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Tuesday, 5 February 2013
Page: 95

Senator McKENZIE (Victoria) (17:52): I rise after the Nationals' deputy leader in the Senate, Senator Nash, who has given an excellent contribution on this particular piece of legislation, the Water Amendment (Water for the Environment Special Account) Bill 2012. Our Constitution puts water squarely in the domain of the states, and without the basin states signing up for these amendments to the Water Act there would be little point in proceeding.

The Murray River is said to be the only river in the world that has its own flag; in fact, it has two. The Upper and Lower Murray flags have been flown since 1853 to represent the Murray River as it flows through Victoria and down into South Australia, with four stripes to represent the four rivers in the system. Murray River communities are proud people with a long history of contribution to our nation and strong industries. So too, the Nationals have a strong tradition of standing up for those communities and the industries within them. In my home state, $1.8 billion of irrigated agricultural produce is grown in the Murray River districts. Forty-two per cent of the value of all of the Murray-Darling Basin's agricultural production actually comes from Victoria, so we have a big stake in what actually happens around concerns with the Murray-Darling Basin.

On water, the environmental credentials of the coalition are clear: the Nationals' leader and Deputy Prime Minister, John Anderson, started water reform in the modern political era through the introduction of the National Water Initiative in 2003—113 years after Federation—and here we are. It is a complex and difficult issue that we have been struggling with as a nation for a long time. But the Nationals and the coalition have continued to work to get the balance right and, as a member of the Senate's Environment and Communications Committee, who conducted an inquiry into this bill in late 2012—and it was an extremely brief inquiry on such an important issue, especially the component concerning this particular bill—I would like to thank those key stakeholders who scrambled to participate in providing essential commentary around this particular bill before us today: industry and community members, who have been forensic in the detail of the impact of any Murray-Darling Basin Plan from the first draft and who know the detail even if the government does not.

The approach outlined in this bill facilitates a potential of 450 gigalitres of water to be hopefully returned to the environment by measures excluding water buybacks, which have been so detrimental to our rural communities—a fact that has been reiterated continually by producers and by communities throughout the Murray-Darling Basin Plan debate over many years. However, the bill before us today does not make it legally binding for the government to recover water in a way that does not adversely impact irrigation communities—even though the EM implies that it should—and I guess our request is that we make our intent clear.

Since the Water Act was passed in 2007, most of Labor's activities have been lazily centred on the buyback of irrigation water. Mark McKenzie from the Murray Valley Winegrowers association gave us evidence through the inquiry into this particular bill around the impact and the amount of water that has been taken out of irrigation communities. Merbein pumped district in Sunraysia is 42 per cent de-watered, and 36 per cent of Red Cliffs pumped district is de-watered. Not all of this de-watering can be attributed to buyback, but a fair majority can. Fourteen years of drought and the entry of urban populations into the water market—such as Adelaide, Bendigo and Ballarat—have had an impact. In this part of the world, the high price of temporary water, drought and low commodity prices have all contributed to the creation of willing sellers for Labor's devastating buyback program.

If we look elsewhere in Victoria, the impacts have been even worse. The Pyramid Hill district lost over 50 per cent of its original high-security entitlement in less than a decade. Goulburn-Murray Water, in its submission to the previous version of the Basin Plan, predicted its original 1,600 gigalitres of high-security water would fall to less than 800 under a path of unrelenting buybacks that Labor was on.

The government is well aware—and has itself acknowledged—that water buybacks are not the solution. A healthy river with healthy river communities is not created through the expenditure of vast sums of government money on purchasing water from struggling farmers and ripping it out of local communities. Numerous submitters to the inquiry, such as the NFF and the Murray Valley Winegrowers, expressed concern that this bill—particularly in proposed section 86AD(2)(b)—still appears to allow for further buybacks, in contrast to the minister's assurance. This is a concern that the Nationals share.

The socioeconomic issues go to the heart of my concerns with the Murray-Darling Basin Plan and the particular piece of legislation before us today. During the recent inquiry we heard a lot about socioeconomic issues that concern the communities of the Murray-Darling Basin. The National Irrigators Council said:

… there is nothing in the Bill which specifically guarantees the 'upward movement'—

of an amount of water to be removed from communities—

will not cause social and economic downsides …

The Victorian Farmers Federation further said:

… government is of the belief that simply providing money towards socio-economic issues which arise will solve them. This is simply not the case.

I would argue that throwing money at a problem once you have created it is the wrong way to govern. Let's plan appropriately so as not to cause detrimental effects when we are legislating in the first place. The coalition has foreshadowed amendments that will enshrine a no-detriments test for socioeconomic impacts of water removal from rural communities.

In the last several years, I have seen the Commonwealth active in the water market firsthand. I have seen the evidence of what less water means for rural communities and I do not need contentious macro-socioeconomic modelling to incorrectly remove water from our communities and to not understand that it does not have a detrimental effect. The reality is that , as I visit Shepparton, I see empty shops. When I read the newspaper, I read how water-based industry factories are closing, and the Heinz Girgarre tomato plant and Leitchville cheese are but a few. These involve real people with families and people that are part of communities, who go to schools, who are volunteer firemen and women, who are artists and netballers—all of whom add social capital to the country. These people exist because their jobs are linked directly or indirectly to the use of water to produce primary product. Victoria has contributed the greatest share of high-security water to the buyback. There is also greater exposure to public and private flood than in any other state.

Lastly, the non-strategic buyback of water has produced deep waterholes in our irrigation districts, such as the Swiss cheese effect, and we heard that continually from the first iteration of the Murray-Darling Basin Plan. I was at the public consultation in Swan Hill when Craig Knowles, Chair of the Murray-Darling Basin Authority, acknowledged that of water buybacks when he said:

I agree with the statement made that 'If we take 30% of your water out of this community it will have damaging, severe devastating effects.' I agree with that and I want to put that on the record right now.

So Craig Knowles recognises it, feels our pain, understands, and then proceeds the legislation before us today to not make it quite clear that that is not going to be part of the final solution.

The very next day northern Victoria's communities read in the paper, after he made those statements, that the MDBA had again entered the water market in the southern basin. The anger at the news that the MDBA was in the water market again was palpable amongst our irrigation communities. Trust is the issue here. A lack of understanding and compassion is also of concern, but trust is the issue. With some parts of the basin having lost near or over 30 per cent of their water already, isn't it time that we say enough to mitigate those damaging, severe, devastating effects as described by Craig Knowles?

The government have the opportunity to reflect that understanding today in legislation, to put that into words. Once again they have failed to heed regional Australia's concern, bowing to the Greens, as evidenced by deleting 'up to' from the bill, making that a minimum rather than a maximum, getting rid of that flexibility. There is a lack of detail within this debate not only of the impact of removing the water but also of how much water is being purchased and from where. We do not know that local detail and yet we are very happy to prescribe an amount of money and we are very happy to prescribe a minimum volume required for the environment. Again, it goes to trust.

In October 2012 the Commonwealth Environmental Water Holder was asked to identify how much water was purchased from individual irrigation districts rather than just from catchments, which may contain many irrigation districts. They responded, stating that they could not provide the information because they did not know. They said:

The Government does not know in which community it has purchased $2 billion of water buybacks.

I will repeat that: this government does not know from what communities it has purchased the water and, more specifically, this government cannot tell us how much water has been purchased from towns like Shepparton, Victoria's fruit bowl, or Tatura, the centre of Victoria's and the nation's milk-exporting industry.

How can they assess the impact if they do not know how much water they have purchased? How can we believe the government have strategically purchased water if they do not know where they have purchased it from, leaving irrigation districts like a piece of Swiss cheese struggling for viability? That is why we have been so adamant in wanting to ensure that buybacks are not part of the permanent solution in addressing the concerns of the environment and the Murray-Darling Basin's sustainability going forward. The government has done an atrocious job at implementing water buybacks. I hate to think that there is anybody here who can be under any illusions about the devastating effects of the government's buybacks program after hearing the evidence from the inquiry and over time and from the Rural and Regional Affairs and Transport References Committee, chaired by Senator Heffernan.

I note the unusual step taken in this bill to appropriate funds so far in advance—however, given the government's track record in this regard, I probably should not be surprised. I am particularly concerned with what appears to be a lack of work done to justify the amounts being appropriated and their adequacy to meet the stated objectives of this bill. I am glad Senator Hanson-Young is in the chamber because I am particularly interested in her faux outrage in her contribution to this bill before us today. She is very concerned that Australian taxpayers are not having their precious money frittered away—if only the Greens were as dedicated to austerity right across their portfolios and in negotiations with their coalition partners, Labor. However, I am concerned that that is probably less about Senator Hanson-Young's concern about the precious money of taxpayers being frittered away and more about suburban Adelaide votes.

The bill is promoted as seeking to generate an additional 450 gigalitres of water with minimal socioeconomic impact by heavily investing in on-farm efficiency grants. The reality is somewhat different, however. The cynical amongst us would say this was an on-the-fly constructed pot of $1.77 billion worth of gold designed to appease a recalcitrant South Australian Labor premier. What did the South Australian Premier do after he received this? He removed half of South Australia's share of the funding contributions for river operations, maintenance and natural resource programs in the basin.

Again, there is no prescription in the bill before us for a specified amount of money to be spent on system constraint relaxation. What needs to be changed? How much? What will be the effect of this amount of water going through the system? I am concerned about the costs associated with addressing the constraints within the system that would require the removal under a 3,200-gigalitre scenario which is favoured by the Greens. I am sure we will be hearing all about it later as those amendments come forward. I hope Senator Hanson-Young's newly found austerity will share my concerns in terms of getting the detail around how that money was constructed.

I want to know how a figure of $200 million for constraint removal was identified, and the ramifications. Is this funding pool sufficient to remove all constraints necessary? What compensation may be forthcoming to those potentially affected by constraint removal? This is a particular concern for those in the upper catchment in Victoria and was expressed very clearly by Jan Beer and Ken Pattison in their contribution to the Senate inquiry into the bill. Similarly, Mr Anderson from the Victorian Farmers Federation said during the inquiry:

If you go to the Goulburn Broken Catchment Management Authority and look at their Lower Goulburn floodplain risk assessment, it is a nonsense to say that you can put 40,000 megalitres a day past McCoys Bridge without causing serious flooding of not only public property but also private property.

The Goulburn Broken Catchment Management Authority's environmental flow hydraulics study says that if you had that much water at McCoys Bridge you would flood, and it has been quoted by so many people—the Minister for Water in Victoria, Mr Walsh, and Dr Stone in the other place—you would flood 100 buildings, 250 kilometres of road, 8,000 hectares of dryland agriculture and 1,000 hectares of irrigated agriculture. That is what would happen in real life to real people.

During the inquiry, the National Farmers' Federation and the Murray-Darling Basin Authority also acknowledged the difficulties in addressing this particular problem. There still exists ambiguity around the legal liability for those said flooding events and the effect that they could have on public-private environmental assets, the caravan parks, the river red gums and the national assets.

In Victoria, $30 million was spent on the Basin Plan's consultation roadshow. Incredibly, there was no public meeting in the upper catchment towns where these issues could occur. The Eildon, Hume and Dartmouth dams are also located amongst these communities. The people most at risk from increasing river flows have been forgotten by this Labor government. This issue is why the shadow minister for water and Nationals Leader in the Senate, Barnaby Joyce, has foreshadowed amendments to the bill in order to make clear that the additional water will be sought through investment in infrastructure upgrades and ensuring any buybacks do not cause detriment to regional communities. This means we have explicitly written into the bill assurances that buybacks will not ultimately be the main feature of the Murray-Darling Basin Plan's implementation in Victoria or elsewhere. Our amendments to the bill will go some way towards basin communities in restoring and enhancing trust with the process, politicians and bureaucracies. As Mark McKenzie from the Murray Valley Winegrowers' association said:

We are being asked to take a lot of this on trust. Although we believe that, ultimately, we are getting there, I have to say that my community members are a bit light on for trust at the moment.

I am pretty sure it is not just this particular issue that regional communities are light on trust with in this particular government. I will not go into discussing that more at this point.

Trust in the basin communities has been lost through Labor's heavy-handed treatment of basin communities and there is still a lot of anxiety and uncertainty out there, as Senator Nash referred to. These are people with businesses and families and you cannot plan ahead for the future. Farming is not a short-term prospect—it is a long-term project. It is generations investing and growing the productivity of their land.

Senator Heffernan: It is a great place to raise a family but a bugger of a place to make a quid.

Senator McKENZIE: There we go. Great contribution, Senator Heffernan, it is a great place to raise a family and difficult to make a quid, and in making sure that regional communities can still make a quid they will be making more of it as long as they have water within them.

The Nationals and the coalition seek to ensure that our amendment legislates our commitments and the very real concerns that we hear on a daily basis and that the minister and Craig Knowles, if they had been serious, would admit they heard every day in every consultation that they went to. They stood up in front of those communities, they went to the public consultations, they went to the private little chitchats and they absorbed the pain; they heard the detail. The amount of man- and woman-hours that have gone into trying to get this right, trying to get the balance right between the environment and the healthy river system and viable and productive regional communities is enormous. I look forward to the research project that quantifies it. That is why our amendments will go towards making a bad situation a little better, because they need to plan for the future, to grow the food and their families in a healthy environment. The coalition is interested in not only protecting our food bowl but also in starting to build trust which has been consumed by political process in the development of the Basin Plan.

I urge the Senate, and especially the Greens, to take a similar approach. I hope the debate and final vote will reflect the statements and expressions of concern, the hours of meetings and consultations that have gone into this legislation and the plan around it, that our action will stop devastating, market-distorting water buybacks that not only waste taxpayers' money but also devastate the productive capacity of regional communities. It is not perfect, and I recognise that, but we are 113 years down the track and we have to have a sustainable environment, but more importantly what we on this side of the chamber recognise is that we also have to have sustainable communities.

I hope that our debate will ensure investment in our regions with infrastructure projects that will ensure a vibrant and vigorous future for our regional communities and the environment.