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Monday, 16 June 2003
Page: 16430

Dr STONE (Parliamentary Secretary to the Minister for the Environment and Heritage) (5:07 PM) —The quality and adequacy of Australia's water supply is clearly one of the key issues for our society this century. It has dominated the development of this nation—and debate about development—for the last 150 years. Of course, there is nothing new about water shortages in Australia or problems of algal blooms or fresh water turned salt. In 1829, explorer Charles Sturt happened upon the banks of the Darling River and declared the water too saline to drink. A year later, in 1830, at the same spot, he found that the Darling's water, though sweet, was turbid and had a taste of vegetable decay as well as a slight tinge of green. He was probably observing for the first time in European literature a blue-green algal bloom.

The major problems of water management in Australia stem from the fact that both run-off and rainfall are extremely poorly distributed in time and space. One-third of mainland Australia has an average annual rainfall of less than 250 millimetres and is classified as desert. Another one-third has an annual rainfall of between 250 and 500 millimetres and is classified as semiarid. With the exception of the far north, with its regular summer rainfall pattern, and the far south, with its regular winter rains, Australia has no regular seasonal distribution of rain, and rainfall is erratic and variable.

Recent human responses to the Australian environment—that is, in the last 120 years—have seen the construction of very large storage reservoirs and a requirement to transport water over very great distances. Some people talk about the extraordinary fact that we have more water per capita stored in Australia than any other continent. But if you understand the aridity and the distribution and variability of Australia's rainfall then that should come as no surprise at all. There are thousands of kilometres of channels transporting water from storage in highland areas to the arable land, where a security of supply has provided for the development of permanent plantings of vines, fruit trees, mixed horticulture, cereal growing, pastoral development and the dairy industry. In fact, $28 billion worth of produce now comes off just 0.5 per cent of the continent of Australia—the 0.5 per cent which is irrigated. This is a testament to the hard work and ingenuity of generations.

Although water use for irrigation and other purposes did not commence on a significant scale until after the 1880s, development was rapid during a time when we just did not understand all the consequences of drainage systems or the hydrology of this country. Over two-thirds of the water in the Murray river system is now diverted each year, and 90 per cent of this two-thirds is diverted for use in irrigation. Outflow from the Murray to the sea has been reduced from about 13½ million megalitres per year down to 4.9 million megalitres per year. Water ceased to flow to the sea at the Murray mouth in 1981, 1995 and 2002-03. While this phenomenon would have occurred in very dry series of years before dams were built and diversions were made early in the 20th century, the reality is that the Murray-Darling Basin rivers now experience a drought-like situation in 61 in each 100 years compared to five drought-like years in each 100 years before damming, irrigation and urban development. Hence we have the death throes of some 1,200 kilometres of Murray red gum and box on the banks of the Murray from Euston towards Adelaide.

We know full well that the use of water for irrigation not only reduces dilution flows in streams where you have a salt-laden landscape but also mobilises salt, increasing salt loads in the streams. However, if we are looking for causes, if we are looking for someone to blame—which I suggest is not a very useful exercise but is one a lot of people indulge in—much of the salt affecting the basin's major southern rivers—the Campaspe, the Goulburn, the Loddon and the Avoca—is coming from ground water systems originating on the northern slopes of the Great Dividing Range in Victoria. These slopes were initially cleared in the 1860s by goldminers and by those looking for blocks of timber to pave the streets of Melbourne and to put into the boiler boxes of the steam engines that drove the great manufacturing of the early days of Ballarat, Bendigo, Melbourne and Geelong. The salt is also coming from the western slopes of New South Wales, whose deforestation similarly helped in the development of the great cities of that state.

The national salinity audit showed that 60 per cent of the increased salinity predicted in the lower Murray will come from dryland sources rather than irrigation areas in the future. Of that 60 per cent, over half will come from the Mallee Region of the lower and middle Murray. The rest will come from the dryland parts of catchments in Victoria, New South Wales and Queensland. So we are not just talking about irrigation as the generator of the salt problems which are going to make water in Adelaide less than potable in about 50 years. While state governments once worked to build separate water law regimes and water supply infrastructure within the confines of their states, the challenge for us now is to integrate water management, resource management and water law across the states that share great basins like the Eyre Basin or the Murray-Darling Basin in eastern Australia. We must work across catchments, and we must deliver back to the environment more water—which may have multiple uses for tourism and recreation or which may also be used for irrigation—because we understand that the system as we now know it is not sustainable.

Professor Peter Cullen makes a number of very important points about the need for our future to be different. He argues, for example, that we must treat the causes, not just the symptoms. In particular, he argues that we could double GDP and halve water use if we invested in water savings—that is, in finding savings in current water consumption and directing these savings to environmental purposes. This, I think, is our great challenge. He also talks about the more efficient irrigation use and other water consumption uses coming about, in particular, as a result of a viable market for water. We have had a market for water, of course, in Victoria and in other states, including South Australia and parts of New South Wales, for quite some time. There should not be an argument anymore that separating water from land is a problem for farmers. The issue instead is who can buy that water and where that water can be transferred to after sale so that it does not exacerbate environmental problems and so that it delivers maximum benefit back to regional economies. That is the issue confronting us.

In recovering water for the environment, we must give security of entitlement to those who currently have rights to its use and who wish to continue to have entitlements or access to some water in the future. If there is no security of entitlement, we cannot expect banks and other lending institutions to invest in our great rural economic endeavours—in particular, in agribusiness. The licence, too, must be a percentage of storage, not a set volume. In that way the percentage of storage can move about in dry or wet seasons. It is a more equitable and sensible way to progress. We must integrate surface run-off, ground water systems and stream entitlement considerations. These are not separate, isolated hydrological systems; they are interlinked and one depends on the other. This needs to be understood in the way we allocate entitlements to ground water or surface flow.

Peter Cullen has talked about the development of an environmental trust. He talked about this recently in Adelaide, some two weekends ago. I support the exploration of the notion that some $100 million or so could be put into a trust and water could be purchased for the environment from those who offer to sell all or part of their entitlement in a voluntary and open market system. This environmental water trust would also be responsible for delivering and maintaining agreed environmental assets. It could also accept investments from super funds and others looking to purchase water for the environment as part of a philanthropic endeavour. The trust would be a customer of the Murray-Darling Basin Commission if it were in the eastern part of Australia and, therefore, it would pay its way in terms of its share of storage and delivery charges. We can imagine that this trust might trade in environmental flows by buying when there are flood conditions and selling in drought.

We have to consider all of these notions. But we must also ensure that we do not get carried away with the idea of a national market for water as if water were a kilo of coffee. Water has different characteristics and it is intimately associated with its own source and supply systems. It should be traded only in places where it can be transported without environmental, social and economic impacts on others who share the supply or ecosystem. There are examples from states where a water market is well developed. They have taken on board the issues of stranded assets; we have taken on board in Victoria what happens if too much water is sold from one region too quickly, potentially causing local economic collapse. All of these considerations must be part of the debate. (Time expired)