Impact of the Basin Plan on Rural Communities, Localism and Stakeholder
The social and economic implications of the Basin Plan formed a major
part of the evidence received during this inquiry. Also prominent was the
broader public debate about the future of the Murray-Darling Basin itself.
This chapter deals with the socio-economic impacts of the Basin Plan and
the related issue of the Murray-Darling Basin Authority's (MDBA) and the
Department of Sustainability, Environment, Water, Population and Communities'
(SEWPaC) engagement with rural communities and stakeholders. First, the chapter
discusses the impacts of the Basin Plan on rural communities. In particular, it
focusses on the following areas:
- external pressures affecting rural communities that are unrelated
to the Basin Plan including, the millennium drought, commodity prices and the
general economic climate;
- modelling of the future social and economic impacts of the Basin
Plan by the MDBA, the Australian Bureau of Agricultural and Resource Economics
and Sciences (ABARES), and independent groups; and
- community perceptions of the potential social and economic
impacts of the Basin Plan on communities reliant on irrigation in the Basin.
Second, the chapter discusses the issues of localism and stakeholder
engagement in the development of the Basin Plan. It examines how the concept of
localism has been developed and used by the MDBA since the release of the House
of Representatives Standing Committee on Regional Australia's May 2011 report
entitled, Of drought and flooding rains: Inquiry into the impact of the
Guide to the Murray-Darling Basin Plan (Windsor Report). It also examines
the process and criticisms of the MBDA and the government's approach to
stakeholder consultation in the Basin region.
Impact on Rural Communities
External pressures unrelated to the
The socio-economic pressures faced by regional and rural communities
from severe drought, fluctuating commodity prices and the post-GFC economic
climate were made apparent when the committee held public hearings in Hay and
Mildura in early April 2012.
The General Manager of Hay Shire Council outlined the impact that the
Basin-wide 2750 GL/y reduction could have on Hay in addition to the
difficulties caused by the millennium drought:
That will decimate the lifeblood of this area. From Hay
Shire's point of view, it is a very resilient community but it has had a pretty
hard time with 12 years of extreme drought, and to lose this amount of
irrigated agriculture from the area is a terrible blow to the economy of the
Two local Hay witnesses also explained how the drought and other factors
had a strong impact on the Hay local economy resulting in skills shortages, but
that the Basin Plan process was creating additional uncertainty for the region:
Mr Hill: ... it is hard to find that semi-skilled
employee for general driving of tractors. It is all high-tech equipment. It is
all GPS. It is hard to find people that are reliable et cetera. So many people
have left for the mining industry. Families have left the area because of the
uncertainty moving forward. We have had the drought, which created a lot of
uncertainty, obviously. Because local farms have sold water, locals have seen
it happen. Families are thinking: 'Well, my kids are about to go to high
school. I think we might move now and just not take that chance.' Even local
shops find it hard to find people. It is an ongoing problem.
Senator URQUHART: So it is across the broad spectrum
of all different industries?
Mr Hill: True. We cannot all blame the [Basin Plan],
either, for people leaving town. It is a country town. Kids often do leave.
They go to uni et cetera. Once they are at uni they possibly do not always
come back. But the plan has created uncertainty.
Mr Schipp: The other thing is that production has
ramped down because of drought and zero [water] allocation, and to suddenly
ramp it back up one season later or two seasons later is another compounding
factor. It clouds this whole issue. The [Basin Plan], probably, has some
impact. But there is also the drought compounding the story as well.
Mr Bennett from the Sunraysia Irrigators Council, also noted the effect
of poor commodity prices followed by the drought on irrigated horticulture in
The recent history of Mildura is that, mainly due to commodity
prices before the drought, some people were starting to get out of irrigated
horticulture. That was rapidly advanced during the drought, and I think the
district is now pumping only half the amount of water it was pumping prior to
the drought. As [Mr Daniel Lee, Chairman, Sunraysia Irrigators Council] said,
even though there had been irrigation efficiency up until that time, it
accelerated through the drought and most people have got some form of
pressurised irrigation on their properties. We hope that that drying off in the
pumped irrigation districts has bottomed out and from now on, depending mainly
on commodity prices—and the Australian dollar, which is sort of connected—we
are hoping to see in the next few years not necessarily a resurgence but some
form of getting back to where we were prior to the drought.
The MDBA also outlined a number of the impacts of the millennium drought
on the agricultural sector in the region in its report on the socio-economic
impacts of the Basin Plan:
The severe and prolonged millennium drought has resulted in
many farmers in the Basin being under significant financial stress.
- Many farmers survived the drought on a combination of exceptional
circumstances payments and off-farm income, and by running down farm equity.
- Some irrigators sold permanent water entitlements to keep debt levels
down, and bought annual water allocations to continue irrigated farming.
- The average gross margin return on farm assets over five years to 2010
for horticulture, broadacre, livestock, dairy, and mixed farms was in the range
of 2 to 3 per cent. When debt and interest costs are included, the average
annual return on assets during that period was negative for the majority of
- Since 1996, levels of farm average cash income have fallen
significantly, and levels of average farm debt have increased substantially in
most areas of the Basin.
In noting the future economic outlook of the Murray-Darling Basin, the MDBA
stated that the general economic climate will have the most significant effect:
In the longer-term, the greatest influence on social and
economic outcomes in the Basin will be conditions in the wider economy. The
main drivers will include long-term changes in commodity prices, driven largely
by growth in emerging Asian economies, exchange rates and anticipated
continuing growth in Australia’s GDP and productivity.
The committee is mindful that many of the pressures facing communities
and irrigators in the Murray-Darling Basin are not caused by the Basin Plan.
The committee also considers it important that the public debate about the
future of the Murray-Darling Basin clearly delineates the likely impacts of the
Basin Plan from these other external factors.
However, the committee is also mindful that the Basin Plan may have effects
that tend to exacerbate the existing social and economic challenges in the
Basin. The committee considers that it is very important that the Basin Plan
takes into account existing socio-economic issues in the Basin.
Social and economic modelling
The potential social and economic impacts of the Basin Plan formed a
major part of the inquiry's evidence. The MDBA and other groups undertook
various studies to model these impacts. While acknowledging that there would be
social and economic costs, the MDBA also presented modelling that the costs
would be limited.
The broad, Basin-wide findings of the MDBA can be summarised as
- The reduction in irrigated agricultural output as a result of the
Basin Plan is expected to be 5–10 per cent from 2007 to 2019 (less than
1 per cent per annum).
- That overall agricultural output is expected to grow by more than
this reduction in irrigated agricultural output until 2019 – meaning net growth
for the region despite the Basin Plan.
- Government investment in infrastructure and water management is
expected to create 2 000 to 3 000 more jobs to 2019.
- Without the Basin Plan the region (excluding the ACT) is expected
to have a general increase in fulltime jobs of 13 000 per annum by 2019.
- Under the Basin Plan (without buybacks re-invested), there is
expected to be a total reduction of 1 600 jobs by 2019, equating to a reduction
in the annual increase of approximately 200 jobs.
These broad outcomes were part of MDBA's socio-economic analysis that
assessed the impact of the Basin Plan at four levels: national, regional, industry
and local. The MDBA described how it developed this analysis:
Firstly, regional socio-economic profiles were collated.
Economic models were used to assess likely impacts on agricultural production
and communities at Basin‑wide, regional and industry levels. Socio-economic
impact assessment was used to complement this analysis and describe in more detail
the potential impacts at the industry and local level.
The MDBA stated that it undertook the economic and hydrological
modelling on only the 2800 GL/y figure and noted that many of the 'benefits and
costs are not of sufficiently high precision to be able to discern a significant
difference' between 2750 GL/y the 2800 GL/y scenarios. Although socio-economic
impacts of other reduction in take scenarios were modelled for socio-economic
effects, less detail of the results were made available in public reports. As
noted in the MDBA's report Socioeconomic analysis and the draft Basin Plan:
Part A – Overview and analysis: '[e]conomic modelling studies have
considered a range of scenarios with a focus on a 2800 GL water recovery
volume, and sensitivity analyses of 2400 GL and 3200 GL scenarios.'
A further criticism, by witnesses such as the Wentworth Group, was that
the socio-economic modelling did not adequately explain the impacts, costs and
benefits that would occur under several different scenarios for returning
environmentally sustainable levels of take.
The analysis across the four levels showed that while the impact of the
Basin Plan when spread across the entire Murray-Darling Basin is relatively low,
it is likely that disproportionate costs will be borne by specific Basin communities:
These costs are
likely to occur in areas that have small populations and high dependence on
irrigated agriculture, and communities which are more geographically isolated
relative to others across the Basin.
The MDBA also advised that various assumptions were tested, particularly
in relation to potential job losses. For example, as the following exchange
demonstrates, different modelling scenarios were developed to measure the
impacts of people either staying in the community or moving elsewhere following
Dr Dickson: We did three different studies on the employment
impacts and then did a review of all of those three. They do vary. We also
tested whether people move on or whether they stay in their jobs. Effectively,
there was not a lot of difference in the overall impact of whether people moved
on or stayed there. But we did analyse that. That is all reported in our social
and economic impact assessment...
Senator NASH: Which one are you using for the purposes of the
plan—that they move on or that they stay?
Dr Dickson: We are basically painting the three scenarios that you
could have—that they all move on, that a mixture will stay, which is probably
closer to the reality, or that they all stay—and then just looking at the
relative impacts. You cannot be precise about these things in identifying the
Senator NASH: No, I understand that. Obviously it is a very
imprecise situation we are dealing with. If you are using all three but you
have come to an understanding of what you think the impact is going to be on
job losses, if you have three different scenarios, how can you be so certain
about the job losses?
Dr Dickson: We have not said we are absolutely certain about job
losses. What we have identified is the order of impact... I think the worst
case was around 1,600 overall over the long term, and the best case was
something around 800. It all depends on the modelling that you use.
Elsewhere, the MDBA also stated that the potential costs for economies
and communities are 'manageable if there is a smooth transition over time to a
sustainable level of water use.'
ABARES also provided socio-economic modelling complementary to or as
input for the information published by the MDBA.
Where relevant, the results and criticisms of this modelling are also discussed
Concerns with the MDBA's modelling
Despite the studies put forward by the MDBA about the socio-economic
impacts of the Basin, a number of witnesses claimed that there was either
significant uncertainty regarding the socio-economic impacts or significant
problems with the MDBA's modelling.
Some stakeholders stated that the full impact on communities is not yet
completely known. Mr Jock Laurie, President of the National Farmers' Federation
summarised these concerns:
The variation of
seasonal allocations, variations of rainfall and all those things do have an
impact. So how do you get an understanding? They do know that, if you work on
averages, you can extract money out of a community—like Griffith, for
instance—and you should be able to put a dollar figure to it. We are not
convinced, at this stage, that they [the MDBA] have enough knowledge about the
actual impact. I do not believe that they understand exactly what the impact on
each of those individual communities will be. So whenever you are taking water
out of productive use you will be removing income. What we are saying is that
we need to get all of those things together: the infrastructure spend, the
environmental works and measures, the [research and development] component,
maintaining economic capacity and other things.
Assumptions behind the
Given the broad nature of the assessments made by the MDBA, there is a
sense of uncertainty regarding the extent of the negative socio-economic impact
on the Basin as a whole and how individual communities would be affected. As
such, some organisations commissioned their own assessments to gain an
understanding the impacts to local areas. One report, by Independent Economics,
presented quite different findings at the local level compared to the MDBA's overall
The Independent study
found that a 29 per cent reduction in productive water use in the South West
Murrumbidgee (Griffith, Leeton, Narrandera, Carrathool and Murrumbidgee local
government areas) is likely to permanently reduce employment by 2100 jobs, comprising
700 jobs from farming and processing businesses and 1400 jobs from urban based
service industries. The study also estimates GDP in this region will reduce by
about 9 per cent and income by about $200 million.
Given the significantly different findings, the committee explored some
of the Independent Economics report's finding with ABARES officials at a
committee hearing. When questioned about the impact on smaller communities as
reflected in the Independent Economics research, which indicated that people
will leave smaller communities and the social and economic impact would be
quite negative, Mr Morris, Executive Director, ABARES explained their
different modelling approach:
Mr Morris: In our water modelling—so this is agricultural
areas—we look at about between 22 and 24 different regions. In our general
equilibrium modelling, which is more of the basin wide, it is a slightly
smaller set of regions; I think it is about seven regions. The smaller you can
get those regions—obviously, to some degree the more information would be
available to you and others in terms of decision makers—unfortunately, the less
reliable the data and information is at that regional level, so it becomes very
difficult to depend on the reliability of information. We map it on areas that
we believe we have reliable data and information on which to make decisions on.
So that is why we use the seven regions across the basin for this type of
Senator NASH: Are you saying that the Independent Economics analysis
is not reliable?
Mr Morris: We value inputs from all sources. The work done by
Independent Economics is very different from all of the other economic work
that has been done on the basin. If I were asking them questions, I would ask
them why their results are so different—and I do not think it is because of the
assumptions that they have said that they have changed because we have modified
ABARES also explained that the different models took different
approaches and the variance in results could be a result of the size of areas
assessed. As Mr Morris told the committee:
There are a number of
reasons why that might be the case, and I do not fully understand their model.
It has some quite unusual results that we do not quite understand. The smaller
the region, potentially the higher the likelihood of people moving out of the
region. They have defined quite a small region—it is the south-west
Murrumbidgee—whereas our regions are a bit bigger than that. We looked at the
Riverina, which would be our comparable region for our regional impact
modelling, and so part of the reason is that they have got a smaller region.
The MDBA also stated in its report that the main reason for different
results regarding the socio-economic impacts is that different assumptions have
been used for different modelling. The MDBA explained there would be larger
impacts with the following assumptions:
100 per cent of water required to
meet SDLs is recovered by
buy-back (when in fact, a considerable portion is being recovered through
all water recovery is yet to occur
(when in fact, the target has been half achieved already);
water continues to be used in
fixed proportions with other inputs (with no substitution between water, land,
labour, capital, materials and services);
there is no trading of water
between industries or between the water resource planning regions (which might
include farmers in one area selling temporary water allocations to farmers in
the same area or other areas as a source of income in low allocation years);
when farmers sell their water
entitlements to the government, they sell all of their entitlements and exit
the industry altogether; and
proportional impact on irrigated agriculture flows through to an equivalent
proportional effect on the size of the Basin economy and employment.
Limited consideration of
In the hydrological modelling of various SDLs, there was limited
consideration of connectivity between the groundwater and surface resources in
the Basin (see chapters three and eight). This had implications for how the socio-economic
modelling of the Basin Plan was undertaken. ABARES explained how this
connectivity was represented in its socio-economic modelling:
Mr Morris: In terms of groundwater versus surface
water, clearly, if there is more groundwater available or there are changes in
the relationship between the amount of groundwater and the amount of surface
water, that will affect the overall water available to the basin and that could
have quite a significant impact on the results. But we have built into our
scenarios the scenarios given to us on the basis of availability of surface water
and groundwater from the Murray-Darling Basin Authority.
CHAIR: Have you included in that the connectivity? The
more groundwater you take in some places, the less river water there is.
Mr Morris: It is not a detailed scientific model, but
there is some representation of differences between surface water and
groundwater in the modelling.
However further questioning by the committee of an ABARES official
suggested there remained a limited understanding about the connectivity between
surface water and ground water by those involved in different aspects of the
Mr Sanders: ...You have to remember that our models of regions are
at a sort of aggregate scale. While we have some hydrological component, we do
not necessarily model the relationships between surface water and groundwater,
but we treat—
CHAIR: Do you understand the connectivity of the Murrumbidgee
and the aquifer?
Mr Sanders: No, I do not understand it. The—
CHAIR: How the hell can you model if you do not understand
The committee is of the view that, given the MDBA has indicated it has
attempted to strike an appropriate balance between environmental, social and
economic outcomes, it is reasonable to expect that more detailed analysis would
be undertaken in relation to the impacts of the Basin Plan at a local community
level across the Basin.
Independent modelling undertaken by others, which found significant
social and economic impacts compared to the MDBA's own assessments, generates
valid concern within the communities about the Basin Plan, particularly in the absence
of thorough data to refute these claims. The MDBA's response that it 'does not
agree with the assumptions' made by other research is not acceptable where the
assumptions made by the MDBA are not clear to the public.
The committee is concerned by ABARES apparent lack of understanding
about the surface and groundwater connectivity in undertaking its
socio-economic modelling of the Basin Plan.
The committee believes, consistent with the recommendation below, that
the assumptions that underpin the socio-economic modelling need to be more clearly
explained to the public. Although the committee is aware that modelling of
socio-economic impacts of other reduction in take scenarios was undertaken, the
committee is concerned that the level of detail made publicly available was
limited especially in comparison to the 2750 GL/y scenario.
Perspective of rural communities
The committee heard evidence from a number of regional Basin community
groups, councils, and industry representatives that also diverged from results
of the MDBA and ABARES' socio-economic modelling. These perspectives were put
to the committee, most forcefully during its visit to the rural communities of
Hay, NSW and Mildura, Victoria.
Mr Crighton, a local engineer from Hay, summarised the position of rural
Water is going to go; we understand that. We all want the
river to be managed; we all want it to be maintained. We understand that a
volume of water has to go but the communities that are there are going to be
the people who are truly going to suffer from that change and they are the
people who most need assistance. These regional towns need any assistance they
can get to broaden their sector, to get out and grab other work and other
income and to start working with other industries, such as our predominant
industry which is dryland farming. The transition is not easy.
Concerns were strongly evident in other Basin communities as well. For
example, Mayor Margaret Thomson of Wentworth Shire outlined the Basin Plan's
impact on the Wentworth community given its reliance on irrigated farming:
We do have very grave concerns about the effect on our
communities in the future and how we can remain a prosperous community. The
shire is an agricultural economy that is almost entirely dependent on
production from irrigated horticulture. Up to 80 per cent of the gross value of
our agricultural production is generated by only 0.5 per cent of the landmass
of the Wentworth shire.
The Mildura Rural City Council Mayor, Councillor John Arnold, also
pointed to the flow-on effects of the Basin Plan and the associated water
...it will take out of those areas massive production, and it
is going to make it very difficult for the councils to continue with a rate
level as it is currently, because as the land values in those areas decrease
other people are going to pay more. Mildura is also a member of Regional Cities
Victoria, and both the previous Labor government and the current coalition
government in Victoria have a policy of people moving to the regional cities.
You cannot do that with a lower rate base unless there is some significant
capital put in to ensure that they are able to survive.
The local impacts were also highlighted by Mrs Tania Chapman of Citrus
Australia. Mrs Chapman argued that the appropriate balance between the
environmental, social, and economic impacts were not reached under the Basin
Plan (November 2011):
A recent report released last month on the socioeconomic
impacts of the proposed plan by Regional Development Victoria is another
example of the impact it will have in our communities. Even the best-case
scenario, minimum buybacks, points to an increase in abandoned blocks in Red
Cliffs, Merbein and Mildura. How will all the extra environmental water be
managed? We are yet to see best practice water management by governments during
extreme weather events. The draft Murray Darling Basin Plan continues to fail
to deliver the balanced social, economic and environmental outcomes that we do
The committee was concerned throughout this inquiry that the various
iterations of the Basin Plan did not fully address the socio-economic impacts
that the return of 2750 GL/y would have on Basin communities.
Although the committee acknowledges the progress made by the MBDA in
addressing socio-economic impacts during the development of the Basin Plan, some
of the original concerns remain. Although the committee is aware of the
research conducted and commissioned by the MDBA about local
socio-economic impacts of the Basin Plan,
the evidence received by the committee shows that rural communities face a degree
of uncertainty about their social and economic future.
The committee recommends that the MDBA update the socio‑economic
modelling of the local impacts of the Basin Plan. There should be a strong
focus on the communities likely to be most affected by the Basin Plan and
strategies should be developed to address the impacts. All such information
should be publicly released and presented in a form that is accessible to
stakeholders, local community members, and parliamentarians. This modelling
should also include tabular or graphical data depicting the location and
volumes of buyback on an irrigation district basis.
Stakeholder engagement and localism
The issue of stakeholder engagement was a significant concern among many
of the witnesses who appeared before the committee. While developing the Basin
Plan, the MDBA undertook a significant process of consultation with interested
parties. The Basin Plan Explanatory Statement (explanatory statement) outlined the
MDBA's consultation as follows:
During the 20 weeks of formal consultation, the Authority
held a total of
24 public meetings, 56 round table and technical meetings, 18 social and
economic briefings for representatives from rural financial organisations,
5 regional briefings on water trading issues, and 31 bilateral and working
group meetings with Basin States. Further, a tailored Indigenous consultation
process took place in more than 30 towns in the Basin.
The explanatory statement also noted that:
By the end of the formal consultation period on 16 April
2012, the Authority had received nearly 12,000 submissions from individuals,
organisations and governments across Australia, as well as some from overseas.
As a result of this further feedback, more than 300 changes were made to the
proposed Basin Plan.
Under the Water Act 2007 the MDBA is required to 'consider' any
submissions received as part of the formal consultation period.
Despite the extensive public consultations that took place, a number of
stakeholders expressed significant concerns about flaws they saw in the MDBA
consultation process and its effectiveness in helping stakeholders understand
the Basin Plan. For example, the Mayor of Mildura Rural City Council stated
that although there were significant meetings with the government over the
plan, information on certain issues could be hard to obtain:
You may be aware that we have consulted closely in Canberra,
Leeton and a number of other places with the Murray-Darling Basin Authority.
Like Mark McKenzie [Chief Executive, Murray Valley Winegrowers Inc], who we
were at the meeting in Canberra with, we discussed the technical details about
how they came up with decisions about use of environmental water, flows and
what they were going to be able to do with regard to that. There
are certainly some genuine concerns with regard to the information which has
been made available. Often when questions are asked there has not been a
A witness from the Riverland Winegrape Growers Association was also critical
of the general approach to stakeholder engagement taken by the government and
Mr Byrne: We have also witnessed a lot of what I can
only call prevarication on the part of those who have been charged with
responsibility for engagement with us as stakeholders and those who have been
charged with responsibility for further developing the draft into a final plan.
I can only imagine that the intransigence and the prevarication, which I would
define as 'acting or speaking evasively or misleadingly', is going to continue
because there have been no signs in recent times that we are suddenly going to
have a more open, cohesive and interactive opportunity with those who have
primary responsibility for developing this plan.
Senator NASH: ... for clarification, when you are
talking about the people you are engaged with and the few responses and the
prevarication, are you talking about the Murray-Darling Basin Authority
Mr Byrne: I am talking about the politicians with
whom we have had engagement. I am talking about the bureaucrats who work for
those politicians and I am talking about some of those within the authority;
though I would have to say that our engagement with the higher level in the
authority has generally been met with some satisfaction but not a lot of
Despite the extensive meetings held by the MDBA in the formal
consultation process in the first half of 2012, the National Irrigators'
Council (NIC) criticised the MDBA for providing little information afterwards.
As the NIC told the committee, the MDBA's efforts in early 2012 were followed
by an absence of information in the time leading up to the tabling of the Basin
Plan in parliament:
On the issue of consultation: we got consulted to death. We
have had millions of reports and God knows what else handed down. But it has
suddenly gone silent. We have the Basin Plan out there and there have been a
lot of closed-door meetings going on for the last two or three months. But our
communities are crying out for information about what the plan means for them.
They have no idea. I know we are trying to get our heads around it and trying
to be the conduits, but—and I am going to verbal Andrew [Mr Andrew Gregson,
CEO, NSW Irrigators Council] again—both Andrew and I would say that we do not
have the resources to do that. Only governments have those resources. We would
implore you: after Christmas —now is not a good time; people are trying
to harvest and get summer crops in and those sorts of thing and communities are
busy—there has to be a very concerted effort to get out there and explain what
this is all about and what it means for people.
The Wentworth Group was also critical of the manner in which its
comments regarding the proposed Basin Plans were treated by the MDBA. In
particular, the Wentworth Group was concerned that one of its statements was
not engaged with constructively but placed on the MDBA's 'Mythbusting' website.
As Mr Stubbs explained:
We have said, 'You don't tell us the number [of the Basin
wide SDL]; you need to tell not just Wentworth but tell the public, tell every
stakeholder in the basin, and the parliament.' I know the environmental groups
have written to the authority specifically asking them to model volumes of
4,000. I cannot respond on exactly what response they got. We have not got any
specific response to our statements. Our statement got put on the myth-busting
section of the authority's website. In this public consultation process, a
statement that we have put out is put up as myth busting and ridiculed on their
site. We have not got a comprehensive response.
A number of environmental groups were also critical about the manner in
which public consultation meetings took place. In particular, these groups
stated that the very short notice of the time and location of meetings made it
difficult to properly present their views. As the committee was told by
representatives of the Conservation Council of South Australia, Nature Conservation
Council of New South Wales, Environment Victoria, respectively:
Senator HANSON-YOUNG: What type of consultation have
the three organisations had with the Murray-Darling Basin Authority in relation
to the draft plan?'
Mr Kelly: We have been invited to attend a number of
information sessions and had discussions with the authority over last year and
this year [2011 and 2012]. My feeling was that at many of those meetings there
were a number of questions continuously asked about modelling the 4,000
gigalitres, why certain things were done and when reports were going to be
released as such. It was always a little bit constrained in the answers that
were provided, so we have felt that there has not been a hugely strong amount
of listening to the concerns of the environmental movement. If there were, we
would have seen the 4,000 gigalitres and other values modelled already, and
then there would be better knowledge and information out in the community and
with policymakers to make an informed decision.
Ms Smiles: Just to answer that question as well, as
far as the information sessions that the MDBA has been running are concerned, I
think we were given 10 days notice of the last-minute decision to hold an
information session in Sydney, and the 10 days included Easter, so it was very
short notice for anyone that was interested in the issue in Sydney to be able
to organise themselves to get along to that information session. So we do not
feel that there has been enough notice to enable community access to the
sessions that have been run...
Ms Le Feuvre: For some of the community consultations
out in regional Victoria, they would ring up a couple of days before and say,
'Do you know of any environmental people we should invite?' That kind of notice
is really very short. In terms of the [NGO] consultation, we have had a number
of briefings with them. Finally, in Sydney, probably a couple of weeks ago, we
had the sort of conversation we wished we had had about a year before, while
the plan was still under development.
Other groups have been more equivocal about the MDBA's consultation and
stakeholder engagement process. For example, regarding the consultation with
indigenous Australians in the Basin, the Murray Lower Darling Rivers Indigenous
Nations told the committee about the draft Basin Plan that although significant
consultation had taken place and was encouraged, further work needed to be done:
I must say, Rhondda Dickson CEO of MDBA and Craig Knowles
[MDBA Chairman], have been very supportive in the development of our processes
within the basin planning itself. I do give them acknowledgement of that, but
in saying that, me and my confederated nation groups, see this as a bit of a
cop out. It is a very tokenistic measure, where the Commonwealth area actually
not taking the responsibilities on as they should be doing and handballing
everything across to the basin states and saying that it is their
responsibility to do that. We require a lot more clarity around that space. We
really do need the Commonwealth to start instigating processes through the
basin states where it is compulsory where they actually integrate, negotiate
and consult with the Indigenous nation groups. But the MDBA, I must say, have
been very supportive in a lot of spaces with Indigenous nations, but in saying
that there need to be a lot more work done in those areas too.
The Wentworth Group also raised concerns that some supporting
documentation relevant to the Basin Plan was not adequately available for
review for the formal consultation process. As Mr Stubbs explained:
Mr Stubbs: ... The authority has been releasing
material over the whole 20 weeks of the consultation. As I said before, this
volume here is one of four volumes that was released about two weeks before the
end of the consultation. They are making it very difficult for anyone to
Senator XENOPHON: For the benefit of Hansard, that is
about 300 pages?
Mr Stubbs: A whole range of small reports have been
brought together here, and there are apparently four more of those. I know that
there is groundwater information which was released after the end of the
consultation period. 
The committee acknowledges the effort undertaken by the MDBA to engage
with numerous community groups and stakeholders regarding the Basin Plan. The
committee also acknowledges the extent of the information that is now available
from the MDBA regarding the Basin Plan.
However, the committee also considers that there have been a number of significant
problems with the way that the MDBA has communicated with the public and
engaged with stakeholders. The committee is concerned that a number of
stakeholders expressed that their views were not appropriately considered or simply
Finally, the committee is of the view that information of greater
clarity should have been provided through the development of the Basin Plan and
it is particularly concerned that the information about the consequences of the
Basin Plan as introduced into Parliament has not been adequately explained to
relevant stakeholders and communities.
The committee recommends that the government develop a formal process
for long-term and integrated engagement with key stakeholders on the
implementation of the final Basin Plan.
The concept of localism as applied to the Basin Plan evolved out of the
Windsor report (the House of Representatives Standing Committee on Regional
Australia's report, Of drought and flooding rains: Inquiry into the impact
of the Guide to the Murray-Darling Basin Plan). The Windsor Report
emphasised this issue as a key concern with the release of the Guide in late
2010 and noted the need to use local knowledge and reflect local conditions in
the development and implementation of the Basin Plain:
It is essential that the final Basin Plan and any related
implementation plans (including state water sharing plans) reflect the local
conditions in each Basin valley. This includes reflecting the knowledge of the
local land and catchment managers in how to best manage environmental flows and
savings and recognising the work done to date by communities in developing
state water sharing plans.
Subsequently, the MDBA has taken steps to address the issue of community
level engagement through the concept of 'localism'. When asked by the committee
how 'localism' was defined and how it would operate in the context of the Basin
Plan, the MDBA responded:
...You do need to operate [localism] at a number of scales. The
whole purpose of having a basin wide plan is the connectedness of the system,
so we do need to plan for the connections, and people operate at local scales.
We believe that the localism concept can operate in pretty much all of the
aspects of the basin plan...
In water recovery, we have already been having some
discussions with some of the stakeholders in the northern basin, the Lower
Balonne working group, about different ways to do recovery and watering in that
region that would end up with a more efficient outcome. These are ideas at the
moment, but the process which we are wanting to work through is to set up
arrangements—as yet undefined, I agree—so that we can work very closely with
the communities involved there and with the Queensland department. Hopefully we
can work closely with the New South Wales government as well, if they become
party to it, to look at better ways of managing the system. That is in the
northern basin most particularly, because there is still a lot of unknowns up
there. That is a localism approach in looking at how you can work with people
on different ways of recovery.
We have also flagged in this document Delivering a Healthy
Working Basin the idea of setting up a community committee that would
advise us on some of the SDL adjustment proposals coming forward from either
local communities or the states, so that we can make sure we get the full local
perspective on those. Some of those may need to be parcelled up together with
each other to enable us to get a full sense of what some of those innovations
are going to deliver across the whole system, but we want to set up the
arrangements so that can happen...
The MDBA continued the explanation of localism by highlighting some
examples of how it was working in practice in terms of environmental watering.
As one MDBA official, Ms Jody Swirepik put it:
The model example at the moment is in Victoria, where they
are already work with the Murray-Darling Basin Authority on a hierarchy of
identifying at a very local level what they believe their environmental
watering priorities are. They do that at a [Catchment Management Authority
(CMA)] level. The CMA feeds their priorities into the Victoria Department of
Sustainability and Environment, who then looks at their own water portfolio in
Victoria, the Commonwealth's portfolio and the Living Murray's portfolio. The
CMA basically filters out all the requests to go to different water holders to
try and get a co-ordinated view of how they meet their state's watering
priorities. There is a process by which the CMA relies on local individuals
and their own expert staff to gather up priorities. It comes all the way
through to being discussed in the [MDBA] in terms of how we implement different
In our processes, which we run at the moment, pretty well,
and which we are obliged to run under the basin plan, there are avenues for
people to put in their own ideas directly to us. An example of that that has
occurred in the last two years was that the Murray Wetlands Working Group put
forward a proposal for watering in the Darling Anabranch during the floods
initiated in 2010. That was taken up and a combination of New South Wales
water, Living Murray water and Commonwealth environmental water-holding water
was used to divert water down into the anabranch. It provided the first
watering there. It was a small amount—47 gigalitres—but was quite significant
in breaking that dry period. And it was significant because of the combination
of water-holders who were co-ordinating to bring that event to fruition.
Overall, the MDBA described localism as a principle by which it would operate
in the future.
Criticisms of localism
The way that the MBDA had developed the principle of localism to better
implement the objectives of the Environmental Watering Plan (EWP) also came
under criticism in the committee's hearings. For example, as the NIC put it:
...We have certainly got some mixed messages from the
Murray-Darling Basin Authority around the localism issue. It certainly has been
promoted that localism would be a huge part of the answer in developing the
environmental watering [plan] from here on. Then we have had the chair of the
MDBA saying that localism may just further exacerbate the current problems that
we have in running a basin-wide system.
The NIC expanded on its views on localism. In particular, as Mr Chesson
explained, the NIC was concerned with how localism was being employed by the
MDBA, how it fitted with the other Government strategies for the Basin
including the Basin Plan and the tension between centralised and local decision
making in this regard:
There was a story floating around just after the plan
consultation finished up. It quoted the MDBA CEO Rhondda Dickson as saying if
you made a local decision in the Riverland at Berri, it would have an impact
somewhere else in the basin, so it is very hard to have localism when the
entire plan is about centralising the decision making back to a federal body. I
looked at it and thought, hang on, for the last four months we have been told
about localism and about the need for local communities to make decisions but
then in one hit they seem to be saying that localism could not work because we
need to make a federal overarching sort of decision for the whole river, not
just a parochial decision. So I was a little bit confused by this, but it is
one of those mixed messages that we do seem to get back sometimes.
Mr Chesson continued to articulate the 'mixed message' concerns:
...We think localism is really important because no-one
understands how the whole system works. A lot of people know the rhythm of the
river in their own patch but then they are quite ignorant of what happens
upstream of them or downstream of them. That is pretty obvious. So it is a
mixed message: on one hand 'we want to centralise everything' and on the other
hand 'we want localism'. We would love to know whether it is about CMAs or
natural management NRMs. Some people suggest it is about Regional Development
Australia. I do not know who would deliver on a local basis. It is a conundrum.
The tension between the centralised decision making and localism was
also expressed by Dr Paul Sinclair of the Australian Conservation Foundation:
...[The Murray-Darling Basin] is a system made up of bits that
create a whole. Like the saying about finding God in a grain of sand, the
smallest bit contributes to the wellbeing of the whole.
Our challenge has always been how we coordinate the Goulburn,
the Murrumbidgee or the Kiewa across those state boundaries...in a way that
manages it as an integrated system. Localism on its own will not work for the
system. It might work for bits of the local environment, but we have to find
ways of connecting the local to the regional and to the valley and to the
basin. That is the thing that is really hard but also really exciting. I think
one of the previous witnesses was involved with the Murray Wetlands Working
Group, and community institutions like that are a pivotal link between the
overarching basin vision and the actual delivery of water and relationships
with people locally in getting that water into the environment.
Dr Sinclair also highlighted the difficulty in drawing the right balance
between localism and central decision making for the Basin. When asked whether
he thought that the MDBA properly understood the connection between localism
and central decision making, he responded:
No. But I do not think many people have, because it is bloody
hard and we have not done it before. The thing that gives me great hope is that
the investment of successive Australian governments in the regional delivery
model of natural resource management has created a framework. We are not at
zero. There is an institutional framework out there for doing this stuff that
we have to build on, not say, 'Right, get rid of it; start again with some
newfangled local thing.' We already have these regional institutions out there.
Increasingly, they are involved in the management of carbon in the soils and
the landscape, and, increasingly, in the management of water. We need to build
their strength and the vertical connection with our overarching plans for the
However, Dr Sinclair also remained optimistic about how localism could
continue to make improvements for the Basin:
...part of the theme of my intro was that we have to recognise
that we are not at zero, that we have actually progressed a significant
distance. I was at a natural resource management sharing knowledge thing last
week. It is amazing the things people are doing in their local patches, but
most of them also have a pretty sharp eye to the way that their local action
can be amplified to provide a much better model for a bigger area...
At a community level there was also criticism about how localism (and
other stakeholder engagement) would engage communities in meaningful decision
making regarding the Basin Plan. As one community member in Hay, NSW stated:
A lot of that need to take water had been decided on long
before people were consulted on it, long before the thoughts of localism and
adaptive management came into play. A lot of that decision-making process, I
feel, has been made at an earlier point. All we can do now as stakeholders is
try and influence better outcomes for us in the wake of it.
In general, the committee supports the concept of 'localism' and agrees
that it should be adopted as a systematic part of the implementation of the
Basin Plan. It also acknowledges the work completed by the MDBA to date in
using it as a principle for developing key aspects of the Basin Plan. While the
committee is generally supportive of the concept of localism, the evidence
received in the inquiry suggests that much more work remained to have it used
effectively as part of the EWP and the Basin Plan more broadly.
However, as with so many aspects of the Basin Plan, the MDBA needs to
work harder to clearly articulate how localism will continue to be used in
future. The committee is concerned that this is an area where key stakeholders
feel they have received mixed messages on the issue.
In particular, the MDBA needs to delineate how localism applies in
certain cases or issue areas from the features of the Basin Plan that will
appropriately remain under central control. Localism should remain a flexible
option to solve problems regarding the Basin Plan as needed. However, the committee
is of the view that the use of the localism concept should not confuse or
muddle the process of implementing the Basin Plan.
The committee recommends that the MDBA provide a clear explanation of
how 'localism' is to be implemented under the Basin Plan.
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