Bills Digest no. 45 2008–09
Water Amendment Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date
introduced: 25 September 2008
House: House of Representatives
Portfolio: Climate Change and Water
Commencement:
Sections 1 3 on the day of
the Royal Assent; Schedule 2 on the date of Proclamation or six
months after the day of the Royal Assent, whichever is the earlier;
Schedules 1 and 3 immediately after the commencement of the
provisions covered by table item 3.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To amend the Water Act
2007 (the Water Act) to make changes to the cooperative water
planning, management and regulatory regime in the Murray Darling
Basin. In particular, the changes reflect agreement by the relevant
States and the ACT to refer constitutional powers to the
Commonwealth to broaden the Commonwealth s planning, management and
regulatory powers.
Located in the south-east of
Australia, the Murray-Darling Basin (MDB) covers over 1 million
square kilometres, equivalent to 14 per cent of Australia s total
area. The MDB extends over three-quarters of New South Wales (NSW),
more than half of Victoria, significant portions of Queensland and
South Australia, and includes the whole of the Australian Capital
Territory (ACT). Well over half of the MDB is in NSW and almost one
quarter is in Queensland. Often referred to as the nation s food
basket , the MDB included 1.65 million hectares of irrigated crops
and pastures, accounting for 65 per cent of the total area of
irrigated land in Australia in 2005-06. The MDB is Australia's most
important agricultural region, with production worth $15 billion in
2005-06 accounting for 39 per cent of the nation's gross value of
agricultural production. Gross value of irrigated agriculture
production in the Basin in 2005-06 was $4.6 billion or 31% of the
Australian total, a decline of 2% since 2000-01. However the volume
of water consumed in 2005-06 for agricultural production, 7,720
Gigalitres (GL), was 66% of Australia s agricultural water
consumption.[1]
In 2004-05, industries and
households in the MDB used 52% of the total water consumed in
Australia. The agriculture industry used 85% of the water consumed
in the MDB in 2004-05. The major water users of the agricultural
commodities in 2005-06 were cotton (1, 574 GL), dairy farming
(1,287 GL), pasture for other livestock (1,284 GL) and rice (1,252
GL).[2]
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In 2002 the MDB Ministerial Council
agreed to the Living Murray First Step program, a joint funded
initiative to return up to 500GL per year of permanent new water to
the River Murray by 30 June 2009 as an environmental flow to
protect 6 icon sites that include the
River Murray Channel and five Ramsar
sites:
Barmah-Millewah Forest;
Gunbower-Koondrook-Perricoota Forest; Hattah
Lakes;
Chowilla Floodplain and Lindsay-Wallpolla Islands; and Lower
Lakes, Coorong and Murray Mouth. Further information on the
Living Murray
program can be found at the MDBC website.[3]
To date 133 GL of environmental water has been listed on the
Environmental Water Register and projects which may yield up to
375.7 GL are ready to be implemented.[4]
Details of the projects being under development and implemented
can be found on the Living Murray website.
The 2004 National
Water Initiative (NWI) represents an agreed position of
Commonwealth, state and territory governments on water reform
issues. In part, its origins can be traced back to the 1994 Council
of Australian Governments (COAG) agreement on water resource
policy. Its overall objective, as expressed in paragraph 23 of the
NWI, is to:
achieve a nationally compatible
market, regulatory and planning based system of managing surface
and groundwater resources for rural and urban use that optimises
economic, social and environmental outcomes.
The NWI also mandated the
establishment of the National Water Commission (NWC), which was
subsequently created under the National Water Commission Act
2004. It both assesses the various governments progress in
implementing the NWI and helps its implementation by, for example,
acting as lead facilitator on certain actions under the NWI such as
compatible registers of water entitlements and trades, and
nationally consistent approaches to pricing.
The NWI contains some specific
provisions on the MDB. The NWI also required relevant Parties to
sign a separate agreement to address the overallocation of water
and achievement of environmental objectives in the MDB ( the 2004
MDB Intergovernmental Agreement ). However, in its latest progress
report, the National Water Commission noted that:
While policies, plans or management frameworks
to address over-allocation or stress have largely been put in
place, specific results have been less evident and possible
over-allocation remains a major concern, particularly in the
Murray-Darling Basin.[5]
The November 2006 MDB Water Summit decided that CSIRO was to be
commissioned to report by the end of 2007 on sustainable yields of
surface and groundwater systems within the Murray-Darling Basin, in
light of changes in climate and other issues. CSIRO has been
contracted by the National Water Commission to report on current
and future water availability in the 18 regions of the MDB. These
reports have been completed and the full reports and summaries are
available.[6]
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On 25 January 2007, in an address at
the national press Club, the then Prime Minister announced the
National Plan for Water Security (the National Plan).
In relation to the water resource planning and management in the
MDB the National Plan stated:[7]
The existing mechanism for the
management of the Basin is the MDBC. While the current arrangements
have made some substantial contributions to Basin-wide water
management over the decades, the shortcomings of the current model
are of concern to the Commonwealth Government and, indeed, many
others.
The decisions taken by the MDBC
often reflect parochial interests and do not reflect the best
interest of the Basin as a whole
The
Proposal
It is in the national
interest to secure the long-term economic and social returns to the
Australian community afforded by sustainable access to the Basin s
water resources. This can only be achieved through:
significant investments in water saving infrastructure;
new investments in water resource monitoring and water use
metering;
addressing the over-allocation problem via entitlement purchases
and structural adjustment; and
reforming the decision making processes in the Basin.
It is critical that all four
strategies are implemented together.
The Commonwealth Government will
request the referral of state and territory powers to enable it to
manage the MDB in the national interest.
The Commonwealth Government will
seek the agreement of NSW, Victoria, Queensland, South Australia
and ACT governments to transfer all their powers in relation to the
MDBC to enable the Commonwealth Government to oversight water
management in the MDB.
Subsequently, NSW, South Australia
and Queensland agreed to refer relevant Constitutional powers to
the Commonwealth to enable it to manage the MDB in the national
interest and the ACT agreed to cooperate fully. Victoria did not
agree to the referral of powers at the time but agreed to continue
to negotiate with the Commonwealth to identify mutually
satisfactory ways of achieving agreed outcomes.
When it was introduced on 8 August
2007, the Water Bill did not include each of these four critical
aspects because of the failure to reach agreement with Victoria on
the constitutional referral of powers to the Commonwealth.
The Water Bill was subject to formal
inquiry by the Senate Committee on Environment, Communications,
Information Technology and the Arts (the Senate Committee), but
only six days were allowed for the inquiry to
report. The Senate Committee report contained significant
concerns expressed by ALP, Democrat and Green members of the
Committee.[8]
However, amendments proposed in the Senate were not successful and
the Water Bill was passed without amendment on 16 August 2007. The
operative sections of the Water Act came into force on 3 March
2008.
There have been various intergovernmental agreements relating to
the water resources of the MDB, and particularly the River Murray,
dating back to 1914. The current Murray-Darling Basin Agreement
(the MDB Agreement) was signed in 1992, and given full legal status
by the passing of the Murray-Darling Basin Act
1993[9] by all
the contracting governments. Queensland became a signatory in 1996,
and the ACT formalised its participation through a Memorandum of
Understanding in 1998. The MDB Agreement provides the process and
substance for the integrated management of the MDB.
Before the commencement of the Water Act, the main governance,
operational and consultative mechanisms established under it
were:
- the
Murray-Darling Basin Ministerial Council, political
decision-making body
- the Murray-Darling
Basin Commission, the executive arm of the Ministerial Council
which advises the Council and carries out its decisions. It is
required to equitably, efficiently and sustainably manage and
distribute the water resources of the River Murray in accordance
with the MDB Agreement.
- the Community
Advisory Committee, which provides the Ministerial Council with
advice and provides a two-way communication channel between the
Council and the community.
Some of the key features of the
Water Act, so as far they are relevant to the amendments proposed
in the current Bill, included:
- The establishment of the Murray-Darling Basin Authority (MDB
Authority). Key functions of the MDB Authority are:
- preparing a Basin Plan for adoption by the Commonwealth
Minister, including setting sustainable limits on water that can be
taken from surface and groundwater systems across the Basin[10]
- advising the Minister on the accreditation of State water
resource plans, and
- developing a water rights information service which facilitates
water trading across the Murray-Darling Basin
- The Australian Competition and Consumer Commission (ACCC) was
given a key role in developing and enforcing water charge and water
market rules.
Note that once Schedule 1 of this Bill comes into force, the
current version of the MDB Agreement will be replaced by one signed
at the July 2008 meeting of Council of Australian Governments
(COAG) meeting. This Agreement (the 2008 MDB Agreement), which is
itself in Schedule 1 of the Bill, reflects the various governance
and other regulatory arrangements broadly agreed at the March 2008
COAG meeting and subsequently confirmed in at the July meeting.
At the first COAG meeting after the
election of the Rudd Government, the Commonwealth and NSW,
Victoria, Queensland, South Australia and the ACT signed a
Memorandum of Understanding (MOU) on MDB reform. According to
the Commonwealth Minister for Climate Change and Water, Penny Wong,
the MOU contained an agreement for, amongst other matters:[11]
- the establishment of the independent MDB Authority as the
single body responsible for the overarching management of the
MDB
- arrangements giving the Commonwealth Minister power to approve
a new Basin-wide plan, including a new cap on the amount of water
used in the MDB, based on independent advice from the
Authority
- a commitment to provide for critical human needs and
arrangements to allow South Australia to store water in upstream
dams to ensure there s enough water for Adelaide and towns reliant
on the Murray for drinking water, and
- continuation of the States role in setting annual water
allocations, decisions on natural resource management across the
Basin and a new role to provide input to the Basin-wide plan.
The MOU was then implemented through
the signing of a new
Intergovernmental Agreement on Murray-Darling Basin
Reform.[12]
Notably, this Reform Agreement required the relevant states to use
their best endeavours to pass legislation in their respective
jurisdictions to refer constitutional powers to:[13]
- widen the mandate on the Authority as mentioned above, as well
as making other changes to governance structures
- strengthen the role of the ACCC within the Basin by extending
the application of the water market rules and water charge rules to
cover, respectively, all irrigation infrastructure operators and
all bodies that charge section 91 regulated water charges not just
those that fall within the scope of the Commonwealth s powers,
and
- enable the Basin Plan to provide for critical human water
needs.
The Reform Agreement also aimed to have the amendments to the
Water Act in place and in force from on 1 November 2008. The
current status of the State referral legislation is:
- New South Wales - Water (Commonwealth Powers) Act 2008
received Royal Assent 25 September 2008.
- Victoria - Water (Commonwealth Powers) Bill 2008 2nd
reading in Legislative Assembly 9 October 2008
- Queensland - Water (Commonwealth Powers) Bill 2008 introduced
into Legislative Assembly 7 October 2008
- South Australia - Water (Commonwealth Powers) Bill 2008
introduced into House of Assembly 23 September 2008
The reform of MBD governance arrangements under the Bill are
part of the Rudd government s central water policy, Water for
the Future, release by Senator Penny Wong in April
2008.[14]
Details of the $3.1 billion
Restoring the Balance in the Murray-Darling Basin
Program can be found at
http://www.environment.gov.au/water/mdb/entitlement-purchasing/overview.html.
Under a public tender process, announced in February 2008, the
Australian Government allocated $50 million to purchase water
in the 2007-08 financial year. The result of the tender was that
the Australian Government agreed to purcahse 35GL worth of water
entitlements, to a value of $53 million.
The next round of water entitlement purchases, announced on 8
September 2008, was the first phase of the Government's $400
million program to purchase water entitlements in the northern MDB.
On 10 September 2008 the NSW and Commonwealth Governments purchased
Toorale Station at the Warrego and Darling Rivers, its 14 GL of
water entitlements and the rights to harvest water from the
floodplain for $23.75 million. New South Wales will take
responsibility for preserving the land, and there is an agreed
process for transferring the water to the Commonwealth
Environmental Water Holder.
The third phase of water entitlement purchasing for the southern
MDB in 2008-09 opened from 7 October 2008 and will close on 30 June
2009.[15] The
Minister for Water and Climate Change, Senator Penny Wong said that
environmental water purchases made in South Australia will go
towards achieving the $80 million of water buyback in South
Australia announced by the Prime Minister on 14 August.[16]
In September 2008 the Government announced that it was offering
to buy the water entitlements of small block irrigators in the MDB
who agree to sell all their water entitlement to the Commonwealth
this financial year.[17] The Government will offer up to $150,000 as a special
exit payment, along with other transitional assistance, to eligible
irrigators on 15 hectares or less. The program will cost up to
$57.1 million and yield up to 48 GL of environmental water.
The Government is also inviting groups of irrigators who may
wish to develop coordinated proposals for selling their water
entitlements to the Commonwealth and decommissioning or altering
shared irrigation supply infrastructure under the Restoring the
Balance in the Murray-Darling Basin program.[18]
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The September 2008 MDBC Drought Update made the following
comments about storage levels and the impacts on the environment of
the lower lakes and Coorong:
SYSTEM STORAGE
The current volume of active storage in the
Murray system (Hume Reservoir, Dartmouth Reservoir and Lake
Victoria), is 1,690 GL or 20 % of capacity. This is similar to the
storage level of 1,710 GL at the end of August 2007 but well below
the August long term average of 5,600 GL (or 62 % capacity). There
is an additional 500 GL in Menindee Lakes (which remains under
control of NSW) some of which (about 220 GL) NSW plans to release
into the Murray system between September and December 2008.
All the water currently in storage and under
Commission control is fully committed for critical human needs,
individual carryover, announced allocations, and the river and
storage losses that will occur while supplying this water. A total
of 990 GL is currently committed to South Australia, of which about
350 GL is expected to pass through to the Lower Lakes. However, as
this is only about half the net annual evaporation for the Lower
Lakes, it is expected that the water level in the Lower Lakes will
continue to fall if extreme dry conditions persist.
Elsewhere in the Basin, storage levels are also
very low. The total volume of water in all Basin storages managed
by the MDBC and State governments, is about 5,300 GL, or 23 % of
capacity. In most valleys, the small volumes of water held in
government storages are already earmarked for town water, stock and
domestic supplies, carryover or to meet system losses. Storages in
the Snowy Mountains (which are managed by Snowy Hydro) also remain
at record low levels, similar to this time last year
THE ENVIRONMENT
The prolonged dry period across the southern
half of the Basin continues to severely impact on wetland and
floodplain ecosystems. Whilst portions of the Barmah-Millewa Forest
have received limited flooding as recently as 2005, the last
significant flooding of the mid and lower floodplains of the Murray
downstream of Euston was 12 years ago (see Figure 4). Floodplain
vegetation is under severe stress. The 2007 Living Murray Icon Site
condition report indicates that up to 80 % of River Red Gums are
declining or dead at significant wetlands along the Murray, such as
Koondrook-Perricoota Forest and the Chowilla floodplain.
In November 2007, aerial surveys of waterbirds
along the Murray indicated that the drought had greatly reduced the
availability of wetland and floodplain habitat and this had a
severe impact on waterbird abundance and breeding. The greatest
number of birds was recorded in the Lower Lakes, Coorong and Murray
Mouth where a total of about 250,000 birds and 42 species were
observed. Most of the other Living Murray icon sites supported low
numbers and very little breeding.
In May 2008 a small volume of environmental
water (7.7 GL) was delivered to Gunbower Forest and this has
stimulated an encouraging response from plant and animal life.
Monitoring teams have reported that tortoises are breeding, frogs
are spawning and ducks have arrived to feed. This response
emphasizes the importance of using the small volumes of
environmental water available, to maintain drought refuges along
the river and avoid loss of threatened species.
Overall, however, the riverine environments
across the southern and central regions of the Basin are in severe
decline and this is not expected to improve until there is a very
significant improvement in rainfall and system inflows.
In the northern Basin, the benefits of good
summer rainfall and associated flooding are still evident at some
sites. For instance, at Narran Lakes it has been estimated that
over 80,000 chicks (mostly Straw-necked Ibis) have successfully
fledged, and although the water is receding, the lakes are now
dominated by thousands of ducks and teal. Most wetlands and lakes
along the Warrego and Paroo Rivers are also drying up, but those
still containing some water are supporting large concentrations of
waterbirds.
THE LOWER LAKES
The flow over Blanchetown Weir (Lock 1) is
being carefully managed to maintain the water quality at the major
urban pumping stations between Blanchetown and Wellington. Also, a
target flow of 900 ML/day is passing downstream to Wellington and
into the Lower Lakes. This flow, along with local rainfall and
reduced evaporative losses during the winter months, has allowed
the water level in Lake Alexandrina to gradually rise from its
record low of -0.5 m AHD in April 2008 to its current level of
-0.26 m AHD. This has provided some short term relief and has
delayed the potential for acidification in Lake Alexandrina. To
reduce the risk of acidification in Lake Albert, water continues to
be pumped from Lake Alexandrina, and this has resulted in Lake
Albert s water level increasing from about -0.6 m AHD in April 2008
to about -0.20 m AHD.
However, with the arrival of warmer weather in
spring, evaporative losses will start to increase, and the level of
Lake Alexandrina is expected to start falling again. This will be
closely monitored while short and longer term management strategies
are developed to maintain Lakes Alexandrina and Albert above
acidification thresholds.[19]
Bruce Campbell of the MDBC, in discussing the drought
contingency planing for the Southern MDB, said that present drought
is unprecedented.[20] The difference with earlier droughts is that the
temperature is higher and a one degree increase in temperature
means a 4% increase in evaporation. The dry year evaporation losses
of the Murray between the Hume Dam and Wellington in SA are over
1100 GL per annum. The MDBC did a calculation based on minimum
inflows and found a shortfall of 340 GL. He discussed the lessons
learned from this problem.[21]
- We need a more robust rescue strategy
- There is significant floodplain stress with 80% of river red
gums below Echuca dead or dying, Chowilla Ramsar site has not had a
flood for a decade, and salt mobilisation is likely to be
significant after the next flood
- Acid sulphate soils is a new emerging issue along the lower
Murray and lower Lakes
- Contingency measures are addictive and less effective the next
time they are used, eg with wetland disconnections
- Water trade works Productivity Commission report says that
economic impact of drought reduced by 50% by water trade
- Worse case modelling scenarios in 2030 are the same as the low
flows of the past two years.
The current situation is that the drought is not over,
allocations are dependent on rain and inflows, and low autumn
inflows that we have had and dry winter would predict another low
inflow spring.
At its meeting of 25 September 2008, the
Selection of Bills Committee deferred consideration of the Bill
until its next meeting.
The Greens are on record as intending to refer the Bill to
Committee, and will presumably seek to do so at the next meeting of
the Selection of Bills Committee.[22] This may affect the Government s ability to meet
the COAG target date for commencement of the Bill of 1 November
2008.
It should also be noted that the Senate Rural and Regional
Affairs and Transport Committee has recently tabled its
report on Inquiry into Water management in the Coorong and
Lower Lakes (including consideration of the Emergency Water
(Murray-Darling Basin Rescue) Bill 2008).[23] However, it appears the terms of
reference for this inquiry also incorporate a report into broader
Murray-Darling Basin Management issues, with a separate reporting
date on December 2008.[24]
The Coalition does not appear to have made any direct statement
on the Bill, although have said in their additional comments in the
Senate Rural and Regional Affairs and Transport Committee report
that they support calls for unconditional referral of powers by the
States to the Commonwealth with respect to water management in the
MDB.
Greens Senator Hanson-Young and Independent Senator Xenophon
have been reported as seeking the Commonwealth to pressure Victoria
on MBD water issues so as to provide more water flows downstream,
including for the lower lakes and Coroong wetlands.[25]
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According to the Explanatory Memorandum costings for the
measures under Water for the Future (of which the
amendments under the Bill are only a part) were agreed by the
Commonwealth Government in April 2008 to an overall amount of $12.9
billion ( total resourcing basis) over 10 years. There are no
separate costings for the measures directly related to amendments
in the Bill.
The MDB Authority will retain the fees and charges, if any, that
it collects for cost- recovery purposes.[26]
The Commonwealth does not have unlimited power to pass laws. The
Constitution sets out a range of matters or issues that the
Commonwealth may pass laws on. Most, but not all, are set out in
section 51 of the Constitution. The Commonwealth does not have a
direct power under the Constitution to pass laws on the environment
or water resources. Generally, it has relied on indirect methods to
pass laws on such matters, commonly using the corporations,
interstate and overseas trade and commerce, and external affairs
powers in section 51.
However, section 51(xxxvii) provides that the Commonwealth has
the power to make laws about
matters referred to the Parliament of the
Commonwealth by the Parliament or Parliaments of any State or
States, but so that the law shall extend only to States by whose
parliaments the matters is referred, or which afterwards adopt the
law.
The Constitutional powers on which the Water Act relies are set
out in section 9 of that Act. Notably these include:
- the interstate and overseas trade and commence power - section
51(i)
- the corporations power - section 51(xx)
- the external affairs power - section 51(xxix)
- the incidental power - section 51(xxxix)
- the Territories power - section 122
It appears that none of the powers detailed in section 9 of the
Water Act are constitutionally adequate to support the proposed
extension of the Commonwealth s powers and functions under the
current Bill regarding MDB water resources. For example, under the
2008 MBD Agreement (and reflected in the Bill), the MBD Authority,
will assume responsibility for the current functions of the MDB
Commission.[27] One
such function is the significant role in the hands-on operational
management of water in the MBD. This is not a function that the
Commonwealth can directly legislate for, and the various indirect
constitutional powers mentioned above would not support the
application of Commonwealth legislation in all situations. This is
why the States must refer power to Commonwealth to ensure some of
the key proposed amendments in the Bill are constitutionally
valid.
Schedule 1 amends the Water Act based on referrals of power.
Item 1 inserts proposed Part
1A containing proposed sections 18A 18H
after existing Part 1.
Proposed section 18A contains the definitions
which are relevant to proposed Part 1A, including the terms
Authority , Basin Officials Committee, Murray-Darling Basin and
Murray-Darling Basin Ministerial Council. In particular the term
Agreement means the Murray-Darling Basin
Agreement, as amended from time to time in accordance with that
agreement and as set out in Schedule 1. This means that the
agreement between the Commonwealth and the relevant States will be
included as a permanent Schedule to the Water Act.
Proposed section 18B deals with the reference
of matters by state Parliament to the Commonwealth Parliament,
defining when a State is a referring
State.
A state will be a referring state if
the parliament of the state has referred the matters covered by the
items listed in points a) and b) below, to the Parliament of the
Commonwealth: proposed subsection 18B(3).
a) If the State is a Basin state, the power to
enact:
Part 1A The Murray-Darling Basement Agreement
Part 2A Management of the Basin water resources to meet critical
human water needs
Part 4 Basin water charge and water market rules (other than for
urban water supply after the removal of the water from a Basin
water resource)
Part 4A Extended operation of Basin water charge and water
market rules
Part 10A Transitional matters relating to the Murray-Darling
Basin Commission
Part 11A Interactions with State laws, and the Schedules in the
Bill included for the purposes of those Parts (Schedules 1 and
1A).
If the State is not a Basin State, the power to enact Parts 4A
and 11A, as originally enacted by the Water Amendment Act
2008, to the extent that they deal with matters that are
included in the legislative powers of the parliament of the
state.
b) a limited subject reference that permits the
Parliament of the Commonwealth to make express amendments to the
text referred to in paragraph (a) referred by the state in
question.
Under proposed subsection 18B(5) a State is no
longer a referring State if the parliament of that
State repeals its initial reference of powers referred to in point
a) of proposed section 18B above.
However, a state does not cease to be a referring
State because of the repeal of its initial reference of
powers
The Agreement on Murray-Darling Basin Reform Referral
(Referral IGA) will provide that the Commonwealth will not make any
amendments to Parts 1A, 2A, 4, 4A, 10A and 11A and Schedule 1 as
inserted into the Act by this Bill without the agreement of all
referring Basin States.
Proposed section 18C provides for regulations
to be made to amend Schedule 1 to update the text of the revised
Agreement set out in Schedule 1.
According to Note 1 to proposed subsection 18C(1),
amendments to the Agreement can be made with the agreement of the
MDB Ministerial Council. Under proposed subsection
18C(3) the sunsetting provisions of the Legislative
Instruments Act 2003 do not apply to regulations made
for the purposes of this section.
Proposed section 18D provides that any
protocols made by the MDB Authority under a Schedule to the
Agreement (set out in Schedule 1) are legislative instruments.
According to the Explanatory Memorandum, the protocols allow the
MDB Authority to develop rules and procedures to give effect to the
Schedules made under the Agreement from time to time.[28]
Proposed section 18E of
Part 1A transfers functions, powers and duties of
the MDB Commission to the MDB Authority . It also confers on the
MDB Authority functions, powers and duties as contained under the
Agreement, insofar as they relate to the water and other natural
resources of the MDB, though requiring the MDB Authority to comply
with the Agreement in exercising these functions.
However, in performing its functions under the Agreement,
proposed subsection 18E(4) places limits on the
ability of the MDB Authority to exercise its powers under
Part 10 of the Water Act which deals with special
powers of the MDB Authority. An authorised officer does not have
the power to enter land under subdivision C of
Part 10 for the purposes of monitoring compliance
of, or searching for evidence of a breach of the provisions of
proposed Part 1A.
Proposed subsection 18E(6) qualifies the MDB
Authority s power to enter land in order to gather information as
part of carrying out its functions under proposed Part
1A. An authorised officer must not enter a premises unless
they reasonably believe that it is necessary for the performance of
the MDB Authority s functions. Hence, the conditions of entry are
the same as those required by the MDB Authority in exercising its
general powers to enter land for the purpose of gathering
information.
Proposed section 18F confers
on the Basin Community Committee ( the Committee), powers and
duties as contained under the Agreement, insofar as they relate to
the water and other natural resources of the MDB, though requiring
the Committee to comply with the Agreement in exercising these
functions. These functions are in addition to those listed under
existing subsection 202(2) of the Water Act.
The MDB Authority is required to manage money and assets under
the Agreement in accordance with the terms of the Agreement and its
purpose: proposed section 18G.
If the Living
Murray Initiative requires the MDB Authority to manage the
water rights and interests held under the Living Murray
Initiative, then the MDB Authority must do so:
proposed section 18H.
Item 2 inserts proposed Part 2A containing proposed sections 86A
86J into the Water Act after existing Part 2.
Proposed Part 2A requires the Basin Plan to
include certain arrangements for meeting critical human
water needs as specified in the Reform IGA.
Proposed subsection 86A(2) defines
critical human water needs as those needs
for a minimum amount of water, that can only reasonably be provided
from Basin water resources, required to meet:
- core human consumption requirements in urban and rural areas
and
- those non-human consumption requirements that a failure to meet
would cause prohibitively high social, economic or national
security costs.
In formulating the Basin Plan, the critical human needs to be
taken into account must be informed by the following principles
agreed to in the 3 July 2008 Reform IGA:
- that critical human water needs are the highest priority water
use for communities who are dependent on Basin water resources:
proposed subparagraph 86A(1)(a) and
- conveyance
water[29] will receive first priority from the water available in
the River Murray System: proposed
subsection 86A(3).
According to proposed subsection 86A(3) the
River Murray System is the aggregate
of:
- the main course of the River Murray upstream of the eastern
boundary of South Australia
- all tributaries entering that part of the main course upstream
of Doctors Point (near Albury)
- all effluents and anabranches of that part of the main
course
- the watercourses connecting Lake Victoria to the main
course
- the Darling River downstream of the Menindee Lakes Storage
- the upper River Murray storages, namely:
- Lake Victoria
- the Menindee Lakes Storage
- the storages formed by Dartmouth Dam and Hume Dam
- the storages formed by the weirs, and weirs and locks,
described in Schedule A to the Agreement that are upstream of the
eastern boundary of South Australia, and
- the River Murray in South Australia.
According to proposed section 86B the Basin
Plan must deal with the following mandatory matters:
- include a statement of the amount of water required in each
Basin State that is a referring State (other than Queensland) to
meet the critical human water needs of the communities in the State
that are dependent on the waters of the River Murray System:
proposed paragraph 86B(1)(a)[30]
- include a statement of the amount of conveyance water required
to deliver the water to these communities: proposed
paragraph 86B(1)(b)
- specify water quality trigger points and salinity trigger
points at which water in the River Murray System becomes unsuitable
for meeting critical human water needs: proposed paragraph
86B(1)(c).
Proposed section 86C sets out the additional
matters that must be specified in the Basin Plan in relation to
monitoring, assessment and risk management including:
- arrangements for monitoring matters relevant to critical human
water needs, including monitoring the quality, quantity and flows
of surface water, the health of ecosystems and social impacts on
communities the process for assessing, and managing risks to
critical human water needs associated with, inflow prediction:
- in the River Murray System, and
- in relation to works that are under the control of the body
that is entitled, under the Snowy Hydro Corporatisation Act
1997 of New South Wales, to the Snowy water licence within the
meaning of that Act
- the risk management approach for inter‑annual planning
relating to arrangements for critical human water needs in future
years.
The risk management approach will involve the making of
decisions about whether water is made available, in a particular
year, for uses other than meeting critical human water needs; or is
set aside for critical human water needs in future years:
proposed subsection 86C(2).
Proposed section 86D sets out matters relating
to Tier 2 water sharing arrangements.
Part X of the Agreement creates a three tier system of water
sharing arrangements and provides that the triggers for moving
between the tiers are laid out in the Basin Plan. Tier 1
arrangements are used in periods of normal water availability. Tier
2 arrangements are applied when there is insufficient water under
Tier 1 sharing arrangements to meet conveyance water needs. Tier 3
arrangements come into force in extreme and unprecedented
circumstances.
Proposed section 86D states that the Basin Plan
must detail the conditions under which Tier 2 arrangements would
apply and spell out a reserves policy[31] associated with this, as well as
stating the conditions for a return to Tier 1 arrangements.
The Basin Plan must also specify the arrangement for carrying
water over in storage from one year to another and can provide for
any other matters necessary to give effect to water sharing
arrangements.
Proposed subsection 86D(3) provides that
arrangements for carrying water over must recognise both (a) South
Australia s right (as provided for in clauses 91 and 130 of the
Agreement) to store its entitlement to water and (b) that New South
Wales, Victoria and South Australia are each responsible for
meeting the critical human water needs of their own States, and
will decide how water from its share is used.
Proposed subsection 86D(4) states that
State water sharing arrangements relevant
to New South Wales, Victoria and South Australia, are the
provisions of the Agreement dealing with the sharing surface water
in the Murray River System.
The Basin Plan must detail the conditions under which Tier 3
arrangements would apply as well as stating the conditions for a
return to Tier 2 arrangements. The conditions under which Tier 3
arrangements would apply must be due to there being:
- extreme and unprecedented low levels of water availability in
the River Murray System: proposed paragraph
86E(2)(a)
- extreme and unprecedented poor water quality in the water
available in the River Murray System to meet critical human water
needs: proposed paragraph 86E(2)(b)
- an extremely high risk that water will not be available in the
River Murray System to meet critical human water needs during the
next 12 months: proposed paragraph 86E(2)(c).
Proposed section 86F provides for an emergency
response process in the event that water quality or salinity
trigger points determined by the Basin Plan are reached. If the MDB
Authority s proposed response plan affects State water sharing
arrangements or Border Rivers water sharing arrangements, then the
MDB Authority is only allowed to implement the plans as long as the
Murray-Darling Basin Ministerial Council has given its consent:
proposed subsection 86F(2).
In relation to water resources, the Basin Officials Committee
and the agencies of the Basin States that are referring State or
the Australian Capital Territory, and operating authorities,
infrastructure operators and holders of water access rights, are
prohibited from acting in a manner that is inconsistent with any of
the matters included in or specified in the Basin Plan that relate
to critical human water needs: proposed section
86H.
Proposed section 86J sets out additional powers of the MDB
Authority in terms which are similar to those in proposed
section 18E above.
Item 3 proposes to insert proposed Part 4
consisting of proposed sections 91 100A after
existing Part 3.
Essentially, the key amendments in proposed Part
4 combine to give effect to the goal of creating a uniform
approach to the regulation of water markets and water charges in
the Basin. Significantly, the ACCC is charged with the role of
developing and enforcing water charge and water market rules which
are informed by the policy and reform commitments agreed to in the
National Water Initiative. After considering the advice
provided by the ACCC, the Minister is responsible for making the
water charge and water market rules.
Proposed subsection 91(1) provides for the
following regulated water charges:
- fees or charges (however described) payable to an irrigation
infrastructure operator for:
- access to the operator s irrigation network
- changing access to the operator s irrigation network
- terminating access to the operator s irrigation network
- surrendering to the operator a right to the delivery of water
through the operator s irrigation network
- bulk water charges
- charges for water planning and water management activities
- a fee or charge (however described) that relates to:
- access to water service infrastructure
- services provided in relation to access to water service
infrastructure
- services provided through the operation of water service
infrastructure
- the taking of water from a water resource.
Proposed subsection 91(2) clarifies that
Division 1 (water charging rules) applies to a charge referred to
above only to the extent that to the charge relates to:
- MDB water resources
- water service infrastructure that carries MDB water
resources
- water service infrastructure that carries water that has been
taken from a MDB water resource
- water access rights, irrigation rights or water delivery rights
in relation to MDB water resources.
Under proposed section 92 the Minister may make
water charge rules, applying in MDB States that are referring
States and in the Australian Capital Territory. Water charge rules
are legislative instruments and as such are subject to a
disallowance regime.
Significantly, proposed paragraph 92(3)(c)
provides that water charge rules may give the ACCC the power to
determine or approve all regulated water charges. Similarly,
proposed paragraph 92(3)(c) provides that the
rules may give the ACCC the power to accredit arrangements under
which a State agency may determine or approve a regulated water
charge. In addition proposed paragraph 92(3)(e)
allows the ACCC to accredit arrangements under which a State agency
may determine or approve any type of regulated water charge.
The Minister must seek advice from the ACCC on any proposed
amendments or revocations of the water charge rules:
proposed subsection 93(1). Proposed
subsection 93(5) clarifies that the regulations are to
establish the process which the Minister is obliged to follow in
amending or revoking water charge rules.
Proposed section 94 imposes the requirement on
the ACCC to monitor regulated water charges and compliance with
water charge rules. Under proposed subsection
94(2) the ACCC is to give the Minister a report on the
results of the monitoring.
Proposed section 97 sets out the water market
rules. Significantly, proposed paragraph 97(1)(a)
provides that the Minister may make water market
rules applying to referring Basin States and the
Australian Capital Territory, where these rules relate to an act
that an irrigation infrastructure operator does, or fails to do,
that prevents or unreasonably delays arrangements being made that
would reduce the share component of a water access entitlement of
the operator to allow:
- a person s entitlement to water under an irrigation right,
or
- a part of that entitlement
to be permanently transformed into a water access entitlement
that is held by someone other than the operator.
The provisions in proposed section 98 mirror
those in proposed section 93 above.
As the Explanatory Memorandum states, proposed section
100A is designed to ensure that the ACCC has the necessary
enforcement powers provided for in Part 8 of the
Water Act and under section 155 of the Trade Practices Act
1974, so that it is able to carry out its functions.[32]
Item 4 inserts proposed Part
4A containing proposed sections 100B 100D
before existing Part 5.
Proposed Part 4A puts into effect
Reform IGA allowing the Basin States to extend the
operation of water charge rules and/or water market rules to areas
of the State outside Basin on an opt in basis. It extends the
geographical application of the ACCC s regulatory role in relation
to the water charge rules and/or water market rules.
Significantly, it gives the States a choice of working to
achieve a uniform approach to regulation across Australia. The
ability to opt in also applies to jurisdictions outside the Basin,
including Western Australia, Tasmania and the Northern Territory:
proposed subsections 100B(1) and 100C(1)
respectively.
Item 5 inserts proposed Part
10A consisting of proposed sections 239A
239W after existing Part 10.
This part deals with the transition of functions, duties and
powers from the MDB Commission to the MDB Authority.
Proposed section 239A contains the definitions of
the terms which are relevant to the new Part.
Proposed section 239C provides that the
transitional assets of the MDB Commission become assets of the MDB
Authority. However, proposed section 239D provides
that the ownership and control of River Murray Operational assets
are unaffected, as is the revised Agreement to these assets. Also,
proposed Part 10A does not affect the Living
Murray Initiative assets: proposed section
239E.
Proposed section 239F provides that the
transitional liabilities of the MDB Commission become those of the
MDB Authority. Similarly, proposed section 239T
provides that all monies held or controlled by the MDB Commission
are transitional amounts and must be credited to the MDB Special
Account.
Item 6 proposes to insert Part 11A consisting
of proposed sections 250A-250E after existing Part
11. Proposed section 250B provides that in all
circumstances, the Commonwealth legislation is not intended to
exclude or limit the concurrent operation of a State law. The
Explanatory Memorandum provides the example of where a State sets a
more stringent target. That target would not be inconsistent with
the Commonwealth target and thus would continue to be
operable.[33]
Proposed section 250C provides that
Commonwealth water legislation does not apply to matters declared
by a law of a referring State to be excluded matters.
Proposed section 250D provides that a referring
State can displace the operation of the Commonwealth water
legislation in relation to certain provisions of State laws which
would otherwise be inconsistent with the Water Act.
Item 7 inserts the MDB Agreement into existing
Schedule 1 of the Water Act. This is consistent with
proposed section 18A. Item 7 also
inserts a new Schedule 1A consisting of a map which delineates the
boundaries of the MDB but does not show all of the water resources
within the MDB which are covered by the Water Act.
Back to top
Item 1 repeals the whole of the
Murray-Darling Basin Act 1993 which provides for the
approval of amendments to the former MDB Agreement relating to the
appointment and terms of conditions of Commissioners and Deputy
Commissioners and various miscellaneous provisions relevant to that
Agreement.
Part 2 contains miscellaneous amendments to a number of
Acts.
Item 11 in the Table in section 7 of LIA sets out the Schedules
to the former Murray-Darling Basin Agreement.[34] These are to be repealed.
Minor amendments are made to secure the ACCC s access to
information relating to the effect of, and
compliance with, the water charge and water charge
market rules as they apply if a State or the Northern Territory
chooses to opt in under proposed Part 4A. The ACCC
s regulatory powers for water markets and/or water charges will
extend to areas outside the Basin in recognition that
proposed Part 4A allows States and the Northern
Territory to opt in .
Proposed subsection 155AAA(21) refers to
information obtained by the ACCC in relation to its functions and
powers under proposed Parts 4 and 4A, thus
bringing it under the category of protected information . This is
to make sure that such information is treated in the way as other
information obtained by the ACCC in performing its monitoring and
enforcement functions.
Items 7 37 contain consequential amendments, in
particular to a number of definitions to take into account other
amendments to the Water Act.
Item 42 inserts proposed section
9A after existing section 9 to make clear for the
avoidance of doubt the Constitutional basis for the proposed new
Parts to the Water Act which are contained in this Bill.
Existing subsection 21(3) provides that the Basin Plan must
promote the wise use of all the Basin water resources and promote
the conservation of declared Ramsar wetlands in the MDB.
Item 47 proposes that an additional consideration
must be taken into account in formulating the Basin Plan. That
consideration is the ecological character descriptions of:
- all declared Ramsar wetlands within the MDB and
- all other key environmental sites within the MDB
prepared in accordance with the National Framework and Guidance
for Describing the Ecological Character of Australia s Ramsar
Wetlands endorsed by the Natural Resource Management Ministerial
Council.
Item 49 inserts proposed
subparagraph 21(4)(c)(x) which places a
requirement on the MDB Authority and the Minister to have regard to
any other arrangements between States for the sharing of water when
developing the Basin Plan.
Item 60 inserts proposed
section 43A which requires the MDB Authority to
seek feedback from the Murray-Darling Ministerial Council on the
proposed Basin Plan. In providing the Ministerial Council with its
plan, the MDB Authority must also advise on the socio-economic
implications of its proposed Basin Plan: proposed
subsection 43A(3).
The Ministerial Council has six weeks to respond in writing to
the proposed Basin Plan, providing comments on any aspect of the
plan that is not of a factual or scientific nature:
proposed subsection 43A(4). Failure to provide
comments within that timeframe will be construed as the Ministerial
Council having no comments: proposed subsection
43A(5).
Where one or more the Ministerial Council s members disagree
with any relevant aspect of the Basin Plan, proposed
subsection 43A(6) specifies the procedure that the MDB
Authority must follow. The MDB Authority must consider the matters
and undertake and relevant consultations: proposed
paragraphs 43A(6)(a) and (b). The MDB Authority must then
either confirm the proposed Basin Plan or alter the proposed Basin
Plan, and give each member of the MDB Ministerial Council a copy of
the altered proposed Basin Plan, together with the Authority s
views: proposed paragraph 43A(6)(c).
Once that has been done, the MDB Authority must prepare a
document that summarises all of the following:
- any submissions it received in response to its consultations
and how it addressed those submissions
- the extent (if any) to which its consideration of those
submissions has affected the version of the Plan, or the views,
given to the members of the MDB Ministerial Council, and
- publish on its website a copy of that document:
proposed paragraph 43A(6)(d).
The Ministerial Council then has three weeks to provide further
written notice to the Minister about its views on the proposed
Basin Plan: proposed subsection 43A(7).
Item 63 provides for the insertion of
proposed subsection 44(5A) which states that
should the Ministerial Council have no feedback on the proposed
Basin Plan, this does not affect the Minister s power to give
suggestions or directions to the MDB Authority.
Item 64 inserts proposed section
47A which applies once the MDB Authority has complied with
existing section 47 of the Water Act. Section 47 sets out the
procedure to be followed by the MDB Authority when it proposes to
amend the Basin Plan. Proposed section 47A sets
the time frame and process for the MDB Authority to seek comments
from the MDB Ministerial Council on a proposed amendment. This is
in similar terms to proposed section 43A.
Item 77 inserts proposed section
74A in relation to the States applying the risk management
framework.
The National Water Initiative
identifies three risks of reduction or less reliable water
allocation, under their water access entitlements, arising
from reductions to the consumptive pool as a result of:
- seasonal or long-term changes in climate
- periodic natural events such as bushfires and drought, and
- bona fide improvements in the knowledge of water systems
capacity to sustain particular extraction levels.
Accordingly, the National Water Initiative created a
risk assignment framework intended to apply to risks relating to
future reductions in availability if water for consumptive use.
Basically, the current situation is that water allocations or
reliability for consumptive use were to be shared as follows:
- Until 2014 the risks were to be borne by users
- After 2014, the risks were to be shared in the following way:
- water access entitlement holders to
bear the first 3% reduction in water allocation under a water
access entitlement
- State/Territory governments and the Commonwealth Government to
share one-third and two-thirds respectively reductions in water
allocation under water access entitlements of between 3%
and 6%, and
- State/Territory and Commonwealth governments to equally share
reductions in water allocation under water access
entitlements greater than 6%.[35]
In the Reform IGA, the Commonwealth agreed to take on a greater
share of the risks relating to future reductions in water
allocations and agreed to do so at an earlier date in those Basin
States which assumed their risk sharing obligations under clauses
48 to 50 of the National Water Initiative (as modified by
clause 10.1.3 of the Agreement on Murray- Darling Basin
Reform), and did so by enacting legislation to give effect to
this by 30 June 2009.
Proposed section 74A mandates that the Minister
must make a written determination as to whether a Basin State has
applied the risk management framework provided for in clauses 48 to
50 of the National Water Initiative, as modified by clause
10.1.3 of the Agreement on Murray-Darling Basin Reform, in
its water management law by 30 June 2009. The capacity to extend
for a later date is made where it is the case that despite its best
endeavours, a Basin State is unable to pass the required
legislation before 30 June 2009. Such a determination is not a
legislative instrument: proposed subsection
74A(5). Where the Minister has not made a determination in
relation to a Basin State under proposed section
74A, the risk allocation provision as originally enacted
will continue to apply.
The Minister may revoke a determination in writing if satisfied
that a State water management law no longer gives effect to that
framework: proposed subsection 74A(3). In
considering whether to do so, the Minister may ask the National
Water Commission for advice.
Where a Minister has made a determination under proposed
section 74A, items 76 and
79 insert amendments containing the allocation of
risk in relation to reductions in water availability, which provide
for the additional share of risk that the Commonwealth has agreed
to take on see table below
|
Reduction due to new knowledge over
10 year period
|
Water access entitlement holder
share
|
State share
|
Commonwealth share
|
|
0 to 3%
|
All of the reduction to 3%
|
Nil
|
Nil
|
|
More than 3%
|
All of the reduction to 3%
|
Nil
|
100 % of any reduction from 3% and above
|
Source: Explanatory Memorandum p. 32.
Items 98 101 propose amendments to existing
subsection 172(1) of the Water Act which sets out the functions of
the MDB Authority. In particular, item 99 inserts
proposed paragraph 172(1)(ea) so
that one of the functions of the MDB Authority will be to develop,
in consultation with the Basin States, an integrated water model
for the MDB. Item 100 repeals existing paragraph
172(1)(g) and inserts proposed paragraph
172(1)(g) to allow the MDB Authority to make
recommendations to the Commonwealth or an agency of the
Commonwealth about matters that the MDB Authority considers could
affect the quality or quantity of MDB water resources.
Items 115 117 propose amendments to existing
Subdivision C of Part 9 of the Water Act which relates to the terms
and conditions of employment of MDB Authority members. Each of
those items omits the reference to the Authority Chair and
substitutes a reference to the Chief Executive to reflect the fact
that the Chief Executive will now be the full time Agency Head.
Items 118 121 propose amendments to existing
subsection 189(2) dealing with the conditions under which a
Minister may terminate the appointment of MDB Authority members.
Under item 121 which inserts proposed
paragraph 189(2)(ea), one of the circumstances for
termination is where an MDB Authority member takes on additional
employment (without the Minister s approval) which conflicts or may
conflict with the performance of their duties as an MDB Authority
member.
Items 122 127 amend existing section 201 which
relates to the Basin Officials Committee. These amendments reflect
the fact that the Basin Officials Committee is now established
under the revised Agreement.
Item 128 inserts proposed sections
201A-201C. Proposed section 201A provides
that the Chair of the Basin Officials Committee is to be appointed
by the Minister by written instrument. The Chair must be the
Secretary of the Department or an SES employee: proposed
subsection 201A(2). The Chair of the Basin Officials
Committee is to hold office for the period specified in their
instrument of appointment: proposed section
201C.
Existing section 202 provides that the MDB Authority must
establish an advisory committee, known as the Basin Community
Committee. Under existing subsection 202(5) the Basin Community
Committee s membership must include at least one MDB Authority
member and at least 8 individuals who are water
users or representatives of one or more water
users. Item 130 amends subsection 202(7) to extend
the definition of water users to include a person who is engaged in
interception activities with a significant impact on water
resources.
Items 134 136 amend existing section 205 of the
Water Act to clarify that the Minister cannot give procedural
directions to the Basin Officials Committee. Existing subsection
205(1) provides that the MDB Authority may give an advisory
committee written directions about the way in which the Basin
Officials Committee is to carry out its functions and procedures to
be followed in relation to meetings. However, item
135 inserts proposed subsection 205(1A)
which provides that the Basin Community committee is not subject to
direction under subsection 205(1) in relation to its functions,
powers and duties under proposed section 18F.
Item 150 inserts proposed sections 213A
and 213B in relation to the requirement for the MDB
Authority to prepare an annual corporate plan and budget which will
cover both its role and functions under the revised Agreement. That
corporate plan may be varied at any time, except for that part of
the corporate plan approved by the Ministerial Council under the
revised Agreement.
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Schedule 3 contains transitional provisions. Items
1-3 relate to the transfer of staff and their entitlements
from the MDB Commission to the MDB Authority.
Items 4-6 relate to the appointment of the
Chief Executive of the MDB Authority.
[3] Living Murray internet site: http://www.thelivingmurray.mdbc.gov.au/home;
accessed 7 October 2008.
Angus Martyn, Juli Tomaras and Bill McCormick
14 October 2008
Bills Digest Service
Parliamentary Library
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