Australia, Queensland and the Australian Capital Territory (the Basin States
under the Act at the 3 July 2008 meeting of the Council of Australian
Governments (COAG)).
1.2 Water reform realised
by the Water Act 2007 was an initiative of the former Coalition Government,
which recognised the need to change the management of the water resources
within the Basin. Coalition Senators recognise that climatic conditions, and
resultant inflows across the Basin, have further deteriorated since then Prime
Minister John Howard and
then Minister for the Environment and Water Malcolm Turnbull announced the
National Plan for Water Security in January 2007, meaning the issues demand
even greater urgency than envisaged at that time.
1.3 Coalition Senators
are therefore concerned at Labor having demonstrated an inability, at
Commonwealth and State levels of government, to progress implementation more
quickly, especially on necessary water-saving infrastructure projects, and the
implementation of a Basin Plan before 2011, let alone 2019 when it will
actually take full effect.
1.4 Amendments to the
Water Act 2007 make changes to the cooperative planning, management and
regulatory regime in the Murray-Darling Basin.
1.5 The amendments reflect
agreement by the Basin States to refer constitutional powers to the
Commonwealth to broaden the Commonwealth’s planning, management and regulatory
powers.
1.6 Coalition Senators
are disappointed with the parochial and political approach applied by some
states throughout this process, in particular Victoria’s
Labor State Government. We note that in many respects the hands of the Senate
have been tied as a result of the need to honour the IGA. Aspects of the IGA,
particularly the maintenance of final veto rights for each state in certain
instances, will seriously impede effective long-term management decisions, such
as changing the formula for allocation between the states. These fundamental
flaws mean this model falls a long way short of the full referral of powers
originally sought under the Howard-Turnbull model.
1.7 Coalition Senators
broadly support the intent of the Water Amendment Bill 2008. However, the
Coalition Senators believe that the Bill could
be improved with the adoption of a number of amendments.
Community
Impact Statements for water purchases
1.8 Given the significant
volume of water that the Government is intending to pursue with the water
buy-back programme, Coalition Senators believe it is vitally important that the
potential impact on communities of the buy-back is assessed and understood.
1.9 Evidence given to the
inquiry by the Department of the Environment, Water, Heritage and the Arts
revealed that there had been no research undertaken to determine the potential
social and economic impacts on rural and regional communities of the
Government’s initial $50 million water buy-back programme.
Senator
NASH—Nine thousand megalitres as an
entitlement is quite a significant amount. Potentially the reason for buying
that is that water eventually will be returned to the system.
Dr Horne—That
is right.
Senator
NASH—So my question is: around those
buybacks, what socioeconomic impact studies have been done for communities of
potentially removing that water?
Dr
Horne—On those
particular purchases there has been no specific study done at this point in
time.[1]
1.10 Concerns were also
raised by Ms Jenni Mattila, Coordinator, Bondi Group. Ms Mattila stated
that
The
significance of that is that the government proposes to buy back 1,500
gigalitres; if we are talking about that buyback being mainly in the southern Murray region, potentially roughly a third of the water
entitlements currently on issue could be subject to buyback, and we have to
consider the environmental impact, the social impact on the economic impact.[2]
1.11 Evidence given to the
inquiry by Mr Rob Freeman of the
Murray-Darling Basin Authority referred to criteria underpinning sustainable
diversion limits. In doing so he indicated that under the Basin Plan the
sustainable diversion limit set for each catchment would need to balance
economic, social (including cultural) and environmental factors.[3]
1.12 Coalition Senators
believe if this criteria, which requires assessment of the full range of
potential impacts on local communities, is to be applied in relation to future
sustainable diversion limits, it should similarly apply in relation to all
buybacks in the interim period. Undertaking such assessments is especially
important given the significant quantities of water for which licences are
currently being purchased.
1.13 Related to issues
surrounding water buy-backs, Coalition Senators are concerned with flaws in
both the structuring of exit packages and the failure of the current buy-back
system to take account of exit fees faced by some irrigators within irrigation
groups who choose to sell licences to the Commonwealth. It is clear that many
growers believe the structuring of the buy-pack and of exit packages is
unfair. Significant reform is required to provide appropriate equity and
incentive for all involved.
Recommendation 1
1.14 That the Government
amend the Water Amendment Bill 2008 to ensure a guaranteed Community Impact
Statement for water purchases by the Commonwealth from each sub region of the
Basin.
Full
disclosure process for transparency of Commonwealth water purchases
1.15 Concerns have been
raised that the water buy-back process undertaken by the Commonwealth is
lacking in transparency.
1.16 For communities to
have an understanding of the trading arrangements in the current water market,
the necessity exists for a full disclosure process with regard to the
Commonwealth’s buy-back programme. This is the case not only in respect of
stand-alone water purchases, but also in respect of purchases of property with
water rights attached. Transparency expectations as to the latter extend to
disclosure of the factors taken into account in determining to proceed to
purchase, and the evidentiary basis for any subsequent changes to the use of
land so-acquired.
1.17 This means ensuring
full transparency with regards to price, volume, security, location and (where
applicable) any subsequent change in land-use.
Recommendation 2
1.18 That the Government
implement:
a. a full
disclosure process to ensure that any water purchases undertaken by the
Commonwealth are fully transparent with regards to price, volume, security and
location and, where applicable, any subsequent change in land use; and
b. a real time or live
exchange disclosing irrigation region, latest sale and value, bid and offer and
price by megalitre.
Ensure a
structural adjustment assistance programme for communities affected by water
purchases
1.19 Coalition Senators
believe that a structural adjustment package is necessary to allow communities
to adjust and restructure due to reduced water availability as a result of
water buyback.
1.20 Coalition Senators
note acknowledgement by the Department of the Environment, Water, Heritage and
the Arts, in evidence to the inquiry, that some structural adjustment will
occur in regional communities as a result of reduced water availability:
In
the absence of impediments, changes will naturally occur as markets direct
resources from less profitable to more profitable activities. Consequently
structural adjustment occurs throughout regional economies.[4]
1.21 However, Coalition
Senators are concerned at a failure by the Department to acknowledge that the
impact on markets, and therefore on the communities in question, will be
greater as a result of Government buybacks of water licences.
1.22 Coalition Senators
further note that whilst it has recognised that there will be structural
adjustment, the Government has failed to provide any direct support for
affected communities beyond the water licence holders from whom licences are
being purchased.
1.23 Consistent with our
belief that Community Impact Statements should be prepared in relation to water
purchases, Coalition Senators believe structural adjustment assistance should
follow for those communities experiencing significant impacts.
Recommendation 3
1.24 That the Government
allocate, on a ratio of need arising from the Community Impact Statements,
funding for a structural adjustment assistance package, to enable communities
to adjust and restructure due to reduced water availability as a result of the
Government’s water buy-back programme.
Set time
frames for water saving infrastructure to be delivered
1.25 Coalition Senators
believe that a key component of ensuring the sustainability of the Murray Darling Basin into
the future is Government investment in water saving infrastructure.
1.26 To date, the
Government has prioritised the water buy-back scheme over irrigation
efficiencies. Coalition Senators believe this is not the best way to progress
sustainability of the Basin.
1.27 Investing in water
saving efficiencies will return water to the environment and increase on-farm
efficiencies, at the same time potentially retaining production levels on-farm.
An ability to do more with less is of critical importance to our food security,
economic prosperity and environmental sustainability.
1.28 Coalition Senators are
concerned at revelations in Senate Supplementary Budget Estimates that while
the Government has been prompt in commencing some infrastructure projects, such
as potable water pipelines for the Lower Lakes and Narrung Peninsula
communities, other projects, such as the re-engineering of the Menindee Lakes
in New South Wales, will be the subject of three years’ dithering on options
and assessments before any decision to proceed is taken.
1.29 Without in any way
questioning the worth of the potable water pipelines to the Lower Lakes and
Narrung communities, Coalition Senators note this project will deliver little
or no water savings to the Basin yet the re-engineering of the Menindee Lakes
would have the potential to return up to 200 gigalitres of water to
environmental flows.
1.30 Unlike the Minister,
Coalition Senators together with the Shadow Minister for the Environment, The
Hon Greg Hunt MP, recently travelled the length of the Murray-Darling and note
the significant number of potential water-saving infrastructure projects
highlighted by communities and organisations.
1.31 Coalition Senators
believe it is a priority that potential projects be identified and pursued by
the Government at the earliest possible opportunities.
Recommendation 4
1.32 That the Bill provide for the setting
of clear targets for water to be saved from on-farm and off-farm infrastructure
projects, and require the tabling by 1 July 2009, with updates to be tabled at
least annually, of a schedule of such projects both being undertaken and
planned, specifying the expected savings from each project, the share of
savings dedicated to environmental, irrigation or other purposes and the
licence attached to these savings.
Move to
prevent the North-South pipeline
1.33 The sustainability of
the Murray-Darling Basin into
the future is an absolute priority for the Coalition.
1.34 As such, Coalition
Senators believe that the Water Amendment Bill 2008 must be amended to ensure
that there are no new extractions from the Murray-Darling Basin to
outside of that Basin that could impact on its future sustainability.
1.35 The Victorian
Government is currently planning to breach its obligations under the Living
Murray Agreement and divert to Melbourne water purchased in part
by Commonwealth investment for the Murray-Darling Basin. This
is how initial extractions through the North-South Pipeline will be sourced.
1.36 Once the Food Bowl
Modernisation project is completed, the Victorian Government will then divert
75 billion litres per year from the Goulburn Murray and Lower Lakes to Melbourne – in
perpetuity. As the pipeline will have significantly greater capacity, this
figure has the potential to rise.
1.37 Coalition Senators
believe this should immediately be stopped. Evidence was given to the inquiry
that supported the view that to make yet another urban centre outside of the Murray-Darling Basin
reliant on its finite water resources at this time of crisis is tantamount to
stupidity.
1.38 The water needs of the
Basin should have priority. Any water savings acquired within the Murray-Darling Basin should
stay within the Basin. According to evidence given by Dr Arlene Buchan,
Australian Conservation Foundation:
You
have the Murray-Darling Basin, which is on its knees, and there is a
suggestion that they will move 75 gigs of water annually from the Goulburn
district to Melbourne when Melbourne
pumps about 400 gigs of water out to sea every year as wastewater. It is
ridiculous. The basin is on its knees. Why would anyone propose moving water
from a basin which is on its knees, away from communities and the environment
which are stuffed, and send it to Melbourne, which can look after itself?[5]
1.39 Coalition Senators
believe 75 gigalitres is a very substantial quantity of water that would make a
significant and valuable contribution to food security and/or environmental
sustainability in the Goulburn Valley and
throughout the wider Basin were it to be available to irrigators and/or
environmental flows there as opposed to supplementing urban supplies outside
the Basin.
1.40 Coalition Senators
note the evidence from the Department of the Environment, Water, Heritage and
the Arts that neither the Intergovernmental Agreement nor the referral of
powers legislation is contingent on the construction or commissioning of the
North-South pipeline:
Senator
BIRMINGHAM—Is there
anything in the IGA or agreements leading to this bill or within this bill that
actually requires the north-south pipeline to be built?
Dr
Horne—Not at all.
Senator
BIRMINGHAM—Or the
Commonwealth to support or facilitate the building of the north-south pipeline?
Dr Horne—No,
not at all—nothing at all.[6]
1.41 Coalition Senators
believe that self sufficiency of urban water supplies should be an objective of
all state governments. No state government should be increasing its reliance
on the Murray-Darling Basin,
especially in relation to urban areas outside the Basin, at a time when others
are seeking to reduce their reliance through increased efforts in areas such as
desalination, stormwater capture, water recycling and improved efficiency.
Where necessary, the Commonwealth could provide support towards such options
being pursued.
1.42 Coalition Senators
believe cleaning up, recycling and re-using Melbourne’s 300
billion litres of waste water for agriculture and industry will not only free
up fresh water from those activities, but will both clean up our coasts,
provide up to four times the water savings as the North-South Pipeline and also
protect the Goulburn Murray
system.
Recommendation 5
1.43 That the Water
Amendment Bill 2008 be amended to prevent construction of the North-South
Pipeline and the extraction from the Murray-Darling Basin of any
water associated with the North-South Pipeline.
Critical
Human Needs
1.44 Coalition Senators
consider that ‘critical human needs’ is not clearly defined by section 86A(2)
of the Bill.
1.45 Evidence provided to
the Committee overwhelmingly favoured the need for the Bill to
more clearly define ‘critical human needs’. To that extent, the inclusion of
‘critical human needs’ provisions was generally supported. However, beyond
this, support and consensus dissipated.
1.46 Whilst there was
general agreement that a clearer definition was needed, there was little
agreement about what should be and what could be the meaning of the human
critical needs provisions of the Bill.
1.47 Coalition Senators
note the evidence from the National Farmers’ Federation that there is no shared
understanding of the term ‘critical human needs’ at this time:
Senator
FISHER—What are NFF’s
views of the meaning of the term ‘critical human needs’ in the bill, and in
particular the meaning of ‘core human consumption requirements in urban and
rural areas’?
Mrs Kerr—Our
view is that critical human needs are the needs that are required to address
core human drinking water requirements. I know some of the states have reserved
critical human needs for particular industries where there would be economic
and social impacts. It leads to the broader question, and I note that you have
raised this issue on a number of occasions. It probably brings to the fore the
broader question of a shared understanding of what critical human needs is. It
is like over-allocation. Everybody talks about overallocation and we all have
different views about what that might mean, and in this case it is a similar
term that probably needs the development of a shared understanding about what
that might be.
Senator
FISHER—So there is no
shared understanding at the moment of the meaning of ‘critical human needs’?
Mrs
Kerr—With the way it has
been implemented there are different aspects in different states that are
probably causing some confusion, and the development of a shared understanding
or defining of ‘critical human needs’ might be appropriate.[7]
1.48 The Australian
Conservation Foundation’s Dr Arlene Buchan stated
that:
The
way I read the amendment bill, ‘critical human needs’ could cover anything—and,
in fact, they have covered things from abattoirs to golf courses.[8]
1.49 Dr Buchan went
on to question whether the definition could encompass spray irrigation of a
regional golf course.
1.50 Comments of this
nature typified the lack of agreement among witnesses of what should or does
constitute ‘critical human needs’. However, there was broad agreement amongst
witnesses that the Bill should clearly define who or what ‘critical human
needs’ covers, and further, that the Bill fails to do so.
1.51 Indeed, some witnesses
effectively suggested that the critical human needs provisions of the Bill will
make matters worse.
1.52 The
NSW Irrigators’ Council (NSWIC) stated:
Section
86A(2) defines Critical Human Needs (CHN) in such a wide fashion as to render
it effectively meaningless. ..this definition has allowed abattoirs, feed lots
and mines to access water under CHN, which clearly they are not....CHN should be
limited to drinking, sanitation and health only...the bill will entrench a
definition of CHN that is ludicrous.[9]
1.53 Coalition Senators
consider suggestions that ‘critical human needs’ has a ‘common sense’ meaning
to be unconvincing and unacceptably dismissive of the wisdom of testing the
meaning of the term.
1.54 Coalition Senators
note the comment in the majority report that:
this
definition (in the Bill) has emerged out of a protracted
process of negotiation...
1.55 This is an indictment
of a key outcome of the intergovernmental processes, and illustrates the
fallacy of suggestions that ‘critical human needs’ has a ‘common sense’
meaning.
1.56 Leaving the definition
of ‘critical human needs’ deliberately vague unjustifiably prolongs uncertainty
and lack of transparency. Worse, it exacerbates past and ongoing perceptions
of inequity. Worst of all, it pushes the hardest decisions over critical human
needs onto a newly established Authority, and sets the Authority up for a fall.
1.57 The Bill raises more
questions than it answers in relation to ‘critical human needs’ and in this
respect provides clarity, certainty and transparency for nothing and no one.
Recommendation 6
1.58 That the definition of
‘critical human needs’ be amended so that the grounds upon which water is
allocated in any given instance for critical human needs is clear, certain,
equitable and transparent.
Climate
Change and 'new knowledge'
1.59 Coalition Senators note
concerns expressed by the NSWIC with regard to the impact of proposed New
Section 75(1A) insofar as it impacts on the calculation of the Commonwealth
Government policy component or the new knowledge component related to any
reduction in the long-term average sustainable diversion limit for the water
resources of a water resource plan area. These concerns were highlighted in the
NSWIC submission that stated:
From
the early discussions with respect to the NWI right through the consultation
with respect to the Water Act 2007, irrigators have made the point that
the definition of what is climate change and what is new knowledge has not been
determined. This determination will have significant implications for
irrigators with respect to compensation.[10]
1.60 Coalition Senators
believe the impact of the amendment on the rights of irrigators to receive
appropriate and adequate compensation for any reduction in entitlement needs to
be clarified by the Government.
![Signature](/~/media/wopapub/senate/committee/rrat_ctte/completed_inquiries/2008_10/water_amendment/report/d01_1_jpg.ashx)
Senator
Simon Birmingham
![Signature](/~/media/wopapub/senate/committee/rrat_ctte/completed_inquiries/2008_10/water_amendment/report/d01_2_jpg.ashx)
Senator
Mary Jo Fisher
Senator
the Hon. Bill Heffernan
![Signature](/~/media/wopapub/senate/committee/rrat_ctte/completed_inquiries/2008_10/water_amendment/report/d01_4_jpg.ashx)
Senator
Fiona Nash
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