Budget Review 2014–15 Index

Bill McCormick

Some areas of expenditure in national water policy are reduced in this budget. A further significant development is abolishing the National Water Commission (NWC). Created by the Howard government in 2004, during a time of drought, the NWC is an independent statutory authority designed to monitor the progress of national water reform. Over the years, its role expanded to do much more, including funding research in water-related areas. Now, however, it is to be axed following a recommendation from the National Commission of Audit, which argued that it should be consolidated in the Department of Environment.[1] Its proposed abolition in December 2014 is estimated to save $20.9m over four years. Its key statutory functions will be carried out by other government bodies, yet to be specified, with $2.3 million annually in funding provided to these agencies from former NWC funding.[2]

The Office of Water Science Research will also be terminated, saving $2 million per year over five years from 2013–14.

The NWC was a component of the National Water Initiative (NWI), a plan developed by the Council of Australian Governments (COAG) for sustainable water use in Australia, ensuring that residents and industries have a reliable supply of water in times of drought while protecting the health of Australia’s rivers and groundwater. The NWI has a timetable of key actions with regular assessments and the NWC was created partly to conduct these assessments. The NWC’s first task was developing baseline levels for Australia’s water resources from which the progress of the NWI could be determined.[3]

In order to abolish the NWC, the National Water Commission Act 2004 (NWC Act) will need to be repealed and the Water Act 2007 amended. It is unclear which functions of the NWC will be transferred to other agencies and whether these authorities will have the independent statutory status that the NWC had.[4]

The NWC Act was originally written with a sunset clause of 30 June 2012, designed to give the Commission a finite existence. A review of the NWC by COAG in 2011 concluded ‘that the NWC should continue, without sunset, for the duration of [the] NWI agenda’.[5] Accordingly, the NWC Act was then amended to ensure that the NWC could continue on an ongoing basis. The idea was that it would continue oversight of national water reforms, audit the outcomes in the Murray-Darling Basin, monitor the implementation of the Murray-Darling Basin Plan, and carry out triennial assessment of progress of parties’ commitments to the NWI.[6]

National Water Commission Chair Karlene Maywald said that some of the NWC’s core functions will transfer to other organisations but final agreement on all transfers is yet to be reached.[7] The NWC will finalise its National water reform assessment 2014 (Triennial Assessment) over the next six months.

Reacting to the news, the Executive Director of the Water Services Association of Australia (WSAA), Adam Lovell, and the Australian Water Association (AWA) Chief Executive, Jonathan McKeown, said ‘abolishing the National Water Commission will weaken our ability to engage Australians on water management challenges through future droughts, floods and with population growth.’[8] They called for the key functions of the National Water Commission to continue to be funded.

Earlier the National Farmers Federation had called for the ‘role of an independent authority to drive national water reform’ to continue.[9]

The Australian Conservation Foundation is concerned that the Government abolished the NWC without setting out which agency will be responsible for delivering its ‘critically important functions’.[10]

Sustainable Rural Water Use and Infrastructure Programme—reduced funding

Although the abolition of the NWC is significant, the main savings come from a reduction in funding for water recovery of $168.2 million over two years from 2017–18 and for infrastructure projects of $239.4 million over five years from 2013–14.[11] Water recovery is the process of reducing water consumption in a catchment area to a sustainable level, either through new water efficiency programs, modernising irrigation infrastructure or by the Government purchasing water entitlements (known as water buybacks). Water recovery can make more water available to meet the environmental water needs of the Murray-Darling Basin. The Government will introduce a cap of 1,500 Gigalitres (GL) on the volume of water that the Commonwealth can buy back in the Murray-Darling Basin (MDB).

As at 31 March 2014, the Commonwealth had purchased 1,141,642 GL for the MDB.[12] A commitment to a 1500 GL cap was given as a key component for New South Wales and Victoria to sign the Intergovernmental Agreement (IGA) on Implementing Water Reform in the Murray-Darling Basin.[13]

The National Water Market System project, a COAG initiative that aims to improve the efficiency of water registers and transactions and the availability of market information, will be terminated.[14]

[1].                    National Commission of Audit, Towards responsible government: appendix: volume 3, March 2014, p. 71, accessed 16 May 2014.

[2].        Australian Government, Budget measures: budget paper no. 2: 2014–2015, 2014, p.109, accessed 15 May 2013.

[3].           K Loynes, ‘Who watches the watchers? The end of the National Water Commission, FlagPost, Parliamentary Library weblog, 16 May 2014, accessed 19 May 2014.

[4].           Ibid.

[5].           D Rokalsky, COAG review of the National Water Commission, 6 December 2011, accessed 20 May 2014.

[6].           T Burke, ‘Second reading speech: National Water Commission Amendment Bill 2012’, Senate, Debates, 21 June 2012, pp. 7457–8.

[7].          National Water Commission, ‘Message from the Chair of the National Water Commission Karlenen Maywald’, Distilled: E-news from the National Water Commission, 16 May 2014, accessed 19 May 2014.

[8].          Water Services Association of Australia (WSAA), Call for key functions to remain as National Water Commission abolished, media release, 13 May 2014, accessed 19 May 2014.

[9].          National Farmers Federation, Role of water authority should not go down the drain, media release, 28 April 2014, accessed 19 May 2014.

[10].        Australian Conservation Foundation (ACF), Anti-environment Federal Budget hands out billions in corporate subsidies, media release, 13 May 2014, accessed 16 May 2014.

[11].        Australian Government, Portfolio budget statements 2014–15: budget related paper no. 1.7: Environment Portfolio, 2014, p. 28, accessed 19 May 2014.

[12].        Department of the Environment (DoE), Progress of water recovery under the Restoring the Balance in the Murray-Darling Basin program, DoE website, accessed 20 May 2014.

[13].        T Abbott (Prime Minister) and S Birmingham (Parliamentary Secretary to the Minister for the Environment), States agree to implement Murray-Darling Basin water reform, joint media release, 27 February 2014, accessed 19 May 2014.

[14].        Department of the Environment (DoE), National Water Market System , DoE website, accessed 20 May 2014.


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