Chapter 1 Certain matters relating to the Murray Darling Basin Plan

Introduction

1.1                   The Committee has maintained an ongoing interest in matters relating to the development of the Murray Darling Basin Plan since it released its report into the Guide to the Basin Plan, Of Drought and Flooding Rains in June 2011.

1.2                   In light of this ongoing interest, on 29 May 2012, the Minister for Sustainability, Environment, Water Population and Communities asked the Committee to inquire into and report on certain matters concerning the proposed Murray-Darling Basin Plan. The Committee adopted the terms of reference on 31 May 2012.

1.3                   In recognition of the focussed nature of the inquiry, the Committee directly sought submissions from relevant stakeholders on terms of reference one and three. The Committee sought public comment on term of reference two.[1]

1.4                   The Committee received 40 submissions. A list of submissions is at Appendix A. All public submissions are on the Committee’s website.[2]

1.5                   The Committee held three public hearings in Canberra. Witnesses at public hearings are listed at Appendix B.

1.6                   In light of the need to report in a timely manner to ensure that any recommendations are able to be considered alongside those due to be made by the Murray Darling Ministerial Council on 9 July 2012, this report contains a series of recommendations based on evidence received rather than a wide-ranging discussion of the issues.

1.7                   It is undesirable to prolong uncertainty by unduly delaying laying the Plan before the Parliament, however there are a number of issues that need to be resolved prior to this step that will allay some of the current concerns and uncertainty.

1.8                   The Committee acknowledges that there will continue to be a level of concern and uncertainty around water recovery mechanisms and as the knowledge around Basin management continues to improve, this will change the knowledge around sustainable diversion limits (SDLs). However, the Committee agrees with the sentiment put to it in this inquiry by an irrigator – we need to agree on a set of general principles with the understanding that our knowledge will continue to improve.[3]

1.9                   Nonetheless, this report recommends a number of areas where the Committee believes that information needs to be provided before the Plan is put before the Parliament to give Members, Senators and the community a level of certainty regarding both the planning process and science necessary prior to the Plan’s finalisation.

1.10               All evidence to this inquiry and the Committee’s previous report, Of Droughts and Flooding Rain, containing a lengthy discussion on the issues confronting the Murray-Darling Basin, are available on the Committee’s website.

Progress to date in water recovery through both irrigation infrastructure investments and water purchase

1.11               There is wide support for appropriate and diverse water recovery through infrastructure projects, environmental works and measures and some strategic purchases. However, the Committee received evidence that the Commonwealth has provided a wide range of estimates of water recovered to date and anticipated recovery strategy.[4] This range has failed to be explained and is adding to the ongoing concern and uncertainty in communities.

1.12               The Department of Sustainability, Environment, Population, Water and Communities (SEWPAC) told the Committee that at the end of May 2012, of the 2,750GL in the proposed Plan, 1,480GL is under contract, which includes State projects, environmental works and on-farm efficiency projects.

1.13               If 2, 750GL is assumed to be required, a remaining 1,270 GL is still necessary to be recovered to meet the proposed target. SEWPAC noted that ‘over the next few years the relative investment in infrastructure to water purchase is very much in favour of infrastructure.’[5]

1.14               A range of other projects have been submitted to this inquiry and to this Committee’s previous inquiry that have the potential to further reduce the requirement to purchase water entitlements. These projects must be fully investigated as a key priority and are set out at appendix D.

1.15               A number of submissions also noted that the Commonwealth has committed to providing a water recovery strategy to outline how water will be recovered through both entitlement purchase and infrastructure projects, but to date has not released this document.

1.16               The Committee considers that a water recovery strategy is an essential planning tool for all stakeholders and the fact that it has not been developed to date is of serious concern.  The Committee considers that it should be released as a matter of priority and well in advance of the introduction of the Plan to the Parliament.

Water trading

1.17               In its May 2011 report, the Committee recommended that the Commonwealth Environmental Water Holder (CEWH) be able to trade holdings into the productive market.

1.18               The Commonwealth Environmental Water Office told the Committee that it is in the process of developing a discussion paper about how the CEWH may be able to trade water and expects to release this in August 2012.

1.19               The Committee considers that it is essential for the CEWH to be able to trade environmental water when there is no need to water environmental assets and demand for water for productive use exists.

1.20               An understanding of how CEWH water trading will work is an essential part of considering the Plan and the Committee considers that it is essential that the Parliament has an understanding of this mechanism well in advance to the introduction of the Plan to the Parliament.

Role of environmental works and measures projects in offsetting SDL reductions

1.21               The role of works and measures, in reducing water necessary for both environmental and productive on- and off-farm uses is considered by this Committee as an essential component in offsetting SDL reductions. This view is widely evident amongst Basin communities.

1.22               The Committee acknowledges that this view is not shared by some environmental groups, who consider that works and measures, while essential, should supplement environmental flows, not reduce SDLs.[6]

1.23               The major river systems of the Basin have been closely managed for decades. In its previous inquiry, the Committee heard extensive evidence from the north to the south of the Basin regarding how essential environmental works and measures are utilised to effectively manage icon sites and ensure adequate watering and river flows.

1.24               In addition, even in the short time available to this inquiry, the Committee received a number of submissions detailing potential environmental works and measures.[7] It is clear that there will continue to be options for works and measures developed that will contribute to the balance between productive irrigation and environmental needs.

1.25               Knowledge of how to manage environmental assets continues to improve. The Committee is of the view that all water savings made through works and measures should be returned to productive use where needed.

1.26               The Committee is aware that the Basin State Ministers have been asked to provide an opinion to the MDBA on whether:

n  the Basin Plan should incorporate a mechanism to adjust SDLs automatically to incorporate water efficiencies gained from works and measures as the works are implemented; or

n  the SDLs be reviewed as part of the 2015 review to take into consideration savings made of works and measures projects and the Plan be reintroduced to the Parliament for approval.[8]

1.27               Both of these options are complex and will require detailed modelling to be developed in order to ensure that there is certainty about SDLs. Nonetheless, the Committee is of the opinion that the Basin Plan should incorporate a mechanism to automatically adjust SDLs to respond to efficiencies made in environmental works and measures.

Monitoring and River Management

1.28               The Committee heard evidence regarding the role that effective river monitoring and management can play in achieving water savings. Some examples put to the Committee are:

n  total river management through computer aided river management which has been demonstrated by Water for Rivers to be an effective river flow management system in the Murrumbidgee river system; ‘targeting environmental releases and water for consumptive use, while minimising river system losses’.[9]

n  strategic buyout and infrastructure reconfiguration of the Lowbidgee Irrigation District on the lower Murrumbidgee in western NSW, estimated to return an average of 100 GL to the environment annually.[10]

n  infrastructure works at Menindee Lakes aimed at reducing evaporative losses.[11]

n  infrastructure works at the Lower Lakes to improve real-time management and reduce evaporative losses.[12]

1.29               The Committee reiterates the recommendations made in its previous report which focussed on improving river management, monitoring and auditing aimed at maintaining the economic viability, productive capacity and environmental sustainability of the Basin.

Groundwater SDLs

1.30               In its May 2011 report, the Committee found that greater work needed to be undertaken by the MDBA to understand groundwater resources and acknowledge the extensive work already done, particularly in NSW, at understanding the SDLs for groundwater.

1.31               In evidence to this inquiry, the MDBA told the Committee that a conservative approach has been taken towards the groundwater SDLs because of the uncertainty of knowledge around groundwater resources.

1.32               The Committee is pleased to note that the MDBA has adopted a policy to place no further reductions on those already undergoing reductions through programs such as the Achieving Sustainable Groundwater Entitlements program to allow time for the results of this program to be realised. [13]

1.33               The Committee further notes that some groundwater users submitted to this inquiry that the MDBA approach was greatly improved.[14]

1.34               The Committee has some ongoing concern about the impact that coal seam gas mining will have on groundwater resources, particularly if there is a level of uncertainty about groundwater resources. The Committee reiterates in the strongest terms that coal seam gas mining activity must be considered within the constraints of the groundwater system.

Tony Windsor MP
Chair
4 July 2012