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Thursday, 19 September 2002
Page: 6678


Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) (9:48 AM) —I move:

That this bill be now read a second time.

The purpose of this bill is to amend the Murray-Darling Basin Agreement to enable the sharing between the states of water made available in the River Murray catchment above Hume Dam as a result of the corporatisation of the Snowy Mountains Hydro-Electric Authority. The amendments also provide for the management of environmental flows in the River Murray.

The corporatisation of the Snowy scheme, and the implementation of these amendments, provide good news for the River Murray's environment and the communities and industries that rely on the river. It means that, for the first time, water users on the Murray and Murrumbidgee rivers will receive guaranteed levels of annual releases of water from the scheme. The River Murray will receive a significant boost in dedicated environmental water, sourced from increased efficiencies in the way we use the water in the river.

The governments of New South Wales, Victoria and the Commonwealth agreed to corporatise the Snowy scheme for a number of very good reasons. The most significant is to ensure that the benefits of competition reform in Australia's electricity industry can be accessed by the Snowy scheme. The legislation necessary to underpin corporatisation was debated and passed by this parliament in 1997.

The Murray-Darling Basin Amending Agreement, through which governments agreed to the amendments to the Murray Darling Basin Agreement, is one of a series of intergovernmental agreements that will give effect to corporatisation. The Snowy Water licence, issued by the New South Wales government, provides for the operation of Snowy Hydro Ltd within the New South Wales regulatory environment. It specifies rights over water, consultation and direction processes, exchange of data, the annual water licence fee and water release obligations.

Under the Snowy Water licence, Snowy Hydro is required to release minimum amounts of water into the Murray and Murrumbidgee rivers each year. Irrigators and the environment will have `first call' on water under the control of the scheme up to that level. This contrasts with the pre-corporatisation situation, where the volume of annual releases had to be negotiated with the then Snowy Mountains Council each year. The licence also contains release rules designed to avoid unnecessary spills from water storages and to provide additional water security during summer.

As part of the corporatisation process, the governments of New South Wales and Victoria conducted a Snowy Water inquiry to consider the benefits of additional environmental flows in the Snowy River to offset the impact of the diversion of water to the Murray and Murrumbidgee rivers by the Snowy scheme. The Commonwealth government also conducted a comprehensive environmental impact statement to assess all the environmental issues associated with corporatisation of the Snowy scheme and, in particular, to focus on the impacts of additional environmental flows on the Murray-Darling Basin. The governments have decided on the basis of these inquiries to return substantial environmental flows to the River Murray, the Snowy River and key alpine rivers in the Kosciuszko National Park. These flows will be found principally from water efficiency projects in the River Murray and in the Murrumbidgee and Goulburn-Murray river systems.

The Commonwealth has agreed to provide $75 million to fund water savings of up to 70 gigalitres annually that, when released from the Snowy scheme, will be dedicated to achieving environmental outcomes in the River Murray.

The New South Wales and Victorian governments have agreed to a long-term staged process to return 28 per cent of average natural flows to the Snowy River. As a first stage the two governments have agreed to provide $150 million each to achieve a target flow rate of 21 per cent to be returned over 10 years.

Throughout the corporatisation process, the Commonwealth has insisted on a number of important safeguards. First, allocations of water to environmental entitlements must not adversely impact on irrigators. Second, the allocations must not adversely impact on the rights and interests of the state of South Australia. Third, the commercial viability of the Snowy scheme will be maintained. Fourth, water for environmental flows will be sourced principally from verified water savings. Lastly, water for environmental flows in the Snowy and Murray cannot be consumed—they must flow through the river systems to the sea.

In summary, this bill asks the parliament to approve the Murray-Darling Basin Amending Agreement, which will, in turn, amend the existing Murray-Darling Basin Agreement.

These amendments to the Murray-Darling Basin Agreement are necessary in part because of the revocation of the Snowy Mountains Hydro-electric Power Act 1949 and to implement agreed outcomes from the corporatisation of the Snowy scheme, which occurred on 28 June 2002. The amendments make arrangements for the sharing of water from the Snowy scheme by New South Wales, Victoria and South Australia. They will protect Victoria's and South Australia's right to water from the Murray River if New South Wales fails to ensure necessary water releases from the scheme. The amendments also set out arrangements for the transfer of verified water savings and water entitlements into environmental entitlements for the Snowy River and the River Murray.

The amending agreement sets out arrangements for the management of the 70 gigalitres of River Murray environmental entitlements. Before 1 May 2004, the Murray-Darling Basin Ministerial Council will be required to develop environmental objectives and a strategy for retaining and releasing the environmental entitlements. The environmental objectives for the environmental entitlements must be integrated with other environmental initiatives on the River Murray. The amendments will also require the Murray-Darling Basin Commission to release and manage the environmental entitlements in accordance with the strategy developed by the ministerial council.

The governments will be required to inform the commission of proposals to achieve water savings or to purchase water entitlements for environmental entitlements to enable the commission to assess the possible effects of the proposals on the flow, use, control or quality of water.

The Murray-Darling Basin Amending Agreement has been agreed by the Commonwealth government and the governments of New South Wales, Victoria and South Australia. The amending agreement will also require the approval of the parliaments of New South Wales, Victoria and South Australia before it can be implemented.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Albanese) adjourned.