This chapter considers two of the inquiry's Terms of Reference:
the ability of the Commonwealth to bind state and territory governments
to meet their obligations under the National Water Initiative; and
the adequacy of state and territory water and natural resource
management legislation and enforcement arrangements.
The committee received very little information on the Term of Reference
in relation to the National Water Initiative (NWI). This chapter discusses
the progress of the implementation of the NWI. The discussion concludes with a
brief overview of the evidence that the committee received on the
implementation of the NWI and the appropriateness of these reforms to the
current situation in the Murray-Darling Basin (MDB or Basin).
A range of issues were raised with the committee with respect to state
and territory water and natural resource legislation and enforcement
arrangements. The discussion in this chapter is in the context of the
inadequacies of state and territory natural resource management and water
legislation and enforcement in relation to the impacts on the MDB. Some of
these issues are covered in greater depth and in a broader context in other
areas of the report and are therefore only briefly mentioned here.
Progress in implementing National Water Initiative reforms
In 2007 the National Water Commission released its First Biennial
Assessment of the Progress in Implementation of the National Water Initiative.
That report summarised the progress of the NWI saying:
...the NWI remains the primary and enduring national blueprint
for water reform in Australia. The implementation of the NWI is delivering real
improvements in the management, use and understanding of water in Australia. Despite considerable change in Australia's water circumstances since signature
of the NWI, the NWI's policy prescriptions continue to be widely accepted as
the right ones for Australia.
However the [National Water] Commission urges governments to
avoid complacency. There is much that needs to be done, and much that needs to
be done faster.
Overall, the National Water Commission found that governments had made
considerable progress in the implementation of the NWI over the first two years
of its operation. The National Water Commission highlighted the following areas
as requiring more work to improve and accelerate the implementation of NWI
overallocation of water resources;
groundwater and surface water interaction;
interception of water from land use change;
integrated management of environmental water;
water accounting, measurement and compliance; and
urban water management.
In February 2008, the National Water Commission provided an update on
the implementation of water reform under the NWI to the Council of Australian
Governments (COAG). That updated noted that the NWI continued to be the
'primary and enduring national blueprint for water reform'. Further, despite
considerable change in Australia's water circumstances in the four years since
the NWI was first signed, its policy prescriptions continue to be widely
accepted as the right ones for Australia:
The implementation of water reform is delivering real
improvements in the management, use and understanding of water. Significant
progress has and continues to be made across a broad range of areas of water
reform. Much of this progress can be attributed to the shared commitment by the
Australian Government and state and territory governments under the NWI.
The National Water Commission did highlight a number of barriers to the
'full and timely' implementation of water reforms, including:
a serious and growing shortage of skilled water resource
professionals to support water reforms and the necessary investments;
'policy bans' by some governments on certain urban water supply
in some cases a lack of clarity on the specific reforms required
and the accountability for delivering them.
The committee heard a range of views and opinions on the implementation
of the NWI and the applicability and appropriateness of its principles to the
current situation in the MDB.
The Queensland Department of Natural Resources and Water noted in its
submission that the Queensland Government has allocated substantial resources
to progress various elements of the NWI. The Queensland Department of Natural
Resources and Water stated that, overall, it is progressing well towards
fulfilling the requirements of the NWI, however, there are some issues which
have caused delays to the implementation of the NWI:
Queensland like all jurisdictions is facing resourcing
challenges and delays in delivering on some parts of the NWI caused by extended
drought conditions in many parts of the State and competition for limited
skilled staff. Some NWI actions by their nature require national co-ordination
and collaboration to ensure consistency between the states and territories. Queensland has representatives on the working groups that have been set up to progress
Mr Peter Cosier of the Wentworth Group of Concerned Scientists (Wentworth
Group) noted that in 2004 that organisation described the NWI as a 'historic
reform' for water reform and that the principles in the NWI were 'superb'.
However, Mr Cosier went on:
What has happened since 2004 is the subtle gain between
agencies at various states who then fling one example back as to why their
state is better than the other. Here we are sitting for the umpteenth inquiry
into why water reform [in] Australia has failed because we will not address the
fundamental issue that we have grossly over-allocated the system. Until policy
and governments of all levels confront that issue, we will be back here next
year and the year after and the year after having the same debates.
Dr John Williams of the Wentworth Group told the committee that in
getting water reform issues to reflect the principles in the NWI is 'still very
much ahead of us'. In particular, Dr Williams highlighted the lack of progress
that has been made in reducing consumptive water use and establishing a formal
entitlement for the environment.
The National Farmers' Federation (NFF) expressed concern over the
priority that States had given commitments under the NWI:
The agricultural sector noted that the original water reforms
were implemented according to what the State Governments saw as their
achievements. These were not necessarily aligned with the expectations of
More recently, NFF lobbied strongly that the implementation
of the NWI was proceeding at a level that prioritised State Government
objectives at the disadvantage of agriculture.
The committee notes the concluding comments of the National Water
Commission in its update to COAG in 2008:
Full and timely implementation of the NWI reforms is required
to deliver a nationally consistent framework capable of meeting Australia’s water challenges. Each element of the NWI is an integral and complementary part
of the overall reform blueprint and further progress in implementation is
required across the board to achieve the broad objectives of the NWI. In
addition, with respect to urban water, the NWI needs to be supplemented with an
additional set of reform commitments.
In light of the significant change to the context of water
reforms since the NWI was agreed, and capacity constraints across
jurisdictions, there is a strong case for improving implementation by
clarifying roles and responsibilities across governments and service delivery
entities, and reviewing timelines and priorities for implementation and
associated resourcing requirements.
It is the committee's view that the focus should not be on the
Commonwealth's ability to bind states and territories to their obligations
under the NWI. The committee is satisfied, given the reports of the National
Water Commission that the NWI is still the appropriate blueprint for water
reform, and that in a number of areas good progress is being made.
The committee believes that the focus should instead be on how the
Commonwealth can better assist States and Territories to meet their obligations
under the NWI. The committee notes that this may involve some amendment to, and
clarification of, roles and responsibilities of the parties to the NWI.
State and territory water and natural resource management legislation and
Natural resource management
Two significant inadequacies were highlighted in the inquiry in respect
of natural resource management arrangements:
a lack of harmonisation and integration of natural resource
management within and between governments of the Basin; and
a lack of consultation between catchment management authorities
(or equivalent bodies) and key stakeholders.
Some specific concerns in relation to the operation of catchment
management authorities in New South Wales were also raised with the committee
and those concerns are set out in this section as well.
Harmonisation and integration of
natural resource management
The lack of harmonisation within and between governments in the planning
and implementation of natural resource management strategies was a significant
inadequacy that was highlighted to the committee. For example, the submission
of Mainstream Environmental Consulting and RiverSmart Australia provided the
committee with the following damning assessment of the inadequacies of natural
resource management in the MDB:
...at the Federal level it appears there has been a failure to harmonise
programs and policy between the Murray-Darling Basin Commission (MDBC) and the
national programs rolling out funds for natural resource management (NRM). Programs
such as the Natural Heritage Trust, National Action Plan for Salinity and Water
Quality, National Landcare Program and the National Water Initiative’s
elements, have not been sufficiently integrated in their delivery, and the
relationship between them the [Basin Plan] is unclear. It makes a mockery of
the term 'integrated natural resource management' to allow these programs to continue
operating in virtual isolation, largely as a consequence of history and
When this same situation is replicated at State level, and
made worse by more government agencies being involved, it is little wonder the
Catchment Management Authorities are struggling and landholders are frustrated
and deeply suspicious of government initiatives.
A further example of this issue was highlighted by Mr Bruce Brown,
General Manager of the Namoi Catchment Authority who noted that there is no
association between catchment management authorities and the Murray-Darling
I think I am on the record that it would be better for the
catchment management authorities in the Murray Darling Basin to become in some
way associated with the Murray Darling Basin Authority and/or the Australian
government. It is clear, simple management that I think would make everybody's
job a hell of a lot easier...
If the Murray-Darling Basin is under Commonwealth government
control, and I am a catchment management entity that is in one of those
catchments, does it make sense to be a statutory entity under a state
government? I will not say any more.
Dr Don Blackmore, a former Chief Executive Officer of the Murray-Darling
Basin Commission, described for the committee the vision of how natural
resource management in the Murray-Darling Basin was initially intended to
operate in concert with other aspects of planning:
The original version for integrated catchment management in
the basin was to line up planning, to get natural resource planning integrated
with town planning, state planning and the like. In some areas that has been
successful, and Victoria has been more successful at it than anybody else. But
I see the next 10 years as challenging this mightily, simply because, even when
we go back into a wetter cycle, the scale of change we are going to see means
that we are going to have to support our communities with the best planning we
can give them...it would be better if they were working as a unit, however you
put that together; that, to me, is a very important outcome.
Dr Blackmore predicts that eventually planning, including natural
resource management, would be aligned because 'inevitably we will not be able
to afford four levels of government...'.
Consultation with stakeholders
Another important issue that was raised with the committee in relation
to natural resource management is the role of stakeholders and their
contribution, or lack thereof, to natural resource management:
...there is a serious problem with different treatment of
various stakeholders that results in perverse environmental outcomes and a
waste of taxpayers money and community investment in the development and
implementation of on-ground NRM projects.
Ms Sarah Moles gave the example of mining and energy resource companies
not having a strong history of engagement with Catchment Management Authorities
and regional NRM bodies yet their activities have significant implications for
accredited NRM plans:
Applications for mining, coal seam gas and petroleum
exploration permits is accelerating in the northern MDB (and elsewhere). Many
developments are designated 'projects of state significance' and receive
special treatment under State Planning Policies (eg. For the protection of high
quality agricultural land), and state legislation (eg. Queensland's Vegetation
Management Act 1999.) The corporations are allowed to undertake activities such
as broad scale clearing that other landholders are not permitted to do. Much
development occurred during a policy vacuum and there is no requirement to
comply with new regulations – particularly those covering the management of associated
Specific issues in relation to New
The committee also received a submission from the National Parks
Association of NSW which raised some specific concerns that organisation has in
relation to the operation of Catchment Management Authorities in NSW. Those
that the constraints on land-clearing in the MDB in NSW are
inadequate. Extensive land-clearing is still occurring throughout the Basin
through approved clearing, and through loopholes such as 'invasive native
species', 'change of regrowth date' and 'routine agricultural management
that current levels of baseline terrestrial environmental data
and planning in the MDB region are totally inadequate, and far worse than
information available in other parts of the state.
that responsibility for forcing NSW government agencies to abide
by environmental laws is being borne by the community. The National Parks
Association cited legal action it has taken against Forest NSW in relation to
the logging of River Red Gum State Forests as an example of this issue.
that there are a number of inadequacies in the Catchment Management
Plans for certain catchments in the Murray-Darling Basin.
Water management, monitoring and
One of the issues highlighted in relation to the state and territory
water management was the inadequacies in current water sharing plans. Specifically,
overallocation of water resources across the Basin, and the impact that this
has on the environment.
The lack of monitoring and enforcement of water legislation was also
raised during the course of the inquiry, specifically in relation to floodwater
harvesting. This issue is dealt with in Chapter 7 of this report.
The issue of overallocation is recognised as a problem throughout the
MDB. The Commonwealth, States and Territories are taking steps, through the NWI
and the Intergovernmental Agreement on Murray-Darling Basin Reform to
implement water reform. However, despite these initiatives, the committee was
provided numerous examples throughout the inquiry of inadequacies in States and
Territories implementing water reform initiatives.
Victoria's four per cent annual cap on trading water out of irrigation
areas (the four per cent cap) and 10 per cent cap on the amount of water
shares in any water supply system that can be owned without being associated
with land (the 10 per cent cap), was the subject of much discussion in this
regard. For example, Dr John Williams, of the Wentworth Group of Concern
Scientists, discussed the four per cent cap as an impediment to restructuring
of the irrigation industry:
The market has to be freed up so it works. So this issue of
four per cent caps on trading out of irrigation companies has to be addressed.
The issue of states putting legislation in that restricts trade with water and
land has got to be addressed. When you have efficient markets, that will be a
very powerful driver for innovation and change coupled with a structural
adjustment approach that makes sure we generate the maximum wealth and
resilience from the water we can afford to take out of the system.
These Victorian caps were also discussed in the context of the impacts
that they would have on the purchase of water for the environment.
The committee also heard some support for the four per cent cap in
Victoria. For example, Mr Richard Anderson of the Victorian Farmers Federation
responded to questioning by the committee on the economic impact of the four
per cent cap:
It may well have stopped the permanent trade, but that did
not stop the water from trading to other areas. There is a temporary market and
a lot of water has traded on that temporary market, so I think that [it] is
drawing a long bow, that it stopped that level of production because that
permanent water was not traded out. I think the other thing that people tend to
forget is that the four per cent applies only to the gravity districts and the
pumped pipe districts; it does not apply to diverters direct from rivers. That
is why 8,000 megs of high security Victorian water were actually purchased in
that first buyback.
Mrs Deborah Kerr of the NFF noted that all States were 'flouting' the
principle of competitive neutrality:
Competitive neutrality literally means that one jurisdiction
should not have an advantage over another jurisdiction or its irrigators in
whatever way. At the moment, we have all jurisdictions flouting it. You have
South Australia, whose irrigators do not pay for water, so when they are operating
in a marketplace they are literally not paying for the delivery and the water management
that other states charge their irrigators. They pay a $3 per megalitre levy at
the Murray. They pay within their trust for the water that they apply. You have
states that are providing money to their irrigators to allay the costs of water
charges; Victoria is an example of that. You also have the South Australian
government in the market, purchasing water for basically its permanent planting
irrigators to underpin survival water planting. It is providing an unfair
advantage, compared to other irrigators. It is not just one area. Premier Rann
quite literally has laid this at the feet of Victoria, being the four per cent
cap, but what we are saying is that all jurisdictions are flouting that
competitive neutrality principle, not just one.
During the course of the inquiry, the South Australian Government
indicated its intention to investigate a constitutional challenge against
upstream States to secure South Australia's rights to water from the Murray. In
making this announcement, Premier Rann made specific mention of Victoria's four
per cent cap as a barrier to a long term solution for the River Murray.
The committee questioned a number of witnesses on their views of a High
Court challenge by South Australia. Dr Arlene Buchan, of the Australian
Conservation Foundation, expressed concern that a High Court challenge may
delay work towards fixing the problems of the MDB.
Mrs Kerr of the NFF believed that the challenge would do more harm than good,
and there is a role for the Council of Australian Governments to resolve the
issue in a better way.
The Victorian Government was not the only State criticised for its lack
of action on water reform. For example, Mr John Clements of Namoi Water
expressed his concerns that while New South Wales has been engaging in water
reform for a decade, other States had not been as proactive. Mr Clements singled out South Australia for criticism in this respect, specifically the use of
'shallow, inappropriate lakes' for town water infrastructure and the use of
barrages to keep sea water out of Lakes Alexandrina and Albert:
The disaster is a lack of infrastructure and an avoidance by South Australia of getting into water reform and into infrastructure expenditure. It is
called concrete. The concrete that is inappropriate is eight kilometres of
concrete that holds the ocean out at Lake Albert and Lake Alexandrina. The
concrete that would be appropriate would be some deep storages somewhere to
store water deep so it does not evaporate and does not create salty residues;
to actually get some infrastructure for this state so it ceases to demand that
the system be run 24/7 so there is always water running past their pumps.
Mr Clements suggested that South Australia should spend money on
'appropriate' infrastructure like a desalination plant or deeper storages with
Mr James Danenburg, of the Conservation Council of SA, also thought that
there was more that South Australia could be doing to reduce the water that it
needs to take from the MDB:
In the first instance, [Adelaide has] got the most
underutilised resource in terms of stormwater; approximately 1.8 times our
annual take on the Murray in the average year goes out to the gulf in terms of stormwater
outflow each year. Even in a dry year it is still about one-third of our annual
consumption of Murray River water. It is an absolute tragedy and travesty that
this resource is not being adequately harvested.
Water sharing plans
The committee received substantial evidence relating to the inadequacies
of the water sharing plans for the management of water in the Basin. For
example, Dr Kerri Muller provided the following damning assessment on how
overallocation of water throughout the Basin is impacting on the South
Current Governance arrangements are failing the Basin's
natural assets and in particular the Lower Lakes and Coorong that are subject
to failures to implement sustainable water allocations and river management
policies across the whole Basin given their location at the bottom of the
system. There are over 140 plans covering the South Australian portion of the Murray-Darling Basin alone. Too much water is taken out of the Basin for its water
dependent ecosystems to survive and this has been evident in the declining
state of the environment particularly since the wet conditions of the 1990s
that spawned extensive water resource development as well as a burst of health
for the Basin's wetlands.
The Inland Rivers Network (IRN) provided the following opinion on the
inadequacies of the NSW approach to water sharing in the Basin:
The experience of IRN with respect to the Water Sharing
Plan approach as applied in NSW, which has effectively entrenched a 15-year
regime of over allocation, a cap system that has failed to take account of
floodplain harvesting, and lack of adequate resources to ensure compliance, has
been disappointing. This suggests that it is the lack of political will, rather
than a lack of expert scientific understanding, that has allowed the impending
MDB crisis to build to its current level.
IRN acknowledge that 'winding back' is more painful than placing
restrictions in the first place, noting that communities have been allowed to
establish and expand on the premise that economic growth is necessary and good,
without being required to consider the economic 'externalities' that ultimately
lead to high cost, socially and financially.
The CSIRO's submission also expressed the view that existing state water
plans in the MDB offer very little protection for the environment under a
future situation of a long-term reduction in average surface water
Existing water sharing plans provide greater reliability to
consumptive water users than to the environment. Although all jurisdictions
have programs of environmental condition monitoring, these are not used in an
adaptive management framework to improve water sharing arrangements in order to
achieve more balanced outcomes. More flexible and adaptive processes for
resource sharing and environmental management would be necessary for achieving
Dr Bill Young of CSIRO highlighted that these comments are not about the
level of protection for the environment per se. Rather, the comments are
specifically about the impact on consumptive use verses the environment at
times of reduced water availability under climate change.
The issue of a lack of harmonisation and integration in relation to
natural resource management is probably a function of the historic fragmented
management arrangements for the MDB, which were discussed in Chapter 2 of this
In considering the states and territories water management arrangements,
the committee noted that discussions, at times, appeared to deteriorate to the
level of a finger-pointing match as to who is doing the worst job. For this
reason, the committee was pleased to receive material provided by the NFF
outlining evidence that Australia's water management is leading the world.
The committee is conscious that there are no easy solutions to water
management. The committee believes that the on-going drought in the MDB and the
very real impacts of climate change that are occurring in the Basin have done
much to focus the attention of state and territory governments on this issue.
The committee reiterates its conclusions from Chapter 1, that what is
required now is the cooperation between the Commonwealth and Basin States. The
committee urges all parties to engage in the process of developing a Basin Plan
and make the necessary adjustments to water sharing plans that are required
under that process.
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