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Thursday, 25 September 2008
Page: 39

Mr GARRETT (Minister for the Environment, Heritage and the Arts) (1:13 PM) —I move:

That this bill be now read a second time.

The current severe and prolonged drought, the onset of climate change and the consequences of past decisions and practices are placing an enormous strain on the communities, industries and natural environment of the Murray-Darling Basin.

Since pre-Federation times, water resources management in the Murray-Darling Basin has been characterised by tension between governments and competing interests, particularly between upstream users and downstream users.

It is time for effective action to address the challenges we are seeing. It is time for the Commonwealth to provide national leadership for present and future generations.

Today the government is putting forward reforms in the Water Amendment Bill 2008 that reflect a new era of cooperation and collaboration between Murray-Darling Basin governments for basin-wide water resource management.

In response to concern about many of Australia’s river systems, the Council of Australian Governments agreed in 1994 to reforms for Australia’s rural and urban water industries.

In 1995, as partners to the Murray-Darling Basin Commission, governments introduced a cap on diversions of surface water from the Murray-Darling Basin. This cap was based on historic levels of use.

We have, however, the situation today where science, and the evidence of what we can see for ourselves, is clearly telling us that our rivers and aquifers are stressed and overallocated.

This government was elected on a platform of ending the blame game and buck passing between Canberra and the states and territories. We have reinvigorated the Council of Australian Governments with a major reform agenda, underpinned by more effective working arrangements. We have established a policy and financial framework to address Australia’s long-term challenges.

One of those challenges is to secure a sustainable water supply in the face of a changing climate and the pressures of economic development.

Cooperative partnerships between the Commonwealth and state and local governments, farmers, industry and the community are critical to addressing this challenge.

We took a major step forward in March 2008, with the Memorandum of Understanding on Murray-Darling Basin Reform, signed by the Prime Minister and the premiers of New South Wales, Victoria, South Australia and Queensland, and the Chief Minister of the Australian Capital Territory.

The central principle of the memorandum of understanding was to improve planning and management by addressing the basin’s water and other natural resources as a whole, in the context of a new federal-state partnership.

The agreement embodied the sound principles of Commonwealth-state relations by assigning a basin-wide planning and management role to the Commonwealth, while providing for clear participation by basin states in decision making and affirming the autonomy of basin states to manage water within their catchments.

In July 2008, as promised, an intergovernmental Agreement on Murray-Darling Basin Reform was signed by first ministers, which built on the principles of the memorandum of understanding. In the intergovernmental agreement, governments committed to a new culture and practice of basin-wide management and planning, through new governance structures and partnerships.

Today I present historic governance reforms in the Water Amendment Bill 2008 that are possible only because basin state governments have agreed to propose legislation to their parliaments providing for a referral of certain powers to the Commonwealth parliament in accordance with section 51(xxxvii) of the Constitution.

The matters covered include:

  • the transfer of current powers and functions of the Murray-Darling Basin Commission to the Murray-Darling Basin Authority;
  • the strengthening of the role of the Australian Competition and Consumer Commission by extending the application of the water market rules and water charge rules; and
  • enabling the Basin Plan to provide arrangements for meeting critical human water needs.

The Commonwealth bill is being introduced into the House at this time as the bills to refer power to the Commonwealth have entered both the New South Wales and South Australian parliaments. Indeed, the bill passed through both houses of the New South Wales parliament yesterday. I look forward to the referrals by the Victorian and Queensland parliaments, so that this bill can be considered in another place.

The bills being considered by state parliaments refer specific powers and a limited, defined subject matter amendment power to the Commonwealth. In relation to the amendment power, the Commonwealth has committed to securing the agreement of states before proposing any amendments to the Commonwealth parliament. Reflecting the cooperative underpinnings of the referral, any amendments proposed by the Commonwealth would be consistent with the principles of the intergovernmental Agreement on Murray-Darling Basin Reform signed by first ministers.

The Water Amendment Bill 2008 represents a historic agreement for the long-term reform of water management in the Murray-Darling Basin. It introduces a new era of cooperative arrangements between the Commonwealth and the states, so that governments, industry and the community can face head-on the challenges of water scarcity and water security.

Thanks to this strong collaborative approach, together we are putting in place a much better system for managing the basin in the national interest. We will now be in a position to make the hard, but necessary, decisions to ensure a sustainable future over coming years.

A key element of the Water Act is the preparation of a whole-of-basin plan by the independent, expert Murray-Darling Basin Authority in the context of clear accountability to the Commonwealth minister.

The Basin Plan will also include an environmental watering plan to coordinate management of environmental flows throughout the basin, including the additional environmental water that is recovered by the Commonwealth.

Central to the Basin Plan will be sustainable diversion limits on surface water and groundwater use in the basin to ensure the long-term future health and prosperity of the Murray-Darling Basin and to safeguard the water needs of the communities that rely on its water resources.

Further to the Water Act, this bill introduces governance arrangements for the new Murray-Darling Basin Authority that take account of the need to work closely with the states.

It is imperative for Commonwealth, state and local governments to share a common understanding of the problems in water and to respond in a comprehensive and coordinated way.

This bill provides basin states with a clear and important advisory role in the preparation of the Basin Plan through a new Murray-Darling Basin Ministerial Council and the Basin Officials Committee. The basin states will also have a major role in putting the Basin Plan into effect.

While it is important that the states have a seat at the table, final approval of the Basin Plan will rest with one government, the Commonwealth, acting in the national interest.

The states will also retain a decision-making role through the new ministerial council in relation to specific functions that will be moved from the Murray-Darling Basin Commission into the new Murray-Darling Basin Authority.

This bill delivers on our election commitment to bring the Murray-Darling Basin Authority and the Murray-Darling Basin Commission together into a single body. This ensures there will be a single body responsible for overseeing water resource management in the Murray-Darling Basin. This body will be the Murray-Darling Basin Authority, an independent, expert agency established by the Commonwealth. The authority has the functions and powers, including enforcement powers, necessary to ensure that basin water resources are managed in an integrated and sustainable way.

The authority will have autonomy to prepare the Basin Plan, the first-ever single basin-wide water resource management plan. The Commonwealth minister, in approving the Basin Plan including the new sustainable cap on water diversions, will be accountable to the people of Australia through this parliament.

The Basin Plan will take account of future climate change and address the legacy of past overallocation. It will also set out arrangements for securing the critical human water needs of people reliant on the river Murray.

A properly functioning water market will be essential to help the irrigation industry manage future reductions in water availability.

The Australian Competition and Consumer Commission will play a key role in improving the functioning of the water market in the Murray-Darling Basin by monitoring and enforcing compliance with water charge rules and water market rules.

The rules will reflect the water charging and trading principles in the National Water Initiative, ensuring that the water market in the basin works efficiently and that there are no inappropriate barriers to trade.

This bill strengthens the role of the ACCC by:

  • providing for the water charge rules and the water market rules to apply to all water service providers and transactions. This means that all users will be assured of a uniform approach to regulation, irrespective of the structure of their water service providers; and
  • extending the reach of the water charge rules to enable the ACCC to determine or accredit determination arrangements for all regulated water charges. This will promote a uniform approach to the regulation of rural water charges to the benefit of water providers and users.

The bill also allows for individual states and territories to choose to extend the geographic reach of the rules and the ACCC’s new powers beyond the basin, so they are not necessarily limited to the Murray-Darling Basin.

The bill will allow markets to operate much more effectively in allocating water between competing uses, improving water use efficiency and delivering water to its highest value uses.

This government has recognised that a new approach to water resource management is required to deal with the pressures of climate change, economic development and environmental degradation in the Murray-Darling Basin.

The Water Amendment Bill 2008 will implement governance arrangements that, in the long term, will improve the use and management of the basin’s water resources and will protect and enhance the basin’s social, environmental and economic values.

These reforms are for the medium to long term. The first Basin Plan will commence in early 2011. The government recognises the severity and urgency of the current condition of the basin.

The Commonwealth government is complementing its governance reform with our $12.9 billion Water for the Future program, which has four priorities: tackling climate change, supporting healthy rivers, using water wisely and securing our water supplies.

In delivering Water for the Future, we are setting a new standard in national leadership and cooperative relations with state and territory governments.

In July 2008, when the Intergovernmental Agreement on Murray-Darling Basin Reform was signed, the Commonwealth announced investments of close to $3.7 billion for significant water projects in South Australia, New South Wales, Victoria, Queensland and the Australian Capital Territory. These projects will improve irrigation efficiency, raise the productivity of water use and make water savings that will be returned to the rivers of the Murray-Darling Basin.

What Australians want in the Murray-Darling Basin is action. This government is responding with immediate practical measures to take the stress off the rivers of the basin. For the first time in the history of Federation, the Commonwealth government is buying water entitlements from willing sellers in the water market to tackle overallocation in the Murray-Darling Basin so that rivers and wetlands will get a greater share of water when it is available.

The bill revises the risk assignment framework for the Murray-Darling Basin. Where states have also adopted these new arrangements in legislation, the government intends to recognise the state adoption through an amendment to the bill if a state parliament passes the relevant legislation before the Water Amendment Bill leaves this House. I note that the New South Wales Legislative Assembly and Legislative Council passed such provisions yesterday. Accordingly, we intend to recognise the adoption by New South Wales through an amendment to this bill.

The government has already established the statutory position of the Commonwealth Environmental Water Holder to manage water entitlements that we purchase or recover through infrastructure efficiency measures. Our environmental water entitlements will be used to protect and restore wetlands of international importance, as well as rivers and wetlands that support listed migratory and threatened species.

We are accelerating specific infrastructure and water savings projects to return flows to rivers and wetlands and to secure water supplies for townships, communities and irrigators.

The government is making wise investments to create efficient irrigation areas and return water to our rivers. We aim to secure a long-term sustainable future for irrigation communities in the context of climate change and reduced water availability into the future.

We are working with irrigation communities to buy out water entitlements from areas willing to move out of irrigation, facilitated by a price premium reflecting the value of water savings from closure of infrastructure such as supply channels.

We are working with state governments to co-fund the purchase of appropriately located irrigation properties and their water entitlements to enhance environmental outcomes in the northern basin.

We are also committed to freeing up water trade in the basin to allow water to go to where it brings most benefit, as agreed under the National Water Initiative.

Governments and the community need to have a clear understanding of the volume of water in storage across the Murray-Darling Basin. To this end, we have initiated the first comprehensive, detailed and externally reviewed audit of both public and private water storages in the basin. The audit will be updated every three months and the information will be publicly available.

These are practical measures which are part of our long term plan to deal with a highly stressed river system, which is suffering from the impacts of overallocation and climate change.

The Commonwealth is responding to the enormous challenges we face in the Murray-Darling Basin with national leadership and decisive on-ground actions. These things have never been done before and they will require us to make some difficult decisions, but that does not in any way detract from the fundamental need to take action now.

I can introduce the Water Amendment Bill 2008 because the Rudd government has reached an historic agreement with basin states to refer certain Constitutional powers to enable the Commonwealth to manage the waters of the Murray-Darling Basin as a single system, in the national interest. This is much needed, long overdue reform in governance that will put the Murray-Darling Basin on the right footing to face the challenges ahead.

This bill implements governance reforms that are complemented by the $12.9 billion investment under our national water plan, Water for the Future, which is already being rolled out. 

The government recognises that many basin communities are doing it tough. They have been under stress for a number of years. With reform in governance and substantial but wise investment, the Commonwealth is working with basin communities and basin governments to deliver a sustainable future.

Debate (on motion by Mr Dutton) adjourned.