1. Introduction

Water is a ‘fugitive resource’1, but also critical to the sustainability of our environment, urban and regional communities, and agricultural production. Effectively calibrating the efficient use of water as a resource is a complex and continuous task.
Growing demand for water and fluctuating weather patterns mean we are required to do more with less – to maximise water productivity for the balanced benefit of the environment, communities and agriculture.
To this end, successive Australian Governments have made substantial investments in water use efficiency programs. The efficacy of these programs, their administration and achievement of long term sustainability goals for the environment and for agricultural production is the subject of this inquiry.

Conduct of the inquiry

On 9 February 2017, the Standing Committee on Agriculture and Water Resources (the Committee) agreed to conduct an inquiry into water use efficiency (WUE) in Australian agriculture. The inquiry was referred by the Minister for Agriculture and Water Resources, the Hon. Barnaby Joyce MP.
The terms of reference for the inquiry were as follows:
The Committee will inquire into and report on water use efficiency in Australian agriculture. The inquiry will have particular regard to:
adequacy and efficacy of current programs in achieving irrigation water use efficiencies
how existing expenditure provides value for money for the Commonwealth
possible improvements to programs, their administration and delivery
other matters, including, but not limited to, maintaining or increasing agriculture production, consideration of environmental flows, and adoption of world's best practice.
The Minister for Agriculture and Resources, the Hon. Barnaby Joyce MP, also noted that the House of Representatives Standing Committee on Environment and Energy would be conducting an inquiry into the management of Commonwealth environmental water resources and therefore suggested that the Committee on Agriculture and Water Resources ‘may wish to limit its consideration of environmental flows in order to avoid duplication’.
The inquiry was advertised on the Australian Parliament House website and on social media. The Committee sought submissions from State and Territory governments, agricultural and irrigation representative groups, environmental groups, academics, and interested individuals.
The Committee received 50 submissions, six supplementary submissions and one exhibit. The submissions and exhibits are listed at Appendix A.
The Committee held 12 public hearings in Canberra, Toowoomba, Narrabri, Harvey in Western Australia, Adelaide, Melbourne and Griffith in New South Wales. A list of hearings and the people who participated in them is at Appendix B.
The Committee held a number of site inspections which provided valuable insights into the implementation of water efficiency initiatives and new technologies. These are outlined in a number of text boxes throughout the report.

Other water policy reviews

Water policy is one of the most heavily scrutinised policy areas in Australia, which is appropriate given its vital importance to regional Australia and the broader Australian economy.
As such, in addition to this inquiry, there are a number of reviews of different aspects of Australia's water policy underway or nearing conclusion. One of the most significant is the Productivity Commission's triennial review of the National Water Initiative (NWI).
The NWI is Australia’s ‘blueprint’ for ongoing water reform and management. It was agreed by the Council of Australian Governments in 2004, and aims to bring a nationally-consistent approach to the management, measurement, pricing and trading of water. In its submission, the Department of Agriculture and Water Resources (DAWR) noted that:
Under the NWI, governments have made a number of commitments, including to:
Prepare comprehensive water plans
Achieve sustainable water use in over-allocated or stressed water systems
Introduce registers of water rights and standards for water accounting
Expand trade in water rights
Improve pricing for water storage and delivery
Better manage urban water demands.2
The NWI was initially reviewed by the National Water Commission (NWC) every two years. However, after completing reviews in 2007, 2009, 2011, and 2014 (following a change to triennial reviews), the NWC was abolished in 2015 and its assessment functions transferred to the Productivity Commission.
The Productivity Commission is currently conducting its 2017 review of the NWI. A draft report was released for comment in September 2017, and the final report will be presented to the Government by 31 December 2017. It will be published in the first half of 2018.
The Productivity Commission is also required to conduct a review of the effectiveness of the implementation of the Murray-Darling Basin Plan at five-year intervals, the next of which must be completed by 31 December 2018.
In addition, the Murray-Darling Basin Authority (MDBA) is conducting an interim evaluation of the progress of the Murray-Darling Basin Plan. In its submission the MDBA said that the review:
will be broad-ranging, including analysis of: environmental water planning, management and outcomes; implementation of water trade rules and the water quality and salinity management plan; implementation of the adaptive management elements of the Basin Plan (such as the Sustainable Diversion Limit Adjustment Mechanism); the progress with Commonwealth water recovery (including the on-farm and off-farm infrastructure improvement programs); and the social, economic and cultural outcomes from all these activities.3
The MDBA submission also noted that the Murray-Darling Basin Ministerial Council agreed in March 2017 to commission an independent analysis of efficiency measures – that is, measures which aim to recover water for the environment in ways that have no adverse social or economic impacts. The MDBA advised that the report is due to be presented in December 2017.4
The Committee also notes that a number of administrative and judicial reviews commenced in 2017 in relation to alleged maladministration of water allocations.

Scope of this report

Collectively, the Australian Government’s WUE programs total more than $15 billion in spending.5 In this report the Committee considers the operation of these Australian Government funded WUE programs. In particular, the Committee is focussed on the efficacy and cost-benefit returns for irrigators, primary producers, communities and the environment.
The Committee considers the administration of these programs, and whether there are improvements that may be made to increase their effectiveness and efficiency.
It is important to note that while this report necessarily refers to irrigation in the Murray-Darling Basin area, this is a national inquiry and considers the implementation of and impediments to water efficiency across agricultural production in Australia. The Committee has sought the views of irrigators from around Australia, and the report includes wide ranging discussions of water use efficiency initiatives and issues experienced in both the Murray-Darling Basin and other areas of the country.
It is also important to note that this report does not examine the Murray-Darling Basin Plan. The inquiry has been conducted during the Plan’s implementation period, which is set to conclude in 2020. The Committee supports the Plan and encourages all Basin stakeholders to work towards its goals and assist in its implementation. While the Committee has reviewed WUE programs which are designed to recover water under the Plan, its recommendations go to systemic operational issues of WUE programs, administration concerns and long-term achievement and sustainability objectives.

Structure of the report

Chapter 2 considers the definitions of WUE and outlines the rationale for Government spending on water use efficiency programs. It provides a brief outline of water use efficiency programs funded by the Australian Government.
Chapter 3 describes the objectives of WUE programs, and summarises the various views on the effectiveness of this approach.
Chapter 4 considers the efficacy of WUE programs, particularly the design, delivery, administration, and evaluation of the programs.
Chapter 5 considers improvements that may be made to gain greater environmental flows and drive implementation of WUE technologies.
Chapter 6 addresses sustainability concerns of regional communities impacted by the transition to WUEs and the future effects of funded infrastructure.

  • 1
    Professor Lin Crase, Submission 26, p. 1.
  • 2
    Department of Agriculture and Water Resources, Submission 18, p. 2.
  • 3
    Murray-Darling Basin Authority, Submission 36, p. 2.
  • 4
    Murray-Darling Basin Authority, Submission 36, p. 2.
  • 5
    Department of Agriculture and Water Resources, Submission 18, p. 5

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