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Thursday, 20 September 2012
Page: 11363

Mr BURKE (WatsonMinister for Sustainability, Environment, Water, Population and Communities) (09:09): I move:

That this bill be now read a second time.

Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Bill 2012

This bill amends the Water Act 2007 to facilitate adjustment of the long-term sustainable diversion limit (SDL) under the Basin Plan, within clearly set limits, and with a clearly defined process to provide transparency to this parliament and the community. This mechanism will allow jurisdictions to work together collectively to improve on the socioeconomic and environmental outcomes of the plan.

I am committed to making a Murray-Darling Basin Plan to be presented to the parliament that delivers a healthy river, strong communities and sustainable food production. The Basin Plan involves far reaching reform of water management so that the basin is managed as a single connected area and in the national interest. It is clear that there will be a continuing need to adapt management of the basin’s water resources over the next decade to respond to opportunities to obtain and enhance environmental outcomes, with, at least, no worse socioeconomic conditions and, similarly, no worse environmental conditions. It is my view, therefore, that the Basin Plan should include an SDL adjustment mechanism. The mechanism will allow the outcomes of work to improve river management rules, infrastructure upgrades and the removal of constraints on the delivery of environmental flows to be integrated into the Basin Plan.

The inclusion of an SDL adjustment mechanism in the Basin Plan, which will be facilitated by this amendment, has been sought by all basin governments. Stakeholders also raised the need for such a mechanism as part of the 20-week public consultation on the Basin Plan. The House of Representatives Standing Committee on Regional Australia, in its July 2012 Report into certain matters relating to the proposed Murray-Darling Basin Plan, also recommended the Commonwealth develop a mechanism to adjust SDLs automatically.

This amendment will allow the adjustment mechanism in the Basin Plan to operate as effectively as possible.

It is not the purpose of the bill to create the legal possibility of a mechanism. This already exists under the section 23 of the current Water Act. However, all jurisdictions and the Murray-Darling Basin Authority (the authority) have now agreed that it is desirable for the Basin Plan to include an improved adjustment mechanism. The bill sets out the broad parameters for the mechanism and how it is intended to operate, and introduces transparency in the process, requiring any use of the mechanism to be reported formally and publicly to the parliament.

Under the Water Act, I am advised, the Basin Plan itself is a disallowable instrument, and parliament will have the opportunity by that means to consider the precise elements of the SDL adjustment mechanism that will be written into the Basin Plan.

The current version of the Basin Plan includes an adjustment mechanism in accordance with the current act. As the legislation currently stands parliament would not be notified of any adjustments, as well as these adjustments not being disallowable. This bill improves transparency while maintaining the position that amendments would not be disallowable.

The Water Act requires that the Basin Plan include an SDL for the water resources of the Murray-Darling Basin. This bill allows the authority to make adjustments to the SDL in accordance with the provisions of the plan. The adjusted SDL must continue to reflect an environmentally sustainable level of take, which is defined in the Water Act to include several elements.

It is envisaged that criteria to be specified in the Basin Plan will reflect the intention of all basin governments that the mechanism must operate on a no-detriment basis. The adjustments would then not be able to weaken the social, economic or environmental outcomes inherent in the Basin Plan.

Projects that enable environmental water to be used more efficiently, thereby reducing the need to remove additional water from productive use, must achieve equivalent environmental outcomes to those in the Basin Plan. Projects to enable improved environmental outcomes, must maintain or improve the socioeconomic circumstances of basin communities compared with the Basin Plan.

Initiatives to recover more environmental water are likely to focus on things like improving the efficiency of on-farm irrigation or off-farm irrigation water delivery systems. The savings recovered by these initiatives will enable improved environmental outcomes to be achieved without impacting on irrigated production. These projects would be in addition to those already approved or planned to contribute at least 600 gigalitres towards the recovery of the proposed 2,750 gigalitres, through the current Sustainable Rural Water Use and Infrastructure Program.

It is envisaged that governments would consider new investment in additional projects—called efficiency measures—in conjunction with action to address particular constraints in the system, thereby enabling the best use of any additional water recovered for the environment. The government’s intention is that all ‘impact neutral’ water recovered under these efficiency measures can only be credited towards delivering environmental outcomes beyond those envisaged under a 2,750-gigalitre reduction.

The water savings identified through projects—called supply measures—to make environmental watering more efficient, will mean the proposed 2,750-gigalitre recovery volume can be reduced. These proposals will need to achieve equivalent environmental outcomes to those under the 2,750-gigalitre reduction proposed in the plan. An example of a supply project could be installing works on a significant floodplain site to deliver improved environmental outcomes at that site but by using less water.

Projects of the sort that could in the future deliver efficiency or supply measures are already underway in many communities throughout the basin. Some of these I have described above. However, there is always room for innovation. This bill allows for projects like those above that are familiar to communities and industry, as well as for innovative ideas, to be considered. As is standard practice, projects will be put forward by the community, stakeholders, industry and/or governments. Projects will be developed over time and in consultation with funding bodies, and will undergo thorough assessment in the business case stage and also due diligence checks. This means projects will be well understood by the time they are considered and assessed by the Basin Officials Committee and the authority.

The adjustment of the SDL will need to be based on the best available science, involving the use of models and assumptions generally accepted by professional hydrologists and other experts at the time the calculation of any adjustment is made.

The bill allows the authority to determine that criteria set out in the Basin Plan have been met for the purpose of adjusting the SDL after considering advice from the basin governments through the Basin Officials Committee.

This bill provides that an adjustment may be made within a specified variance threshold; a maximum of five per cent of the SDL of basin water resources as a whole, though the variance at individual water resource plan areas or parts of water resource plan areas may be more or less than this.

The bill will allow the Basin Plan to require the adjustments to be reflected in the state water resource plans, including during the generally ten-year accreditation period of these plans. Having these state plans include a mechanism to reflect the outcomes of projects to use less environmental water and recover more water for the environment without impacting on the local economy means that the outcomes of projects will be given effect in water resource plan. The precise mechanism for this would be included in the Basin Plan.

The bill requires minister to table in parliament the notice of adjustment and the amendment. The amendment will be a non-disallowable instrument reflecting its technical nature and the criteria for any adjustments will be included in the plan itself, which I have been advised is a disallowable instrument. In addition to the explanatory statement that accompanies all legislative instruments, the bill requires that a notice be tabled with any amendments. This notice must include detailed information on the changes to the SDL at the water resource plan area level and at the basin wide level, together with an outline of the material on which the authority based its decisions in determining that the criteria in the plan have been met in relation to whether to adjust the SDL and the amount of the adjustment.

In closing, these amendments to the Water Act 2007 will provide a simplified but certain and transparent process for making adjustments to the SDL within the Basin Plan, and enable the potential benefits of these far-reaching reforms to be fully realised.Debate adjourned.