Additional comments from Coalition senators
The Coalition is committed to Murray-Darling Basin reform,
indeed it was under the Coalition that this reform was started with the passing
of the Water Act in 2007. We support the need to return more water to the
environment, however, believe it should be done so in a way that balances this
objective with the need to provide for robust rural communities and for the
Basin to remain Australia’s food bowl.
The triple bottom line consideration of social, economic and
environmental factors is essential to deliver reform in a way that minimises
the cost to communities of reduced water availability and ensures we improve
the efficiency of both river systems and irrigation communities.
The triple bottom line approach was a core part of the Howard
Government’s water reform strategy, however, sadly, since 2007 this approach
has not been followed and we have seen an ad-hoc approach to buybacks and
systemic underspending on water saving infrastructure projects.
In excess of $500 million of the funds set aside by the Howard
Government for water saving infrastructure projects has been spent on
administrative functions, and even advertising campaigns. Further funds have
been spent in infrastructure projects that do not save any water. By treating
this funding pool as a general purpose pool of funds, Labor has undermined our
ability to ensure reform is delivered at least cost to communities in the
Basin.
Progress to date shows the disparity in outcomes under the
buyback program compared to the infrastructure program. In excess of 1031GL has
been secured through buybacks yet just 284GL has been secured or is under
contract through the infrastructure program.
The non-strategic approach to this reform is compounded by the
endless delays and uncertainty inflicted upon communities by the Government’s
inability to meet deadlines and deliver on commitments. More than $100 million
has been spent by the Murray-Darling Basin Authority on developing the Basin
Plan, which does not include the extensive engagement by communities and
stakeholders in endless discussions over the five years this process has been
underway, much of which they feel has been of little impact on the outcomes or
proposals.
Murray Valley Winegrowers Inc Chief Executive, Mr McKenzie,
highlighted the ad hoc process being applied, the effect this uncertainty is
having on their ability to assess the Basin Plan and the impact it will have on
their community:
We do not have the capacity to fully
assess the plan at this point for a couple of reasons. One is that we do not
have a water recovery strategy and we do not have an environmental watering
plan in final form. They are still works in progress... From our perspective,
we have always held that it would be better to do the work first rather than
push on with a target which, with respect, is a political target, not a target
to deliver a plan which the whole community in the basin can sign off on. That
said, we are fatigued and we need certainty.[1]
These two Bills, especially the rushed way in which they have
been introduced into and debated within the parliament with limited prior
consultation on their content, have compounded concerns about the management of
this reform process from a number of groups and stakeholders, such as the
Australian Dairy Industry Council Inc:
The dairy industry is uncomfortable with the Water Act being
amended to give effect to a Basin Plan and IGA that no one has yet seen, on a
‘trust us’ basis that the Plan and IGA will contain the appropriate safeguards.[2]
The Coalition believes that angst in river communities should
be reduced by not just providing certainty to communities about how much water
is to be recovered but also giving certainty that it will be recovered by
delivering on promises to prioritise water saving infrastructure investments
and environmental works and measures, while limiting remaining buybacks
wherever possible.
Further, the Coalition believes that where safeguards are being
promised by the government, such as the further recovery of water being subject
to a ‘no socio-economic disadvantage test’, they should be enshrined in
legislation. Communities have lost trust with the government and much of the
process surrounding Murray-Darling reform. They should not be asked to simply
take on trust commitments to safeguard their future when such commitments could
easily be enshrined into the Bills under consideration.
Water Amendment (Long Term Average Sustainable Diversion Limit Adjustment)
Bill 2012 [Provisions]
The Coalition supports the principle of the adjustment
mechanism and welcomes its adoption as a sign of constructive engagement in the
Basin plan process by all of the Basin States.
However, the Coalition held deep concerns when this Bill was
introduced as it sought to remove ministerial and parliamentary oversight of
potentially significant changes to Sustainable Diversion Limits across the
Basin.
The MDBA outlined the magnitude of the changes possible which
under the Bill as originally proposed it would have responsibility for:
In the current draft of the Basin Plan, the net effect of any
proposed SDL adjustments cannot exceed plus or minus 5 per cent of the proposed
surface water SDL for the Basin of 10,873 GL/Year, which equates to
approximately 540 GL.[3]
The Coalition notes that there are plans and expectations that
the adjustment mechanism will be applied in both directions. The Water
Amendment (Water for the Environment Special Account) Bill 2012 provides
for the recovery of more water for the environment under the adjustment
mechanism, while the Victorian Farmers’ Federation highlighted the potential to
use the adjustment mechanism to achieve the same environmental outcomes under
the 2750GL base figure in the Basin Plan with less actual held entitlement:
... there are about 650 gigs of works and measures, so we could
get away with 2100 gigs of actual held entitlement to give 2,750 of
environmental outcomes. I think this is an example of it not being about the
amount of entitlement being held; it is about the environmental outcomes that
can be achieved with a smaller volume of actual held entitlements.[4]
The potential for such significant changes without any
oversight caused concerns amongst both irrigators and environmentalists. The
National Farmers’ Federation stated that:
...it is the view of many agricultural stakeholders that the
MDBA is incapable of listening and hearing community concerns and incorporating
these into subsequent iterations. Consequently, the NFF supports that the
Minister or the MDB Ministerial Council retains oversight powers over the SDL
adjustment mechanism.[5]
The River, Lakes and Coorong Action Group expressed concerns
arising for different reasons:
The implementation of a Murray Darling Basin Plan is a new
process with many unknown factors, not all predictable. It is desirable that
there should be the utmost transparency and reflection at all stages of
implementation. The ongoing oversight of the Minister is also necessary to
protect the Murray Darling Basin Authority from undue influence from any one sector.[6]
The Coalition is pleased that the Government has listened to
concerns raised by both us and various stakeholder groups and agreed to amend
this Bill to restore Ministerial and Parliamentary oversight. The Coalition
appreciates the cooperative approach taken by the Government in providing such
amendments.
Water Amendment (Water for the Environment Special Account) Bill 2012
The Coalition is concerned that this Bill appears to have been
hastily put together, poorly thought out, or both. This Bill was announced with
much fanfare by the Prime Minister seeking to gain as much political capital as
possible in South Australia.
However, time and scrutiny have proven what is so often the
case with the Prime Minister’s announcements – words and reality are miles
apart. The Australian Conservation Foundation states that:
Despite statements by the Prime Minister and the Water
Minister that the Special Account will provide for the recovery of 450 GL of
environmental water and the achievement of the environmental outcomes
associated with a total recovery of 3,200 GL, the Bill fails to guarantee the
recovery of any specific volume of environmental water.[7]
Meanwhile, many irrigators are concerned that the Bill allows
for further buybacks despite contrary promises made at the time of the Bill’s
announcement:
The Federal Minister responsible for the Basin Plan has made
it clear that there are ‘downsides for local communities’ from buybacks and has
clearly stated that this Bill is designed to ensure that any water recovered
from Basin communities above 2750 GL/y be refined to on-farm infrastructure,
yet clause 86AD 2(b) makes it very clear that large scale water buybacks are
still very much on the agenda.
While there is much concern of the content of this Bill, it is
also puzzling why this Bill has been introduced prior to the finalisation of
the Basin Plan. Coalition Senators cannot see any reason, other than politics,
why a Bill that aims to recover water over and above that recovered by the
Basin Plan has been introduced ahead of the Basin Plan. Murray Valley
Winegrowers Inc. viewed this situation as:
In broad terms, we would describe the process as cart before
the horse, as we have worked through. It has been extremely difficult, I have
to say, in defence of the MDBA, to play catch-up all the way through this
process in some ways. The process has been galloping ahead of them constantly.
Many stakeholder groups expressed deep concerns that the Bill
fails to provide the guarantees of social and economic outcomes the Prime
Minister made when announcing the so-called 3200GL target. The National
Irrigators Council believes:
Despite the Government’s stated intentions ‘that the
additional 450GL of environmental water to be obtained through projects funded
by this Bill to ensure there is no social and economic downside for
communities’ there is nothing in the Bill which specifically guarantees the
‘upward movement’ will not cause social and economic downsides for communities.
The Bill should be amended so that it specifically states
that all projects funded under the provisions of this Bill are subjected to a
‘no detriment’ economic and social impact test before being approved.[8]
The Victorian Farmers’ Federation further states that:
To ‘enhance environmental outcomes’ by the method suggested
in the Bill (86AA (1)), there will undoubtedly be a socio-economic impact. This
must be addressed within the framework of the Bill. It is simply unacceptable
to relegate this to a few dot points where the literal use of the money is
outlined at 86AD, Purposes
of the Water for the Environment Special Account. This leaves the VFF
with the view that government is of the belief that simply providing money
towards socio-economic issues which arise will solve them. This is simply not
the case.
The Australian Conservation Foundation also acknowledged the
need to assess the wide range of social and economic impacts alongside
environmental impacts and to do so based on robust evidence:
...decisions should be made on the basis of credible and robust
social, economic and environmental cost-benefit criteria which incorporates the
interests of all affected stakeholders, not just large consumptive water users.
This includes business, recreational, environmental, indigenous, local government
and community interests.[9]
The concerns of irrigation communities about the potential
impacts of further water recovery have been exacerbated by the non-strategic
approach to water recovery to date, which was highlighted earlier in these
comments. The effects of excess non-strategic buyback and limited delivery of
water saving infrastructure projects threaten the viability of some irrigation
schemes and communities, as highlighted by Murray Valley Winegrowers:
We believe we are at a tipping point ... the water authorities
– Lower Murray Water in Victoria and Western Murray Water on the New South
Wales side – are at a point where their capacity to deliver reasonably economically
priced water which is not going to push those irrigators out of business
through water charges is at a tipping point.[10]
Considering the commitments made by the Government to protect
communities against socio-economic detriment the Coalition believes amendments
reflecting these commitments are warranted to ensure water recovery occurs via
means that deliver socio-economic equivalence or better.
The Coalition have noted statements indicating such guarantees may
be embedded in the Plan, such as this request made by Minister Burke to the
MDBA:
The Basin Plan should include criteria for determining
adjustments to surface water SDLs due to ‘efficiency measures’ so that water
recovery projects giving rise to an adjustment which reduces the SDL (i.e. for
improved environmental outcomes) do not worsen social and economic impacts
compared with 2750 impacts. This should be evidenced by the participation of
farmers in programs providing investment in water efficiency and recovery
projects on their farms, or, in the case of alternative arrangements proposed
by a State, assessment by that State that the project(s) they propose will
achieve neutral or improved socio-economic outcomes.[11]
Minister Burke’s second reading speech for this Bill also
highlights his belief that a ‘no socio-economic disadvantage’ test applies in
practice to these reforms, if not in this actual Bill:
Importantly, the plan being proposed by the Murray-Darling
Basin Authority stipulates that additional water beyond the benchmark should
only be acquired through methods that deliver additional water for the
environment without negative social and economic consequences such as
infrastructure.[12]
However, the Coalition believes that as we have not seen the
final Plan it would be prudent to embed these commitments, or something
similar, in this legislation to remove all doubt about the actual delivery of
the Government’s commitment to avoid socio-economic detriment. This point was
also made by the National Irrigators Council:
...if it is a triple-bottom line approach then put it into the
Act and make that very clear in the Act. Let us not pretend that a legislative
instrument is the Act. It is not. It is subordinate to that. So put it in
the Act.[13]
The Coalition also notes that implicit in the commitments being
made by the minister is a reliance on infrastructure measures to recover the
additional water rather than further buybacks. However, numerous submitters
such as the National Farmers Federation and Murray Valley Winegrowers expressed
concerns that this Bill in paragraph 86AD(2)(b) still appears to allow for
further buybacks, in contrast to the Ministers assurances.
In response to questioning about this paragraph the Department
sought to reassure those concerned by explaining the inclusion of paragraph
86AD(2)(b) as follows:
Essentially this clause is there because there is a consensus
among basin jurisdictions...that in addition to the actual infrastructure
investment on-farm, which traditionally has involved the spending of the cost
of the infrastructure in return for half of the water recovery, these projects
under this program would do that; there would be an investment in
infrastructure in return for half of the water saving but it would have an
associated linked purchase at the farm level for the remainder of the water
saving...This would mean that the farmer would get the return on the
infrastructure and additional water saving, which would then be sold at market
price...It is not imagined in that particular provision of the bill that there
would be a standard water buyback associated with that 450 gigalitres.[14]
Once again, as with the ‘no socio-economic detriment’ test,
Coalition Senators believe the legislation should be amended to reflect the
assurances being given by the Government that general buybacks will not occur
under the funding appropriated in this Bill.
Environmental groups expressed a different concern that the
promises of the Prime Minister’s announcement do not match the reality of the
legislation. Many groups feel this legislation represents a betrayal of the
commitment given by the Prime Minister to achieve a 3200GL reduction, including
Environment Victoria who stated:
The Bill does not commit to recovering 450 GL of
environmental water for the Murray as announced by Prime Minister Gillard,
instead it aims to increase ‘the volume of the Basin water resources that is
available for environmental use by up to 450 gigalitres’ (86AA (3)(b)).
This is a central flaw in the Bill. The clause requires amendment to read ‘by at
least 450 gigalitres’ to make good on the Prime Minister’s commitment.[15]
The Conservation Council of SA and the Wilderness Society
similarly thought that:
[The Bill] does not afford sufficient priority or guarantees
with respect to the 450 GL additional water resource promised by the Prime
Minister.[16]
This evidence clearly shows that the Prime Minister has been
caught out embellishing the fact to suit her political ends and again
demonstrates that the Prime Minister places securing media headlines ahead of
presenting the facts of the matter in an even handed manner.
The Coalition nonetheless understands the arguments made by the
Department of Sustainability, Environment, Water, Population and Communities’
that the capacity of the Bill is limited by the constraints within the SDL
adjustment mechanism and other factors:
Essentially, for that slice of water above the 2,750 the bill
creates the legal framework, including the special appropriations, so that
there is clarity and certainty around the appropriation of those monies because
it is not until a substantially later point in time that the SDL adjustment
mechanism kicks in and triggers other consequences... It provides a special
appropriation and a fund to provide a framework with a given amount of money to
recover water. The actual water recovery obviously depends on the vagaries of
the future, including future prices and so forth. It is a commitment to money
which we expect to progressively translate to water over time as the projects
are committed and come into actuality.
Coalition Senators oppose the last minute amendment proposed by
Government Senators in the majority report to delete the words "up
to" from paragraph 86AA(3)(b). Given the structure of this legislation,
which appropriates a fixed amount of funds, and the advice provided by the
department to the committee, the proposed amendment is clearly unworkable, unachievable
and unacceptable.
The Coalition notes the unusual step taken in this Bill to
appropriate funds so far in advance. We are particularly concerned by what
appears to be a lack of work done to justify the amounts being appropriated and
their adequacy to meet the stated objectives of this Bill.
The Coalition is especially concerned about the costs
associated with addressing the constraints within the system that would require
removal under a 3200GL scenario. How a figure of $200m for constraints removal
was identified is unclear, as are the ramifications if this funding pool is
insufficient to remove all constraints necessary or what compensation may be
forthcoming to those potentially affected by such constraints removal.
The practical implications of constraints removal are real and
come with various costs, as demonstrated by the example of McCoys Bridge given
by the Victorian Farmers’ Federation:
If you go to the Goulburn Broken Catchment Management
Authority and look at their Lower Goulburn floodplain risk assessment, it is a
nonsense to say that you can put 40,000 megalitres a day passed McCoys Bridge
without causing serious flooding of not only public property but also private
property.[17]
Senator McKenzie expanded further, stating:
If you look at the Goulburn Broken Catchment Management
Authority's environmental flow hydraulic study, it says that if you had that
much water at McCoys Bridge, you would flood 100 buildings,
you would flood 250 kilometres of road, you would flood 8000 hectares of
dryland agriculture and you would flood 1000 hectares of irrigated agriculture.[18]
The coalition senators are also concerned that the ambiguity of
legal liability of flooding events and the affect that flooding events could
have on both public, private and environmental assets.
Many groups are concerned about the consequences for this
Barmah Forest, where the largest eucalypt red gum forest in the world cannot
physically cope with the volumes of water being proposed and will suffer
tremendous damage. These concerns have been inadequately addressed. These
concerns have been inadequately addressed. Mr McKenzie of the Murray Valley
Wine Growers articulated this at the hearing, saying in relation Barmah Forest
that ‘it will drown’.[19]
The Wilderness Society and South Australian Conservation
Council noted that:
Flooding of flood plains can bring positive benefits as well
as problems for farmers and irrigators. The costs, benefits and risks need to
be assessed[20]
ANEDO and Environment Victoria expressed concerns that CEWH’s
liability was unclear, stating:
They could be held liable under the private flooding
provisions of the Water Act 1989 (Vic),4 or under the common law of
nuisance or negligence, for causing water to flow onto private property in a
way that causes personal injury, property damage or economic loss.[21]
The National Farmers Federation and The MDBA also acknowledged
the difficulties of addressing constraints, as well as the potential benefits,
all of which point to the complexities in knowing whether the funding provided
for their relaxation is adequate:
...if relaxation of constraints can lead to a better
environmental outcome without social and economic harm, I think people would
say that that is a positive way to look at it. But we should not think we can
just click our fingers and that all constraints would be gone and there would
be no further third-party impacts from doing that. I think that is why we are
saying that they require careful examination as to the potential risks which go
with the relaxation of constraints as well as the potential benefits.[22]
One of the objectives of returning water to the environment
is to reinstate some of the natural flooding events that used to happen. There
is development now on some of the floodplain areas, so there is a risk, if
there are floods in the future, that private property would be affected ... There
is a fundamental tension between the issue of increasing water on the floodplain
and the incidence of private property, and it is an issue that the authority
and particular river operators are very aware of.[23]
It is clear that far more work will need to be done to
determine the actual cost and implications of removing constraints than has
been undertaken to date, which will clearly impact on the effectiveness of this
legislation to recover the environmental water it targets under the terms
required by the adjustment mechanism.
Coalition Senators hope the Government will address the
numerous concerns outlined herein before a vote on this Bill is taken and
especially expects that such a vote should not proceed until the final Basin Plan,
Water Recovery Strategy and Intergovernmental agreement are released.
Coalition Senators also recommend that, for the sake of clarity
and to avoid all doubt, this Bill be amended to explicitly enshrine a ‘no
detriment socio-economic test’ and prohibit use of the funds appropriated under
this Bill for general or open buybacks, as per the commitments given by the
Minister on these matters.
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Senator Simon Birmingham
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Senator
Bridget McKenzie
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Senator Anne
Ruston
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