1.1
There is absolutely no question we need a plan for this critically
important river system, but there is considerable evidence suggesting the
current version of the Proposed Basin Plan will not achieve any of its key
objectives. Further, it will cause undue financial and social stress for the
communities whose livelihoods depend solely on a healthy Murray-Darling Basin
system.
1.2
In particular, the current Plan will not secure South Australia's future
– it will not protect the Ramsar wetlands, ecosystems and wildlife. Nor will it
give South Australian irrigators a fair go.
1.3
The Plan must be amended and the Murray-Darling Basin Authority (MDBA)
must undertake fresh modelling urgently.
1.4
If this plan is not amended and it passes Parliament in its current
form, we will continue to perpetuate the failures that have occurred since
Federation when it comes to managing this vital resource.
1.5
As detailed in the majority report, the latest version of the
Murray-Darling Basin Plan, again proposes a sustainable diversion limit which
would result in a return to the environment of 2750 GL/y of water for the
Murray-Darling River System.
1.6
This is the same SDL put forward by the MDBA in previous drafts of the
Basin Plan. It is worth noting that this SDL is significantly less than the
proposals of the Guide to the Proposed Basin Plan, which suggested the minimum
amount of water needed to protect the environment was 3000 GL/y.
1.7
This is particularly alarming given the weight of evidence that suggests
the 2750 GL figure will not be sufficient to flush 2 million tonnes of salt
from the system each year.
1.8
I refer to the work of The Wentworth Group of Concerned Scientists,
which comprises of some of Australia's best environmental scientists and
engineers. They state:
1.9
Similarly, the Goyder Institute for Water Research concluded that
"the ecological character of the South Australian environmental assets,
as defined in current water management plans, is unlikely to be maintained
under the Basin Plan 2750 scenario".[2]
1.10
Given these
substantial concerns, it is critical that new modelling is undertaken urgently.
The MDBA conduct urgent modelling of a number of figures above the
2750 GL/y figure, up to 4000 GL/y. This modelling must be publicly
released with a both a technical and non-technical explanation and conducted in
a timely manner.
Recommendation 3
The Murray-Darling Basin Plan is delayed until such modelling is
completed.
1.11
There are
serious concerns regarding the transparency and fairness of the Federal
Government process for awarding taxpayer-funded grants of funding to
irrigators.
1.12
In June 2012,
the Australian National Audit Office (ANAO) report Administration of the
Private Irrigation Infrastructure Operators Program in New South Wales,
raised some serious concerns regarding the operation of this program – a key
component of the Federal Government's $5.8 billion Sustainable Rural Water Use
and Infrastructure Program.
1.13
The ANAO's
report concluded that all applications from funding rounds one and two of the
New South Wales program – which collected a total $649 million of taxpayers’
money – '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'.[3]
1.14
The ANAO
report also concluded that the Department of Environment, Water,
Sustainability, Population and Communities (SEWPaC) had not established
baselines from which to measure water efficiency improvements, nor had it
identified the quality of the water savings that would be returned to the
environment based on these taxpayer-funded investments.
1.15
In another
case of alarming mismanagement, The Victorian Ombudsman's report into the
Foodbowl Modernisation Project – which attracted $1 billion of Federal funding
– found that the project allocated “substantial funding although it had not
undertaken a Business Case and feasibility studies critical to assess and
evaluate investment options"[4]
1.16
The Victorian
Auditor General concluded:
The decision to commit $1 billion was based on advice of
water savings and cost assumptions that had not been verified, technology that
had not yet proven itself and the feasibility of the project, which was unknown.[5]
1.17
These two
examples highlight the alarming inconsistencies and errors in the allocation of
funds, but also emphasise the inequality and unfairness in the way in which
funds for projects have been awarded.
1.18
South
Australian irrigators have applied for funding under a number of Federal
Government programs – most notably the Sustainable Rural Water Use and
Infrastructure Program – but many have been deemed too efficient to qualify.
1.19
The MDBA has
consistently taken a glib attitude towards this issue, particularly when it
comes to measuring the comparative efficiencies of different irrigation
regions. I 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.[6]
1.20
There is a
distinct lack of flexibility in the use and criteria of the infrastructure
fund, which disadvantages early adopters of water efficiency measures and in
particular regions such as the Riverland in South Australia.
1.21
Further, not
only are those upstream receiving money for water efficiency projects, they are
also getting to keep half the water they save.
1.22
This will
skew the buyback market dramatically against South Australia, particularly
given the as the MDBA is committed to using a market based approached to
finding another 101 GL of savings in South Australia after end valley targets
are met.
1.23
Furthermore,
when a Basin-wide cap was first introduced in 1995 it was based on levels of
extraction for New South Wales and Victoria. Those States used modelling based
on hydrological models due to a lack of metering of actual water usage.
1.24
In contrast,
as South Australia had meters, a decision was made to cap use at 90 per
cent of entitlements, which gave some recognition to South Australia abiding by
the 1968 cap. At that time in 1995, usage was only about 82 per cent of
entitlements.
1.25
However with
the setting of Baseline Diversion Limits (BDLs) in the Proposed Basin Plan, it
appears the MDBA – in an attempt to achieve consistency based on usage – has
shifted the starting point to actual use, rather than entitlements.
1.26
The
uncertainty in how the BDL was calculated was discussed in depth by Mr Gavin
McMahon, Chair of South Australian River Communities, at the Mildura hearing:
Senator XENOPHON: Can I just go to Mr
McMahon in relation to pages 147 to 148 of the proposed Basin Plan. It refers
to the South Australian Murray water resource plan, saying that the limit is
BDL—basin diversion limit—minus 101 gigalitres per year and local reduction amount
minus the SDL resource unit shared reduction amount. It says there:
As of 30 September 2011, the reduction achieved is estimated to be 79 GL per
year and thus the gap remaining is estimated to be 22 GL per year in relation
to the local reduction amount for this SDL resource unit.
Do you have any comments on, firstly, how they got
to that figure? It seems to be a bit different from Victoria, where the cap was
1,802 and the gap that is being sought is only 10 gigalitres less. Secondly,
what would be the impact of taking 22 gigalitres out of the Riverland in terms
of actual irrigation areas? Thirdly, you are right—I think Mr Byrne said
it—that the minister acknowledges that South Australia has been an early
adopter, but have you been provided with any form of crediting of that early
adoption and sticking to the cap?
Mr McMahon: The last point is: no, we have
not been credited with anything. I suggested earlier on that we do have an
issue with the baseline diversion limit. We still have an issue, even though we
have had—
Senator XENOPHON: How do they get to it,
though?
Mr McMahon: There is a document that has
been given to us from both the MDBA and the DFW, which shows that there are
different components to the reductions. Our cap adjusted for trade is about 756
gigalitres. The BDL is 665. You have got to take into account the Living Murray
water in there as well, which is about 42 gigalitres. So there is a shortfall
in there of some 50 gigalitres. Some of that is attributed to the SA water cap,
and then there are a number of other things that reduce the cap—things like
improved monitoring, environment and adjusting for climate change and the
like—which then reduced the BDLs.
Senator XENOPHON: Is that document a public
document?
Mr McMahon: No, it is a letter from DFW to
us. I am happy to provide that.
Senator XENOPHON: Could we ask for a copy of
that, please.
Mr McMahon: Yes. That is why we have some
issues over the BDL and its impact on our water security, first up.
Senator XENOPHON: Does it seem a bit rubbery
to you in terms of how they got to it?
Mr McMahon: Yes, I have some concerns about
it...[7]
1.27
Given the
above interchange, it is critical the MDBA urgently clarify how the BDLs have
been calculated in both the current and previous versions of the draft basin
plan.
1.28
South
Australia should receive recognition of its past efforts and adhering to the
cap and for the inconsistencies in the setting of the BDL, but this has not
been addressed in any version of the Proposed Basin Plan.
Recommendation 4
The
MDBA must urgently provide advice as to the methodology for the setting of the
BDL.
Recommendation 5
Urgent
modelling is undertaken to establish the comparative efficiencies of irrigation
communities in the Murray-Darling Basin. The results of such modelling can be
used to fairly determine Baseline Diversion Limits, and take into account such
comparative efficiencies to ensure fair treatment of irrigators.
Recommendation 6
Irrigators
must receive recognition for their past water efficiencies. In the absence of
any prior recognition for past water-saving efforts, the guidelines for the
Sustainable Rural Water Use and Infrastructure Program and other similar
programs should be amended to allow irrigators to apply for funding for
research and development purposes.
Recommendation 7
The
MDBA provide urgent evidence that the current market-based buyback approach
will not distort the water and commodity market.
In the
absence of any available evidence, the MDBA conduct urgent modelling on the
impact the market-based buyback approach will have on those who have not
accessed funds under the Federal Government's $5.8 billion Sustainable Rural
Water Use and Infrastructure Program and other similar programs.
Senator
Nick Xenophon
Navigation: Previous Page | Contents | Next Page