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Chapter 2

Consumptive water limits and water recovery

2.1
A key question for this committee is whether there is scope to improve consistency, transparency, collaboration, and accountability across the different approaches of Basin states in their implementation of the Basin Plan. This chapter considers Sustainable Diversion Limits Adjustment Mechanism projects (SDLAM), Water Resource Plans (WRPs), and water recovery and whether using multiple and varied approaches is an unavoidable complexity in implementing multi-jurisdictional agreements.

Sustainable Diversion Limits

2.2
The Plan limits the amount of water that can be taken from 29 surface water and 80 groundwater resources in the Basin through the use of sustainable diversion limits (SDLs). SDLs represent the maximum long-term average quantities of water that can be sustainably taken from the Basin as a whole as well as from each water resource area (SDL resource unit).1
2.3
In order to determine SDLs, the MDBA assessed the following:
how much water was being extracted from river or groundwater systems for use at the time of the Basin Plan’s development (baseline diversion limits);
the volume of water that could be extracted from river or groundwater systems without serious adverse impacts on the Basin’s environmental health; and
how much water needed to stay in the Basin’s river or groundwater systems so that the environment could thrive.
2.4
Based on this information, the MDBA identified that the sustainable level of extraction from all Basin resources was an average of 10 873 gigalitres (GL) of surface water and 3334 GL of groundwater per year.2 This total volume for the Basin was then divided into Water Resource Plan areas for surface water and groundwater.
2.5
Initial estimates included in the Basin Plan 2012 were based on the best available information at the time and are being improved as advancements in water accounting and modelling occur and as SDLAM projects come into effect.3 Following three reviews and some other minor changes in South Australia, the SDL for the extraction of the Basin’s groundwater was increased to 3494 GL per year in July 2018.4

SDL Adjustment Mechanism

2.6
To provide further flexibility, the Basin Plan also allows for SDLs to be adjusted up or down by a maximum of five per cent in the Southern Basin (approximately 543 GL). This adjustment mechanism (SDLAM) is a suite of projects that is being funded by the Commonwealth to improve river management to make both consumptive and environmental water more efficient. 'Supply projects' either remove constraints to allow higher volumes of water to flow through the system or deliver water more efficiently to the environment. 'Efficiency projects', meanwhile, improve efficiency in water use practices.5
2.7
In terms of timeline, Basin states were required to nominate supply projects by 30 June 2017 and details were released for public feedback in October 2017.6 The MDBA assessed the projects and determined that the implementation of all supply projects would allow 605 GL to remain available for consumption as long as 62 GL could be recovered by July 2019.7 As the 62 GL target by July 2019 was not achieved, the SDL was reduced to 544GL for 2019–20.8 Basin states have until 2024 to design and implement SDLAM projects. At that time, the MDBA will assess projects against their 2017 outcomes.9
2.8
As state governments bring forward more supply measures the volume of water recovery is expected to further reduce. The MDBA reports annually on the progress of projects and the program as a whole, and the assessment is used to calculate and recommend new SDLs.10An SDLAM assessment framework was developed by the MDBA, in consultation with Basin states. The model-based framework includes an independently-developed, science-based, and peer-reviewed test for environmental equivalence. The MDBA uses the framework to assess all projects and the amount of water being saved in order to calculate new water recovery targets.11 However, Tony Webster, currently Managing Director of Policy Partners, and formerly Chief Economist, MDBA, raised concerns in a recent Policy Forum article that there is no reliable way of knowing how much water has been returned to the environment.12
2.9
The Productivity Commission's five year assessment found that there have been delays in the development and approval of SDLAM projects, and dissatisfaction with the level of transparency and consultation. The Productivity Commission concluded that it is likely that some key projects will not be fully operational in 2024. It recommended that Basin governments resolve governance and funding issues for supply measures including risk sharing and monitoring arrangements; develop an integrated plan for delivering supply measures to improve understanding and management of interdependencies; and develop a clear mechanism for consultation on the package and individual projects with local communities.13 The Productivity Commission further recommended that Basin states should be open to extending the 2024 deadline.
2.10
The Joint Basin Governments response advised that governance and funding arrangements for implementation of preconstruction (Stage 1) supply and constraints measures have been established with each state and a National Partnership Agreement is being negotiated for full implementation (Stage 2). It advised that an assessment will be undertaken by the Department of Agriculture to determine whether a project is eligible for Stage 2 funding; and that an interjurisdictional committee had been established to provide direction and support delivery of projects. Basin states will continue to consult with communities on projects while the MDBA will hold annual technical workshops on the SDLAM's rollout.14
2.11
The Productivity Commission further recommended that Basin states should be open to extending the 2024 deadline.15 The Joint Basin Government response advised that every attempt would be made to deliver the program on time. It acknowledged that there could be practical issues with implementation which would be considered for extension on a case-by-case basis.16
2.12
The South Australian Murray-Darling Basin Royal Commission criticised the SDLAM for removing 'the requirement to recover water for the environment in many cases years in advance of even knowing whether the projects said to justify that removal will even come into existence, be effective, or provide equivalent environmental outcomes'.17 The Royal Commission was critical of the application of the SDLAM in reducing water for the environment and being applied in manner that, it contended, is 'the opposite of open, transparent and accountable government decision-making, with a clearly deficient approach to community consultation, and in the face of sustained criticism and concern by informed members of the public and the scientific community'.18 Commissioner Walker found that 'the SDLAM has most likely delayed the chances of achieving the Basin Plan’s intended environmental outcomes by at least five years'.19

Water Resource Plans

2.13
SDLs will be implemented through water resource plans (WRPs), which demonstrate (among other things) how Basin states will comply with water take limits on surface water and groundwater resources and how the water will be used at local levels to achieve community, environmental, economic, and cultural outcomes. WRPs are developed by Basin states in consultation with local communities, water users, peak bodies, and Aboriginal Nations.20
2.14
There are 33 WRP areas in total, covering a range of groundwater and surface water areas across the Basin. By state, there are 20 WRP areas in NSW, five in Victoria, three in Queensland, three in South Australia, and two in the ACT. WRPs are designed to be consistent with the objectives of the Basin Plan and complement existing state legislation and strategic water arrangements.21
2.15
WRPs must address compliance with SDLs and water trade rules, protection of environmental water, water quality and salinity objectives, Indigenous values and water uses, measuring and monitoring, and arrangements for extreme weather events. WRPs must also address residual risks which are those identified after management arrangements have been applied.22
2.16
The Basin Plan 2012 identifies the standard software to use for models underpinning WRPs in the Basin. A hydrological modelling platform called Source was developed by the MDBA, Basin states, and the CSIRO in 2012, and practice notes have since been developed to facilitate transparency, consistency, and efficiency across use of the platform.23 However, each jurisdiction is following its own processes for developing and facilitating feedback on its WRPs.
2.17
Before a WRP can be submitted for accreditation, Northern Basin Aboriginal Nations and Murray Lower Darling Rivers Indigenous Nations are required to review the state's engagement with Aboriginal Nations and provide an assessment to the MDBA. The WRP is then assessed by the MDBA to determine whether its meets Basin Plan objectives. WRPs must address and be consistent with all the requirements in Chapter 10 of the Basin Plan 2012, ensure that SDLs are given effect, provide fit-for-purpose management of Basin water resources, promote greater coordination of water planning across state boundaries, and increase recognition of Indigenous values and water management.24 The MDBA provides advice to the Commonwealth Minister for Water who makes a final decision on whether the WRP will be accredited.25
2.18
Asked about the complexity of the division and layering of jurisdictional responsibilities under the Plan, and the idea that the Basin could be more efficiently managed if it were the responsibility of the Commonwealth alone, the Department of Agriculture explained:
…I think you do need to look at the practicalities of what that could achieve. You started with your example of water sharing plans and water resource plans. Another way of looking at that is that the steps enable communities to engage at the right level of government and with the right level of government on those issues that are of most concern to them. Yes, the states are responsible under existing legislative arrangements and administrative arrangements for developing the water resource plans. They are doing that consistent with the Basin Plan, which is a national agreement; it's not just the Commonwealth. It sits in Commonwealth statute, as you know, but it's a national agreement which is given effect through the Basin Plan. Communities can engage with their state governments on those issues, those plans are finalised and then the value proposition of the Commonwealth and, through its agent, the Murray-Darling Basin Authority, is really to look at that from a whole-of-system level, from a basin-scale level and say: 'Does it meet the requirements of the Basin Plan? Is it consistent with what is expected under the legislation and the plan's requirements?' I know you're portraying the steps—and, yes, there are multiple steps there—but you could also flip the argument and say it's actually the right number of steps that's required to get us a more enduring set of water resource sharing arrangements.26
2.19
The Basin Plan specified that WRPs were to be accredited by 30 June 2019; however, at that date, only one of the 33 required WRPs had been accredited and was operational.27 Where WRPs were not accredited by 30 June 2019, Basin governments signed bilateral agreements with the Commonwealth to ensure that the key elements of plans would be given effect from 1 July 2019 irrespective of their accreditation date.28 As at 30 September 2019, two WRPs are accredited and operational. Four plans have been provided to the Commonwealth Minister for Water for an accreditation decision and there are seven plans with the MDBA for assessment and recommendation decision.29 NSW and South Australia were granted extensions to submit their outstanding WRPs to the MDBA by end of 2019, and all WRPs are expected to be completed and assessed by the MDBA by early to mid-2020.30
2.20
In its five year assessment of the Basin Plan's implementation completed in December 2018, the Productivity Commission raised concerns that the quality of some WRPs may be compromised if they are rushed through the development process in order to meet deadlines.31 In its WRP Quarterly Report for September 2019, the MDBA noted that, 'while challenging, there is a chance the 19 NSW WRPs submitted in late December could be assessed and ready for an accreditation decision by 30 June 2020. Successful accreditation depends upon quality WRPs being brought forward by NSW'.32 However, in December 2019, NSW Ministers issued a statement requesting that the Ministerial Council consider, at its 17 December meeting, pausing the timetable for new NSW WRPs until the drought has broken.33
2.21
Basin states have been reviewing their current legislation to determine whether changes are needed to meet Basin Plan obligations through WRPs; in instances where states need to create new instruments, each jurisdiction will follow their own processes.34 The Victorian Government's submission notes that WRPs are intended to bring state based water management arrangements to a consistent (rather than identical) standard and that the approach respects the sovereignty of each jurisdiction by requiring states to outline how they will each meet SDLs through WRPs.35 Victoria's WRPs do not create any new policy as the state can meet Basin Plan requirements through existing instruments, strategies, plans, and entitlements.36
2.22
The Commonwealth Environmental Water Office (CEWO) submission highlighted its interest in WRPs as they set new rules for water use, including environmental water, which can have significant implications for different species and ecological assets. However, it found that opportunities for engagement on WRPs with Basin states have been varied with each using different mechanisms for facilitating consultation.37
2.23
The South Australian Murray-Darling Basin Royal Commission raised concerns that many of the plans managing groundwater resources continue to fail to have appropriate regard to connectivity.38
2.24
Transitional WRPs have been in place while states prepare their WRPs for accreditation. Transitional plans recognise existing state water plans under the Water Act 2007 and ensure continuity in state management arrangements while WRPs are being developed.39
2.25
Basin states are able to review and amend their accredited WRPs any time; however, changes will need to be assessed by the MDBA and reaccredited by the Minister.40 In early 2019, the MDBA was working in consultation with Basin states to develop guidance for future amendments to WRPs. The Productivity Commission recommended that the MDBA should clarify how it will assess whether changes made by Basin states will require reaccreditation and the process in order to minimise legal complexity and administrate burden.41 In August 2019, the Joint Basin Government response advised that the MDBA is developing a new framework to guide evaluation of WRPs in 2020 in consultation with Basin states.42
2.26
WRPs are valid for the following periods (whichever occurs first): the WRP ceases to have effect; or three years after an amendment to the Basin Plan requires changes to the WRPs accreditation requirements.43
2.27
Information about the progress, content, and assessment framework of WRPs is available from the websites of the MDBA and Basin states. The MDBA has been reporting quarterly on the progress of WRPs since January 2018.44

Reporting and compliance

Transitional arrangements

2.28
A new water accounting and compliance framework based on SDLs commenced on 1 July 2019. As the implementation of some WRPs has been delayed, Basin states signed agreements with the Commonwealth which aim to ensure that all the key components of WRPs will be in force from July 2019. These agreements commit Basin states to report to the MDBA using the methods outlined in either their proposed or accredited WRPs.45
2.29
A cap on surface water diversions was introduced in 1995 to protect the environment and the rights of water users. The Cap introduced long-term limits on how much water could be taken from rivers in the Basin, and required Basin states to work out ways to turn the long-term limits into annual cap targets that take account of weather conditions and availability of water each year. Basin states had to provide data to the MDBA which showed how much water was taken each year compared to the annual cap targets.46
2.30
Under the Cap system, if it appears that more water has been taken in a particular valley than allowed under its Cap limit, the MDBA arranges for a special audit to be conducted by an Independent Audit Group. For most Cap valleys, the trigger for a special audit is when the cumulative balance is a debit of 20 per cent or more of the long-term Cap limit. If the Independent Audit Group confirms that too much water has been taken, the MDBA advises the Murray–Darling Basin Ministerial Council of the breach. The state in which the breach occurred then must advise the Ministerial Council how it will address the issue. Since 1997–98, 18 special audits have been triggered across seven Cap valleys. Of these, 14 have resulted in a declaration of a breach in particular water years.47
2.31
Since the introduction of the Basin Plan in 2012, Basin states have been required to report on water take in each SDL resource unit as well as meet their annual Cap reporting requirements. The MDBA has continued to report on both annual Cap compliance and through transitional SDL water accounting reports during the transition period and these reports are available from its website. The MDBA and Basin states have been trialling monitoring and accounting methods that will be used under the SDL system from 2019–20. As WRPs are accredited and come into effect, it is expected that water take reporting against the Cap system will end.48

The new SDL system

2.32
The MDBA is responsible for monitoring Basin states' compliance with SDLs from 1 July 2019.49 Compliance with SDLs is separate to compliance with WRPs. The Basin Plan sets out how compliance with SDLs will be determined and draws on the processes used in the WRPs to determine permitted and actual take each year.50
2.33
Permitted take is the maximum quantity of water that is allowed to be taken for consumptive use from the SDL resource unit within one year. Actual take is the volume of water taken from the system in the period. Each WRP requires the relevant Basin state to demonstrate how it will determine permitted take for each year to meet the SDL prescribed in the Basin Plan and how it will ensure that actual water take does not exceed permitted take.51
2.34
There are seven different forms of take identified in the Basin Plan: take from a watercourse, take from a regulated river, take by floodplain harvesting, take by runoff dams, net take by commercial plantations, take from groundwater, and take under basic rights. Permitted and actual take is determined either through estimates or calculations depending on the form of take.52
2.35
Where the form of take relates to take under an entitlement, the method relies on volumes recorded in the state Water Register. Basin states' water registers record the volume of water entitlement holders are permitted to take during an accounting period and the volume of water actually taken against the entitlement and provide the most accurate and up-to-date information on water taken through entitlements. However, where there is no recorded entitlement data, such as for domestic and stock rights, an estimate is required to determine the permitted take for the accounting period. Equally, where there is no recorded entitlement data for a form of take, an estimate will be required to determine actual take.53
2.36
Once WRPs are accredited, SDL monitoring and compliance will occur via an annual register of take which is collated by the MDBA.54 At the end of each water accounting period, actual take is subtracted from the annual permitted take. The difference is recorded as either an annual debit or credit. In order to remain compliant, cumulative debt must not be equal to or greater than 20 per cent of the SDL.55 The MDBA will investigate where water usage is over the limit and request that Basin states provide further information. 'Reasonable excuse' provisions include circumstances outside of a Basin state’s control. The compliance framework will monitor trends over time as well as in each year; if overuse patterns continue over a period of time, local plans may need to change so that SDLs can be met in future.56 However, the Murray-Darling Basin Royal Commission argued that the 20 per cent threshold is unnecessarily high and that there is no justification for compliance to be measured against a 20 per cent threshold.57 The Royal Commission also raised concerns that the MDBA has only committed to auditing no more than two water resource areas per year for the purpose of assessing SDL compliance which means that, in theory, it could take up to 11 years or longer for a water resource unit to be audited.58
2.37
The SDL accounting results will be published in the annual Water Take report and include: the Register of Take; a clear statement of the compliance status of each SDL resource unit; all reasonable excuse claims, and whether the claim has been granted; and any associated 'make good' steps and the timeframe in which progress is expected to be made.59
2.38
Any SDL non-compliance result will be investigated over two to four years depending on the investigation required. A final decision to review the permitted take method and reaccredit the WRP or issue a 'growth in use' notice will then be made. A growth in use notice requires Basin states to make good by reducing water allocations in the same WRP area and in the same form of water take.60
2.39
For the purposes of determining compliance with SDLs, the Basin Plan allows the combined limits for certain SDL resource units to be treated as a single SDL resource unit.61 However, the Royal Commission argued that this 'ignores the very premises for each water resource area having its own SDL, namely for the achievement of specific environmental outcomes'.62
2.40
For surface water and groundwater SDL resource units up to 30 June 2028, if Basin states identify that the cumulative balance of the difference between actual take and permitted take exceeds the SDLs in the amount of 15 per cent or more the state must investigate the cause for the relevant SDL resource unit.63
2.41
The MDBA has a suite of tools available to it to improve and ensure SDL compliance. The MDBA can undertake stakeholder education and engagement, capacity building, public reporting, independent monitoring of water take, and auditing of permitted and actual take in high-risk areas. It can also set guidelines on measurement of water take, provide technical and policy advice, and compel information. In terms of enforcement options, the MDBA can choose to enter into an enforceable undertaking with the Basin state to make good or it can apply to a court for: 1) a declaration that a state has breached its SDL, 2) an injunction against a Basin state to prevent current or future non-compliant behaviour, or 3) an order for the Basin state to make good.64

Monitoring and enforcing WRPs

2.42
Under the Basin Plan, Basin states are required to set out in their WRPs how monitoring will be undertaken to fulfil all reporting obligations. They are also required to self-report annually on compliance with any ongoing obligations in their WRPs to the MDBA. Basin states and the MDBA are required to report on the efficiency and effectiveness of WRPs every five years.65
2.43
WRPs impose obligations on Basin states, water users, infrastructure operators, environmental water holders and others. Where obligations are imposed under state law, states are expected to conduct monitoring and compliance activities; where there is non-compliance, states are responsible for taking appropriate action. If there is non-compliance with obligations imposed under Commonwealth law, the MDBA is responsible for taking appropriate action.66
2.44
WRPs will be implemented through each state's existing water management arrangements. As previously noted, there are jurisdictional differences in water management arrangements, the organisations involved, and their responsibilities.
2.45
The MDBA's compliance role is to monitor and enforce compliance of all regulated entities with accredited WRPs. As is the case in relation to SDLs, the MDBA works in various ways to improve compliance with WRPs, and has several enforcement options available to it, including: 1) to enter into enforceable undertakings with the regulated entity to make good, 2) apply to a court for a declaration that the entity has not complied with its WRP, or 3) apply to a court for an injunction to prevent current or potential non-compliance.67
2.46
As WRPs differ between areas, the MDBA intends to establish an approach for monitoring and compliance on a plan-by-plan basis in consultation with each state as WRPs come into effect.68 It also intends to take a risk-based approach to monitoring and compliance, meaning that it will focus resources on verifying that obligations with the most significant implications or risks to Basin Plan outcomes.69 The MDBA establishes what represents high-risk or significant implications for Plan outcomes via annual compliance priorities.70 The MDBA intends to regularly audit WRPs and audit outcomes will be published on the MDBA website and actions will be taken to address any non-compliance.71 The MDBA also publishes an annual report card that provides an assessment of Basin Plan implementation and challenges for the next 12 months. The report cards indicate whether WRPs are at risk of delay, require substantial work, or are on track.72
2.47
The Productivity Commission raised concerns that the ongoing reporting obligations of Basin states lack a clear focus as there is currently limited information about what Basin states need to self-report on annually to demonstrate WRP compliance. It also argued that there is uncertainty about how WRPs will be implemented alongside state water management arrangements and a lack of detailed information on how the reporting and compliance regime will actually operate once WRPs are accredited.73
2.48
The Joint Basin Governments response to the Productivity Commission advised that the MDBA is developing a WRP compliance framework which will include details of the annual self-reporting process as well as guidance on the rolling annual audit program and spot audits.74

Water recovery

2.49
At the time of the Basin Plan's development it was established that some surface water and groundwater entitlements needed to be recovered from consumptive use and retained in the system to improve the health of the rivers, wetlands, and groundwater systems across the Basin. This is known as the 'water recovery target' and is a long-term average. Figures were determined by defining the difference between the overall 2009 baseline diversion limit (BDL) and the new SDL.75
2.50
In 2012, the overall surface water recovery target for the Basin was set at 2750 GL/y and was supposed to be recovered by July 2019 in order to give effect to the SDLs. A groundwater recovery target of 40.4 GL/y was also set for two Queensland groundwater resources.76 However, following the Northern Basin Review and as part of the SDLAM, the Basin-wide surface water recovery target was reduced to 2075 GL/y in mid-to-late 2018.77
2.51
The Basin Plan sets out local water recovery targets for each catchment along with shared water recovery targets at the state and territory level. The shared recovery target is the volume of water that is required in addition to the local recovery target in each catchment. The local targets must be met by recovering water in a particular SDL resource unit while shared targets can be met by recovering water from any SDL resource unit in a connected zone. Basin state and territory governments determine what catchments the shared recovery target will be recovered from.78
2.52
There are over 150 different types of water entitlement within the Basin (water entitlements and allocations are discussed at paragraphs 4.4 to 4.6).79 Cap factors are an accounting tool enabling different types of entitlement to be consistently compared with one another, to track the volumes of water that have been recovered from each of the SDL resource units. The factors are used to determine the amount of water recovery against the water recovery target in each SDL resource unit.80
2.53
The MDBA and the NSW Government updated the planning assumptions and calculation methods used for NSW factors. The new methods incorporate the most recent information including how much water has been recovered for the environment, historical water patterns, climatic data and trade information. Updated factors were used by the MDBA for water recovery estimates on 13 February 2019. Draft cap factors are expected to be finalised when WRPs are accredited by the Minister.81

Northern Basin Toolkit Measures

2.54
The Northern Basin Review (undertaken by the MDBA) proposed that the water recovery target could be reduced by 70 GL/y on the basis that northern Basin Governments agree to implement a number of ‘Toolkit measures’ designed to improve water management. The toolkit includes strategic acquisition of remaining water recovery, protecting environmental flows, investigating options to support event-based environmental water delivery, improving the management and coordination of environmental water, and environmental works and measures to promote fish movement and habitat, including fishway construction and cold water pollution control.82 As part of the toolkit, the Federal Government committed $180 million over six years to assist the NSW and Queensland Governments to implement a range of environmental works to protect environmental flows.83
2.55
In terms of responsibilities, the states and the Australian government are responsible for developing toolkit measures. The states, MDBA, and Department of Agriculture will work together to implement the toolkit; the MDBA will provide advice on all measures and coordinate a framework for the prioritisation of toolkit measures developed by the states; and the Australian Government will provide funding for both toolkit and commitment package measures.84 The Northern Basin Commissioner (now interim Inspector-General) is responsible for overseeing progress and reporting annually on the projects.85
2.56
The Productivity Commission found that key milestones for implementation, funding arrangements, and program governance are still to be settled by Basin governments. It was concerned that this could result in timeframe blowouts and impact achievement of environmental outcomes.86 The Joint Basin Governments response to the Commission advised that Northern Basin governments are still working to finalise a schedule that will establish roles, responsibilities, and governance arrangements for the prioritisation and implementation of toolkit measures. A Northern Basin Project Group representing northern Basin states, the Department of Agriculture, the MDBA, and the CEWO has been established and is responsible for monitoring progress in the implementation of toolkit measures and reporting progress to the Basin Officials Committee and Ministerial Council.87

Murray–Darling Basin Water Infrastructure program

2.57
In addition to the 2,075 GL/y water recovery target, the Australian Government committed to recover an additional 450 GL through the efficiency measures program (as part of the SDLAM) by 2024. The Murray–Darling Basin Water Infrastructure program offers funding for water efficiency infrastructure projects in return for voluntary participants transferring an agreed volume of water savings via eligible water rights. Maximum funding for each project will be calculated at 1.75 times the market price of the water rights transferred to the Commonwealth.88
2.58
Following agreement at the December 2018 Ministerial Council meeting, efficiency measure projects must now pass tighter tests of how they will affect Basin communities, and an Efficiency Measures Work Plan sets out the strategy for achieving the 450 GL of efficiency measures by 2024. The Efficiency Measures Stakeholder Engagement Strategy allows proposals to be developed in consultation with communities. The Australian Government will publish updated guidelines and information on the efficiency measures program, including information on successful projects, agreed funding, water savings, and prices. It will also publish yearly reports on progress against program objectives and monitoring and evaluation of program and socio-economic outcomes.89
2.59
$1.4 billion has been committed to fund the recovery of 450 GL of water through efficiency projects.90 However, Mr Tony Webster, Managing Director of Policy Partners, and formerly Chief Economist, MDBA, raised concerns in a recent Policy Forum article that:
the infrastructure programs costs at least two and half times as much as the cost of buybacks;
the Australian Government does not disclose the extent of the overall improvement in water efficiency;
there is no way of confidently knowing the actual net water savings returned to the environment; and
by comparison, every dollar spent on health, education and basic services in Basin communities could potentially produce three to four times the jobs that would flow from a dollar spent on irrigation infrastructure.91
2.60
Some parties have argued that infrastructure investments in water use efficiency are not an effective way to obtain water for the environment or sustain irrigation communities, and could create inequities in water markets.92
2.61
The South Australian Murray-Darling Basin Royal Commission was also critical of recovering water through irrigation efficiency upgrades for being more expensive than buybacks. Commissioner Walker also found that, 'the efficiency measures schemes to date have involved a lack of disclosure on matters of key importance — who has received funding, how much, for what, to reduce how much water use, and to recover how much water to the Commonwealth?'.93 The Commissioner was doubtful that much of the 450 GL of upwater would ever actually be recovered for the environment through efficiency measures and recommended that future water recovery, including the 450 GL of upwater, should largely, if not entirely, be through buybacks.94 Further, it was recommended that the environmentally sustainable level of take be re-determined, and the Basin Plan provisions relating to the Basin-wide and resource unit SDLs amended, such that the additional 450 GL becomes redundant.95

Monitoring progress of water recovery

2.62
Under the Basin Plan, the Department of Agriculture is responsible for water recovery across the Basin and, with the Murray–Darling Basin Authority, is responsible for reporting progress on water recovery.96
2.63
All 33 WRPs need to be accredited before a final assessment of water recovery can be undertaken by the MDBA. According to the MDBA, this is because accounting for water recovery is complex and requires consideration of storage sizes, historical climate patterns, new rules, crop information, and expected usage patterns all of which are included in each WRP. Once this information is available, a final calculation can be determined to understand how much water has been recovered.97
2.64
According to the Joint Basin Governments response to the Productivity Commission's 2018 review, the Australian Government will undertake ongoing monitoring and evaluation of water recovery projects and the efficiency measures program, including evaluation of socio-economic outcomes through the Monitoring, Evaluation, Reporting and Improvement Framework. The framework includes methods for assessing aggregate or cumulative socio-economic impacts of approved projects to identify regions that are most impacted by the efficiency measures program.98

The new Inspector-General role

2.65
The Commonwealth announced its intention to appoint an Inspector-General for the Murray–Darling Basin in early 2020 pending the passing of legislation through Parliament.99 It is anticipated that the Inspector-General will be responsible for holding the MDBA, the Department of Agriculture, and the Basin states to account by providing independent oversight and assessment of the performance and effectiveness of the Australian, state, and territory based agencies. The appointment expands on the role of the Northern Basin Commissioner in both geographic and functional terms, and from 1 October 2019, the Northern Basin Commissioner role was subsumed by the Interim Inspector–General role.100
2.66
The Interim Inspector-General will monitor Basin Plan implementation, compliance with obligations in the Water Act and WRPs, progress of water recovery, delivery of water efficiency, supply, and constraints projects, completion and submission of WRPs, and report directly to the Minister for Water Resources on a needs basis, and to the Ministerial Council every six months.101 The terms of reference for the role were drawn up in consultation with the current Interim Inspector-General, Mr Mick Keelty AO, and seek to avoid duplication with the work of other agencies (such as corruption commissions) as well as provide power to compel witnesses and information (a deficiency of the Northern Basin Commissioner role).102 The Inspector-General is expected to be able to refer issues to the Commonwealth Integrity Commission once it is established.103
2.67
At the committee's public hearing on 18 October 2019, Mr Keelty argued that the volume and complexity of compliance across the Basin is counterintuitive:
If I were to show you the legislation and policy that applies to the Murray-Darling Basin, just the Northern Basin alone, it would fill two lever arch files…if you have policies that are so complex and if you have a national asset such as the Murray-Darling Basin divided up on jurisdictional lines and if you break those jurisdictional lines into departments, subdepartments, sublegislation and subpolicies, it is counterintuitive to having good compliance…it's just impossible to get the right answer, so how are we going to get good compliance?...Every time we create an agency, it seems like the agency needs to develop its own website. Every time they develop their own website, they develop their own option. People could forum shop. They may be trying to do the right thing, but, honestly, why would you bother, when we have created such a bureaucratic process for them to go through?104

Adequacy of information

2.68
Professors Quentin Grafton and John Williams (Australian National University), raised concerns in a recent Conversation article that there is no way to tell with confidence exactly how much water is available across the Basin at any one time due to deficiencies in water accounting systems and water tracking technology. Among other things, it was argued that this will impact the ability of the Inspector-General to effectively carry out independent oversight and monitoring.105
2.69
The MDBA was unable to reassure the committee when questioned about the level of certainty regarding the volume and location of water in the Basin. Mr Phillip Glyde, Chief Executive, MDBA, advised that there are deficiencies in the reliability, scope, and accessibility of information:
I would say we don't have complete certainty. I don't think you would have complete certainty in any natural system. What I think we have is a very good knowledge of certain forms of take—so, pumped directly out of a river or irrigation district. We have less certainty about other forms of take, such as harvesting overland flows. The issue, I think, is that there's certainty in the different jurisdictions. They look after the bits that they are aware of—all the different water entitlements, who owns what, where it goes and what have you. They would have certainty about that. We have certainty about our measurements in relation to streamflow inflows into dams and things like that, but I think what the community has been saying, particularly recently, is that you can't go somewhere and see all of that in one place. You've got to go to multiple websites and agencies to be able to put the whole picture together. There are two things in your question: one is the absolute level of knowledge, and the second is the availability and awareness of that knowledge in the broader community.106
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The MDBA noted that, while Basin states have an understanding of water at individual property levels, the information is only collated on an annual basis and it is usually retrospective.107 Further, although the Bureau of Meteorology (BoM) has responsibility under the Water Act for comprehensively understanding the water resource and it has powers to request information from Basin states on a regular basis, the information 'comes in different shapes and sizes and from different parameters and conditions'.108
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The BoM has broader responsibility outside of the Basin to gather, manage, compile, and deliver Australia's water data, including information on: the availability of water (storage volumes and trends), its condition (suitability for different uses), and its use (agriculture, mining, domestic, and so on). Within the Basin, the BoM assists the MDBA and the CEWH in the execution of the Basin Plan by providing data and insight pertinent to the supply and demand for water, including: recent climate conditions; temperature and rainfall trends; climate drivers and related forecasts; seasonal climate outlooks; specific data relating to heatwaves, fire danger, soil moisture and significant events like cyclones; water storage levels; and finally, water allocation and entitlement trade.109
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The BoM provides publicly available information on the overall volume of water in the Basin, and its cities and systems, through the BoM Water Storage App. The BoM also provides tailored information to users on request and additional information is provided to registered users of BoM's data. While the BoM produces a range of information about the water resource with a reasonable level of certainty, public awareness and uptake of BoM's Water Storage App, on-request service, registered user service, and other Basin data may not be as widespread as it could be. The committee welcomes any evidence on the availability and accessibility of such information, and recommendations on how that availability and accessibility might be improved, if it in fact needs to be.
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The BoM receives its data from originating agencies which collect and quality check the information for their own business purposes. The Water Regulations 2008 specify what data needs to be provided and by which parties and when. The BoM then carries out its own additional checks and quality controls on the information for its purposes; however, as the BoM explained to the committee, responsibility for the accuracy of data lies with the originating agency.110 While the BoM does not have powers to compel agencies to collect particular data or specify the level of quality, it undertook cooperative work with Basin states and data-supplying agencies to specify the standard for the exchange of data which has been embedded into the data management systems of the organisations.111 The BoM also supports a reference group that meets every six months to consider key questions such as data quality.
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When questioned by the committee on whether there are areas where information flows may be lacking, the BoM advised that there were none, other than the difficulties with estimating overland flows.112
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The next chapter explores the roles and responsibilities of key parties in environmental water recovery and the processes used to plan, coordinate, deliver and evaluate environmental watering.


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