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Tuesday, 14 August 2007
Page: 83

Mr GAVAN O’CONNOR (6:40 PM) —In my opening remarks in this debate, could I say to the member for Indi that the criticisms she has levelled against the Victorian government relating to visionless ministers and governments and the lack of action in these matters could equally be directed at her own government.

The Water Bill 2007 is one of the most important pieces of legislation to come before the 41st Parliament. It gives effect to major measures announced in the Commonwealth government’s $10.5 billion National Plan for Water Security announced by the Prime Minister on 25 January 2007. According to the government’s explanatory memorandum accompanying the bill, the overall funding of the national plan will be directed to modernising Australia’s irrigation infrastructure, addressing overallocation in the Murray-Darling Basin, reforming management of the Murray-Darling Basin and also new investments in water information. There would not be a member of this House who would be in disagreement with those major initiatives and measures in the bill. We on this side of the House pose the question: why has it taken the Howard government so long to implement these very important reforms?

As a Victorian member of this House, I am appalled at the way this important matter has been handled by the Howard government. I support wholeheartedly the second reading amendment moved by the member for Grayndler which reads:

“whilst not declining to give the bill a second reading, the House:

(1)   notes that modern national water reform began with Murray Darling Basin Act in 1992 and the historic COAG Agreement on water reform in 1994 led by the Keating Labor Government;

(2)   regrets that, despite clear warning signals about the health of the river system, it has taken 13 more years to see the next stage of Commonwealth action to address the problems of the Murray Darling Basin,

(3)   is concerned that the legislation before the House represents a second best solution on national water reform;

(4)   deplores the Government’s failure to consult in good faith with State Governments and other stakeholders over the Water Bill 2007 and the related Intergovernmental Agreement;

(5)   believes the water reform process must continue so we properly fix the over-allocation of water licences in the Murray Darling Basin, ensure harmony between the environment and consumptive use, and help address the impact of drought and climate change on water supply;

(6)   notes that climate change will have a significant impact on water supply generally and the health of the Murray Darling Basin in particular;

(7)   notes that the CSIRO will provide an important report in late 2007 on the hydrology of the Basin and what the sustainable extraction levels are for the Basin; and

(8)   notes that the following is needed for national water reform:

(a)   a cooperative and constructive approach with State Governments to assist water reform and investment in urban and rural water infrastructure;

(b)   full implementation of the National Water Initiative principles agreed to in 2004;

(c)   fixing of the over-allocation of water licences once and for all, and the establishment of coherent, streamlined rules which ensure the problem of over-allocation never recurs;

(d)   recognition that economic instruments including water trading are necessary to address the fact that water has been over-allocated, undervalued and misdirected;

(e)   proper consultation with key stakeholders in the Murray Darling Basin, including all water users, farmers, water scientists, environment groups and the broader community to ensure the adoption and consistent use of efficient agricultural practices;

(f)   returning sufficient water to the rivers in the Murray Darling Basin to ensure the long term health of all rivers, wetlands and all connected groundwater systems in the Basin and, as a result, ensure the health of the communities and businesses that rely on the health of those rivers; and

(g)   measures to ensure industrial and urban water users adapt to maximise water efficiency”.

I read out that second reading amendment because it encapsulates the key elements of Labor policy that have been there for decades—elements that were articulated historically by the Hawke and Keating governments and continue to be proposed in various statements that have been made on water reform by shadow ministers. I observe with some dismay the attempts by the Howard government and my predecessor in this debate, the honourable member for Indi, to blame the state of Victoria and the Brumby Labor government for compromising the Commonwealth’s legislative intent to assume total control over the Murray-Darling Basin.

Remember that this is the most centralist Prime Minister that this country has ever seen—not that we on this side of the House would argue with some of the intent as far as the Commonwealth’s control over matters of national water reform are concerned. But I think that in the bowels of the Liberal Party, especially among some of the dries that we know are on the other side, the actions of this Prime Minister in this legislation must send a shiver through their spines—if they have any left because they have caved in to this very conservative Prime Minister on most of these sorts of issues up to this point.

The Victorian government has done no less than it was elected to do—that is, to defend the interests of Victorian farmers, irrigators and communities and to protect the wider commercial and constitutional interests of the state in this important matter. After all, we are a federation of states and the Prime Minister above anyone else, given the political stable that he comes from, ought to appreciate the determination of any state to protect its overall interests in any proposal involving the ceding of such powers to the Commonwealth as the Prime Minister proposed in January this year. The real issue in this debate is not the alleged intransigence of the Victorian government as it seeks to defend its interests; it is the breathtaking incompetence of this government, firstly, in neglecting the problem for the past 14 years and, secondly, in perverting the political process to engineer a hastily constructed fix for a national problem in an election year.

The people of Australia see through this Prime Minister as easily as they see through Glad Wrap. No amount of huffing and puffing by the member for Wentworth—who has been surfing the dry river beds of the Murray-Darling Basin to further his prime ministerial ambitions—can alter the political fact that this issue has only come on the government’s radar in an election year. What a scathing indictment it is of a government that has been in power for well over a decade that, in an election year, the Prime Minister, facing political oblivion, has reached into his political hat to pull out another dead rabbit. To fully grasp the depths of the contamination of good governance and proper political process by this hopeless government, one first has to comprehend the issue and the magnitude of the problem Australia faces. In the speech of the Minister for the Environment and Water Resources the dimensions and complexities of the issue are outlined. We are dealing here with a river basin serviced by three river systems that are acknowledged to be in an extremely stressed state. The Murray-Darling Basin is acknowledged by us all to be of national economic, social and environmental significance. It spans the states of Queensland, New South Wales, Victoria, South Australia and the Australian Capital Territory. It covers one million square kilometres—some 14 per cent of Australia’s land mass—and is home to some two million people. It generates $10 billion worth of agricultural production annually.

Drought has brought the issue of the sustainability of the basin into sharper focus, but we have known for decades that it was under enormous pressure and stress and had the potential to collapse. It is against this background that in January 2007—some 11 years after being elected—the Prime Minister announced his National Plan for Water Security. One would have thought it would have been one of the first policy initiatives of any government that had come to power when this government did. Here we have it: over a decade later this government is lining up to the gate with a national plan for our water security. We now know that this great plan was hastily cobbled together to suit the Prime Minister’s needs—not the urgent water needs of the nation. This great plan—some $10 billion over 10 years—was cobbled together in the Prime Minister’s office over the Christmas break without the Treasury or the Department of Finance and Administration being involved in its construction.

Members here need to understand the length and breadth of the incompetence of this government in the matter. Some $10 billion worth of expenditure—a major policy initiative—was cobbled together in the Prime Minister’s office without proper consultation with Treasury or Finance. It did not end there. Furthermore, this important national initiative did not even go to cabinet for approval. Can you believe it—this very important national policy initiative never even went to other cabinet ministers for approval. It is extraordinary. But that is not all. Given the constitutional and administrative complexities associated with the issue, the Prime Minister did not even formally consult with affected states about the proposed Commonwealth takeover of power over water in the basin, nor did the government consult extensively with key stakeholders, including farmers and irrigators.

This plan was announced on the political run. It contained very little of the policy detail needed to carry the states with the Commonwealth in this debate. However worthy this objective is, the initiative from the outset has lacked the careful, political, technical and administrative planning that would ensure its ultimate success. At the end of the day, the government’s failure to do this has let all the stakeholders and this great nation down. It is little wonder that the government has been caught out. It was a political stunt from the outset and it should never have been pulled. Given the importance and complexity of this issue, this proposal should have been negotiated outside of the current electoral cycle, but that would have been too much to ask of a visionless PM simply out to save his political skin.

With regard to the major elements of the bill, its key structural reform is the creation of a Murray-Darling Basin Authority with the express power to ensure that the basin’s water resources are managed in a sustainable way. The authority’s key function will be the preparation of a strategic plan for the sustainable use of water resources in the basin. According to the minister, the authority’s basin plan will set long-term, average sustainable diversion limits for the basin; identify risks, such as climate change, to water resources in the basin; provide an environmental watering plan to optimise environmental outcomes; prepare a water quality and salinity management plan, which may include targets; and introduce rules about trading of water rights in the basin’s water resources.

The bill relies solely on the Commonwealth’s constitutional powers. The basin plan will be complemented by state water resource plans which must receive accreditation from the authority for any access to funding to be secured. The Commonwealth will become a water holder by virtue of its share in water savings made under the National Plan for Water Security. Its environmental water share will be managed by a Commonwealth environmental water holder with the express charter to use the Commonwealth’s environmental water to protect and restore environmental assets of the Murray-Darling Basin and assets outside of the basin where the Commonwealth owns water. I am pleased that the Bureau of Meteorology has been given additional functions to collect and publish high-quality water information for use by stakeholders, planners, politicians and the community. I am also pleased that an expanded role will be given to the ACCC in developing and enforcing water charge and water market rules consistent with the National Water Initiative.

As occurs rather frequently with important legislation that is rushed into this House by the government, the support of the opposition is given somewhat reluctantly, and this is another such occasion for me in considering this legislation. This legislation could have been a model for cooperative federalism. Instead, we have a second-best and, I would say, flawed bill that only takes all stakeholders a little way down the important road of water reform that we need to traverse with increasing urgency.

Let me take this opportunity to commend the senators who have laboured under quite unreasonable time constraints to give key stakeholders an opportunity to air their legitimate concerns about the shortcomings of this legislation. It is clear from that process of scrutiny that there are areas of real concern in this bill and that flow from it. For example, all stakeholders are unclear at this point about the yet to be released intergovernmental agreement, the IGA, which will lay the basis for the necessary operational arrangements between the Commonwealth and the states and will be necessary for the water plans to operate effectively. It is reasonable to ask why such an important document has not been made available to this parliament, state governments or stakeholders in the basin who may be directly affected by its contents.

Another substantial criticism is the new level of bureaucracy that will be introduced by the bill. Under this legislation we now have the Murray-Darling Basin Commission and the Murray-Darling Basin Authority; we have two ministerial councils and a National Water Commission. We have more bureaucracy here than they had in the old Soviet Union. Legitimate concerns have also been expressed about the lack of consultation with stakeholders and the inherent risks associated with some institutional arrangements in the bill, which might mean inordinate delays in implementing reform. And, of course, given that no-one is yet privy to the government’s position on the IGA, it itself could constitute an obstacle to action, when immediate and concerted action is required to address the problem.

Let me conclude by stating again my disappointment that the great modern water reform agenda, commenced by the Hawke and Keating governments in 1992 and enshrined in the Murray-Darling Basin Act 1992 and the great COAG national water reform agreement struck in 1994, faltered so badly under the Howard government over the past 10 years. There are some salient lessons to be learnt from our recent history. One is this: never let the National Party near any reform agenda. The reason we have such a problem in New South Wales is due to the influence of the National Party and the overallocations that have occurred in that state and in that part of the basin.

We know the National Party’s commitment to what is really required to get this basin on a sustainable footing. One can recall National Party members of this House, one after the other, getting up to say that we ought to zap the cap. Remember that—‘We ought to zap the cap’? I think we know, in a political sense, who we ought to zap and keep right out of the reform process: the National Party. They are an impediment to progress and the national water reform agenda. I counsel the government, and Liberal members particularly: brook no input from them, because they will pollute everything they touch as far as this reform agenda is concerned. I reluctantly support the measures in this bill so that the great national water reform agenda, commenced by the Hawke and Keating Labor governments, can progress even a little.