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Thursday, 14 September 1978

Senator McLAREN (South Australia) - When this report was put down on 24 August I made some comments before seeking leave to continue my remarks later. This evening I want to follow on from where I left off. I think it is unfortunate that the Budget has superseded some of the statements made in this report. In my remarks on 24 August I referred to the amount of money which we thought was to be available over a period of five years under the National Water Resources (Financial Assistance) Act. I quote from page 8 of the report, in which it is stated:

The recent National Water Resources (Financial Assistance) Act 1978 has re-introduced direct Commonwealth assistance to the States for development projects and initially $200m will be provided over the next five years encompassing all aspects of water resources management for which Commonwealth assistance is considered appropriate. The areas set out in the Act are conservation and distribution works, water quality management, desalination of agricultural land, flood mitigation, and flood plain management and studies or investigations relating to all aspects of the assessment and utilisation of Australia's water resources. The Commonwealth has not announced any further details of the operation of this program.

In view of the fact that the national water resources legislation had been passed by the

Parliament in March this year, the Committee was of the opinion that if that $2 00m was to be distributed over five years it would have meant that an amount of $40m would have been provided each year for the implementation of the proposals contained in the National Water Resources (Financial Assistance) Act. But unfortunately this was not to be so. During the course of the hearings and on-site inspections by our Committee, we had brought home to us, I think very forcibly, the very desperate need for money to be expended on Australia 's water resources in the States that we visited. I commend the enthusiasm of the people in the Grafton area, the Bundaberg area, the Mackay area around Townsville, in the Riverina district of New South Wales around Deniliquin and Wakool and in the Sunraysia area of Victoria, which encompasses Mildura. I think that the people who accompanied our Committee on our inspections and when we took public evidence brought home to the Committee most forcibly and most enthusiastically the need for a greater amount of money to be expended on water resources in these areas.

As I pointed out on 24 August in my brief remarks on this mater, as a South Australian I was very disappointed that the people who depend solely on the Murray in the Riverland of South Australia had not seen fit to make a submission to our Committee. Of course, as they did not make a submission we did not make any onsite inspections in the Riverland of South Australia where, in my view, we could have gained a lot of knowledge which we could have included in our report and in our recommendations to the Government. I hope that the Government will take note of the recommendations that have been made in the report. I will not refer to all of them because it would take too long. I will refer to the ones which in my view are most pertinent. The recommendations are set out in chapter 1 1 of the report at page 62. Firstly, under the heading 'The Commonwealth's role', we stated in the report:

In order to effectively meet its current and future responsibilities and obligations in the assessment, planning and development of Australia's water resources the Committee recommends that the Commonwealth should: make a clear statement of the areas and objectives of the National Water Policy Statement that will constitute the Commonwealth's water policy;

In my view, and I would say in the view of the members of the Committee, that should be done at the earliest opportunity. Another of the most important recommendations was that the Commonwealth should separate its policy and nonpolicy water functions. The Committee recommended that the Department of National Development should have primary responsibility for Commonwealth water resources policy. We explained why on page 56 of the report. I will not go back to that tonight. In the report under the heading 'Development and funding', we state that the Commonwealth should: . . develop the National Water Resources (Financial Assistance) Act 1978 as the principal means of providing financial assistance to the States for water resources development and that the $200 million upper limit of the live year rolling program be reviewed annually based on the priorities established by the States;

A lot of confusion exists in the minds of the people whom we saw during our on-site inspections as to the real allocation and the method of allocating this $200 million under this Act. Many of the people to whom we spoke thought that either they or their State governments would have access to that $200m and that the people in the various regional areas could then nominate where the money was to be spent. Of course, this is not so. I think that some of them were very disturbed when we had to explain to them that the $200m was to be spread over five years and was to be shared among all the States involved under the Act. Of course, great surprise was expressed because these people could see that the projects that they had in mind were not going to come to fruition for a great number of years.

Unfortunately, during the debate on the national water resources legislation it was inferred, both in the other place and in this place, that the $200m would be a direct grant to be shared by the States. It took quite a lot of probing on my part during the debate on this legislation in this chamber to elicit from the Minister who was responsible that in fact this was not so. I am pleased that now it has actually been spelled out in the Budget- I am going to quote the appropriate section- that in fact it will not be a direct grant, as many people were led to believe. I turn to page 120 of Budget Paper No. 1, where this amount of $200m is mentioned under the heading 'Irrigation and Other Pastoral Water Projects'. The following is stated under that heading:

Expenditure under this heading comprises Commonwealth assistance to the States for rural water conservation, irrigation and flood mitigation. Assistance is to be provided to the States for these purposes in 1978-79 under the National Water Resources Program (NWRP) announced in November 1977. This program, which will extend over five years, provides for a Commonwealth contribution of $200 million as grants and/or loans for water related purposes in the States . . .

This has created a lot of confusion in the minds of the people who thought that the Commonwealth in fact was going to fund them by way of direct grant to the extent of $200m. This has proved not to be the case. About 70 per cent of that money will be provided to the various States on loan at the bond rate of interest and approximately 30 per cent will be provided by direct grant to the various States. As I said, this caused quite an amount of dismay among people when we advised them of this.

When we look further in the Budget Paper we see that the amount allocated for water projects is going to cause people, particularly people in the irrigation areas in my view, despite the recommendations in our report, some more heartburning. If we look at page 1 1 5 of Budget Paper No. 1 we see the amount of money that has been expended over the past few years for irrigation and other pastoral water projects. We find that on irrigation the actual expenditure in 1976-77 was $18.6m; in 1977-78 it was $10.3m; and in 1978-79 the estimated expenditure is down to $2. 8m. So the estimated expenditure for 1978-79 for irrigation purposes throughout the Commonwealth, which is partly funded by the Federal Government represents a drop of $7. 5m from the expenditure of the previous year. Of course, last year saw a drop of $8. 3m in expenditure from that of the previous financial year. So the problem appears to be that the Commonwealth is tightening up very severely on money that it is making available for water resources. I think that this will cause great concern.

If we look at page 1 1 1 of that Budget Paper, under the heading 'Urban Water Supply' we find that the money made available for this purpose has again been drastically reduced in this Budget. We find from a table on that page that in 1976-77 actual expenditure amounted to $35. 7m and in 1977-78 it amounted to $27. 8m, representing a drop of some $8m in 12 months. Then we find that the estimated expenditure for this financial year, 1978-79, is $12. 3m, representing a drop of $15. 5m. So there we have it: In the Budget itself there are drastic cuts in the provision of money for water resources projects throughout the Commonwealth. I only hope that when the Minister for National Development (Mr Newman) reads this report and transmits our recommendations to the Treasurer (Mr Howard) for the next Budget, the Government will see that there is a desperate requirement that the expenditure on the provision of water resources be upgraded to a great extent. I would hope that that could perhaps be done by way of the supplementary Bills that are brought down in the autumn, or even by way of a mini-Budget, if it is necessary. Such provision is most essential.

I would hope that Senator Thomas, who is the Chairman of the Committee and a Government supporter, would stress as strongly as he can within his party the need for extra finance to be made available for water resources in Australia. I hope that the honourable senator will do that. I will conclude my remarks by expressing that hope.

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