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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
12/11/2008
Water Amendment Bill 2008

CHAIR —I welcome representatives of the National Farmers Federation Water Task Force. Would you like to make a brief opening statement?

Mr Fargher —Yes, I will be brief. First, Laurie Arthur, the chairman of our task force, apologises for not being able to be here today. I am a substitute, for which I apologise, but Mrs Kerr is the expert.

I thank you for the opportunity to attend today. We have provided some written advice for the committee in regard to the amendment bill. We are supporting the amendment bill. There is one issue that I will ask Mrs Kerr to explain. It is the issue around reserves and critical human needs in the bill. We understand that state shares will be protected, but if there is any uncertainty or modification to the state shares, we do believe that clause 50 of the National Water Initiative should apply, which relates to risk assignment, with that risk being borne by government. We feel that will provide certainty to irrigators, which is what they need, and also to the environment. Under the National Water Initiative obviously the environment has that status as well. We want to make a case about that particular policy issue today, if we may.

CHAIR —Thank you, Mr Fargher. Mrs Kerr.

Mrs Kerr —I would like to build on what Mr Fargher has spoken about. With regard to the introduction through the intergovernmental agreement of new policies for critical human needs and for reserves, both carryover and human needs reserves, once the state’s shares are protected there is no guarantee that that protection will flow on to entitlement holders. It is our position to clarify and make sure that that is a policy change of governments and that it is covered by clause 50. Including as an amendment to the bill will remove any area of misconstruing or misunderstanding that that applies or may not apply in the future. What we are after is some certainty now to avoid an argument later.

CHAIR —Thank you. I will go to questions. Senator Heffernan.

Senator HEFFERNAN —I have a couple of quick questions, which are slightly out of context. Mr Fargher, where will you be tomorrow?

Mr Fargher —I believe I will be in Canberra tomorrow?

Senator HEFFERNAN —Is there a reason why you cannot come to the fertiliser inquiry?

CHAIR —Probably because it is Friday.

Senator HEFFERNAN —You have been invited and you have said you are not available.

Mr Fargher —I will do everything I can to make it.

CHAIR —Senator Hurley.

Senator HURLEY —I would like to deal with your recommendation 2 from your submission about reviewing the impacts. My understanding is that there are a couple of reviews built in. Are you not happy with that regime, or how would you want to vary that?

Mrs Kerr —The provisions in the bill and the current act are certainly worthwhile and we do not take anything away from those reviews. What we are suggesting in that particular review is a review of entitlements to see if those new policy changes actually impact on entitlement holders. If that impact occurs then risk assignment is triggered. It is a specific review about the risk assignment and not about the review of the bill, the basin plan or anything to do with that. We certainly support those reviews. It could happen and coincide with those reviews, but just for clarity and conciseness it would be fair to have it as a separate review.

Senator HURLEY —In terms of that risk assignment, is it not true that the issues there are dealt with either in the bills or are provided for by the state government in the case of changes arising from state government policy? Why is it that you feel that is not sufficiently covered as it is in the bills or by the state governments themselves?

Mrs Kerr —As I understand it, the provision of the bill relate to the clause 48 risk assignment, which is the risk borne from climate variability and climate change where irrigators wear the first three per cent and, under the changes and where the states accept it, the federal government will wear the remainder of that change. Clause 50 relates to change of government policy itself. It is a distinct part and, as I understand it, is not provided for in the bill.

Senator HURLEY —My advice is that it is provided for then by state governments. Do you feel that is not sufficiently covered?

Mrs Kerr —These amendments are in federal legislation; they are not in state legislation. Whether or not those amendments are included in relevant state legislation will be up to the relevant jurisdictions. If they are and there are state government policy changes that impact on entitlement holders, then the state government NWI risk sharing should be triggered for clause 50. This is to do with federal government legislation and policy changes that are in federal legislation, not state legislation.

Senator HURLEY —I am still unclear about what specific risks would not be provided for under the existing provisions or by the state government. Where do you see the main danger there?

Mrs Kerr —What has not been clarified in the bill are the detailed provisions about how both the critical human needs at the various tiers and the reserves that will occur. What I am talking about are things like: what are the trigger mechanisms between tier 1 and tier 2, what are the trigger mechanism between tier 2 and tier 3, and when do they move out of that. For example, how does the reserves policy for carryover occur and what happens with the dam spill. There are quite detailed things that will be set in the basin plan that are not provided for in the bill. We are saying that NWI clause 50 might occur and governments might accept that. We are just saying let us remove the uncertainty for irrigators and provide for it in the bill.

Senator HURLEY —Thank you.

CHAIR —Senator Siewert.

Senator SIEWERT —In terms of the changes that we are talking about here, are you concerned about the new policies for critical human needs, or are there other issues that you are concerned about that should be used as triggers under clause 50 as well?

Mrs Kerr —We are specifically talking about new policies. The new policies in the amendment bill are the critical human needs—the tiers 1, 2 and 3—and both the critical human needs and carryover reserves policy. They are new policies and so we are concerned about how that may impact on entitlement holders. The bill and the act before it clearly provide that state shares are enshrined and will not be changed. That does not actually translate at an entitlement holder effect. What we are saying is: let us clarify that and remove the uncertainty. Even though we represent irrigators, and make no apologies for that, quite rightly these changes and the concerns that we have will also apply to the Commonwealth government’s share of water entitlements when those are required. In 10 years time the government is going to be a significant holder of water entitlements, so this is as much protection for environment entitlements as it is for irrigation entitlements.

Senator SIEWERT —The submission we received from the New South Wales Irrigators Council, which was endorsed by the National Irrigators Council, raises the issue of the separation of climate change from new knowledge. If I understand their submission correctly, they are arguing a similar sort of issue. They are commenting on the separation out of climate change and say that the definition of climate change is not new knowledge and they are concerned about the trigger there as well. Have you looked at that angle of the issue? It seems to me that they are arguing a similar sort of issue.

Mrs Kerr —They are different risk assignment clauses. I am aware of their submission and understand where they are coming from. The irrigation sector has had a view for a long period of time that the unfinished business in the NWI is what is ‘climate change’. Do you define the new basin plan, for example, as being ‘climate change’, or is that new policy? They are concerned with how we define what climate change is, when does the risk assignment for that apply, when do we define what ‘new policy’ is and how do we define that. What they are seeking is clarity around those definitions and, because the discussion has not occurred, they view that the amendments in the bill may preclude that discussion from taking place.

Senator SIEWERT —Were you here when Professor Young was outlining it?

Mrs Kerr —I was here for the end of it.

Senator SIEWERT —I go to issues around the independence of the authority. We had discussions when the bill first came in about the issues around the independence of the authority and now, of course, it is changing a bit. What is your opinion in terms of the level of independence for the authority?

Mrs Kerr —The authority is a new regime. It reports to the minister on the basin plan and it has close working relationships with both the new ministerial council and the new basin officials committee. It does have a fair degree or autonomy. There is some clear delineation of what is referred to the minister and what is referred to the basin officials committee and the ministerial council. I think the autonomy of the authority is defined in the act and we do not have any issues with the way it has been provided for in the act.

Senator SIEWERT —What is your opinion about putting some objectives into the act.?

Mrs Kerr —That is tightening up the authorities and being able to take into account the objectives of the act. The amendment is a minor one, but the view of NFF would be that the objectives of the act are the minister’s and the department’s to enforce, and obviously the authority, and that they are bound by what is in the act. I do not have a strong opinion of it.

CHAIR —Senator Fisher.

Senator FISHER —You have suggested a risk assessment under clause 50 of the National Water Initiative to ensure that water access entitlements are not affected by the change in government policy in respect of critical human needs. How will that achieve non-deprivation of those users?

Mrs Kerr —It will not affect those users. What we are saying is that over 100 years if the reliability of an entitlement holder that is currently enjoyed is affected by that particular policy change, then those entitlement holders have a right to have some risk assignment under clause 50 applied. It does not affect the way that the operation occurs. Critical human needs will occur as it is defined in the act. The reserves policies will still occur as defined in the act. What we are saying for existing entitlement holders is that if any individual entitlement holder is affected in a negative way, then that should trigger that clause.

Senator FISHER —How will triggering that clause stop any entitlement holder being immediately impacted negatively?

Mrs Kerr —It will not stop them being impacted. Clause 50 triggers compensation.

Senator FISHER —Money?

Mrs Kerr —Yes.

Senator FISHER —Money does not necessarily buy water today.

Mrs Kerr —No, it does not, but it does provide irrigators with some security that if their entitlements are being affected then compensation is triggered. It also provides some rigour to government decisions and how that occurs.

Senator FISHER —Is NFF saying that it is all right for a city like Adelaide to take water from an irrigator for critical human needs provided that the government pays the irrigator money?

Mrs Kerr —In terms of providing for critical human needs no irrigator will win an argument in saying, ‘A human can’t have water ahead of me.’ They are not going to win that argument.

Senator FISHER —What are NFF’s views of the meaning of the term ‘critical human needs’ in the bill, and in particular the meaning of ‘core human consumption requirements in urban and rural areas’?

Mrs Kerr —Our view is that critical human needs are the needs that are required to address core human drinking water requirements. I know some of the states have reserved critical human needs for particular industries where there would be economic and social impacts.

It leads to the broader question, and I note that you have raised this issue on a number of occasions. It probably brings to the fore the broader question of a shared understanding of what critical human needs is. It is like overallocation. Everybody talks about overallocation and we all have different views about what that might mean, and in this case it is a similar term that probably needs the development of a shared understanding about what that might be.

Senator FISHER —So there is no shared understanding at the moment of the meaning of ‘critical human needs’?

Mrs Kerr —With the way it has been implemented there are different aspects in different states that are probably causing some confusion, and the development of a shared understanding or defining of ‘critical human needs’ might be appropriate.

Senator FISHER —Will the bill achieve that shared understanding?

Mrs Kerr —The basin plan will achieve that.

Senator FISHER —How will it do that?

Mrs Kerr —It will be provided for as part of the definition of what is included in the basin plan, so it will come out. Otherwise my suggestion would be that COAG deals with it. They are dealing with the issue of overallocation, as I understand it, trying to define what overallocation is, along with a number of other terms, and I think ‘critical human needs’ falls into that as well.

Senator FISHER —I have one final question and I will place the rest on notice. You indicated that NFF has views about the meaning of the term ‘critical human needs’. Are those views implemented by the bill?

Mrs Kerr —I do not think that we have a strong view one way or the other, but the bill provides for the ability for that to occur through the development of the basin plan and for us to have input through that process into what that might be.

Senator FISHER —Thank you.

CHAIR —Senator Nash.

Senator NASH —I came in on the end of Senator Siewert, so she may have already asked this. My question is around the issue of climate change not being classified now as new knowledge. Did Senator Siewert already ask you that?

Mrs Kerr —Yes.

Senator NASH —I will go back and read the transcript. Within the bill itself there is the issue of requirement for infrastructure and efficiencies. Do you think there is enough within the bill itself that provides for a legislative requirement for that to happen, given the priority that communities see in that efficiency taking place for the water savings, or would you like to see more defined within the legislation for that to happen?

Mr Fargher —I would need to take Mrs Kerr’s advice on the specifics. I do not think that it has really articulated that issue in the bill itself. We do see that as an issue.

Senator NASH —No, it is not, and that is why I am asking.

Mr Fargher —We do see it as an issue that we are pursuing separately. It is the whole issue of the reconfiguration of irrigation communities, the efficiency, on-farm and through system, as part of the package, along with the buy-back consideration. That is an important issue for us, but we are not taking that up in the context of deliberation on this bill.

Senator NASH —Is it something that should be considered through a legislative capacity, along with things like community impact statements? Is that something we should be leaving aside, or is that something we should be looking at in the context of a legislative requirement?

Mrs Kerr —The bill provides for social and economic impacts. You could say that that could be drawn into that discussion or that assessment.

Mr Fargher —We have not got a specific position on legislating the on-farm or through system efficiency component of the package. We think it is important. We are pursuing it, but we have not taken a position to try to somewhat legislate it as this time.

Senator NASH —Can you give that some consideration over the coming days? I know there is a short time frame before this comes to the Senate, but I would like to ask the NFF to formulate whether or not, as part of your position, that should be included?

Mr Fargher —Sure.

CHAIR —Senator Birmingham.

Senator BIRMINGHAM —I wanted to turn to the issue of how water resources are allocated and how entitlements are issued. This may be stepping out of where we are specifically, but does the NFF have a policy in regard to uniformity or national consistency of licensing arrangements across the basin?

Mrs Kerr —We do not support one type of allocation or one type of entitlement regime. In Australia, irrigative production occurs right across the basin. Historically, it depends on what type of production you are, whether you are a permanent planting or whether you are a rice grower—

Senator BIRMINGHAM —My question was not necessarily for a single national regime, but a uniform, consistent national approach, so a single national licence versus a single national system of licensing which could encapsulate various types of entitlements.

Mrs Kerr —I suppose we would be prepared to look at that, as long as we do not go down the track of having one water product, one entitlement type and one allocation regime. The issue, from a national perspective, is the states have jurisdiction over entitlements and I would say that you would need to go down the track of another IGA to determine that with the states. We do not support one product or one allocation regime. There are very good reasons for the system that we have.

Senator BIRMINGHAM —Thank you.

Senator XENOPHON —You referred to the South Australian private carryover. Has that been covered? Have you been asked about that?

Mrs Kerr —Only in terms of risk assignment.

Senator XENOPHON —Can you elaborate on that?

Mrs Kerr —In terms of our position?

Senator XENOPHON —Yes.

Mrs Kerr —We support the provision for carryover. Our view is that in determining how that will occur—for example, things like what water spills, when the dam spills, how do we determine when reserves start and finish and so on—if there is an impact on other entitlement holders, along with the human needs reserves, then we believe that clause 50 of the NWI should apply. We do not have an objection to the reserve in principle. What we are saying is that, if in setting up that particular reserve there are impacts on other entitlement holders within South Australia or in other states, then NWI clause 50 should apply.

Senator XENOPHON —Thank you.

CHAIR —Senator McGauran.

Senator McGAURAN —I have an interrelated matter. I guess all things to do with the Murray are interrelated. What is the status of the $6 billion allocated for infrastructure funding?

Mrs Kerr —My understanding is that there has been a succession of announcements by the government that were partly to do with election promises and partly to do with the priority projects that are contained within the IGA; those projects are at varying rates of being introduced. I believe that the South Australian pipeline around to the Lower Lakes has already commenced. We are really not aware of where the other states are up to with their priority projects, but my understanding is that about $1 billion only is unallocated out of that pool of money.

Senator McGAURAN —Is there anything towards irrigators?

Mrs Kerr —I believe there are portions that the states have said that, under their priority projects, they are allocating to irrigators. For example, in New South Wales, $600 million has been allocated to on-farm projects. It is our view that the infrastructure program should be accelerated. As Ben said earlier, we need to look through system and on farm. If you look at the drought, currently many irrigation farms are not being utilised. Now is an ideal opportunity for those works to be undertaken, as there could also be some beneficial flow-on impacts to communities where currently contractors who used to do sowing, harvesting or whatever for farmers perhaps could be used to implement these on-farm works. So, with the drought, we think there would be some beneficial impacts to communities if those works were rolled out here and now.

Senator McGAURAN —So it has all just been allocated; nothing has been rolled out.

Mrs Kerr —No.

Senator McGAURAN —Also, in an interrelated matter, could you please make public for the purposes of the Hansard the NFF’s view regarding the purchase of the Toorale Station?

Mr Fargher —We do not have a specific policy on the purchase of a particular station. As people would be well aware, there is a lot of concern about the issue in our community. Our position on these things is that we have supported the water reform agenda; we have supported the government’s reform—we have got some modification of technical detail; we have supported the operation of the market; and, if acquisition is to occur, it will be from willing sellers only. We also want that linked as a strategic package with investment on farm to help farmers do more with less on farm and through system.

It is not as though we have a policy on the specific purchase or otherwise of that particular property. Our concern is focused only on buyback if it is not integrated in a package with on-farm and through-system investment. If it is in such an integrated package and governance reform and other issues—such as metering and monitoring and the acceleration of the National Water Initiative—are happening, farmers and irrigators are happy to engage in the water reform process in this country. If it is being done non-sequentially, then obviously we have a concern.

With our lobbying activities we are saying, ‘Let’s keep it together. Acquisition will be from willing sellers only. Farmers and irrigators need a healthy river too. But, with food shortages and all the challenges that we face in regional Australia, let’s back farmers to do more with less on farm and through system as well.’ We have a record of delivering more with less; we can do more so in the future, but we need the tools to be able to do it. If we can keep those two aspects together, then we will be centrally engaged in the debate. As for the particular issue of Toorale, concern aside, we do not have a particular position on that property.

Senator McGAURAN —Is it your understanding that the authority will be ‘the authority’ to integrate all of that? Alternatively, are those two aspects that I have just raised, the buybacks and the infrastructure funding, separate to the authority in that they have no say and it is over here with the government and the minister?

Mrs Kerr —That is our understanding.

Senator McGAURAN —Well, you have problems—or, sorry, not you but the irrigators have problems.

CHAIR —Senator Fisher, instead of putting your questions on notice, would you like five minutes in which to ask them?

Senator McGAURAN —I am sorry; I have one more question. It is a bit silly for me just to leave it hanging there. My point is: if there are two separate matters, you do not have problems but the irrigators do. Do you believe that the authority ought to come in as the integrating authority for those two projects?

Mr Fargher —As I have said in response to Senator Nash, we do not have a specific issue around legislating a program. We need to get the governance right, we need to get the market working and we need to get efficiency on farm and through system so that farmers can do more with less. Some of that is legislation, some is governance and some is programs. We want to work on all of those issues. We are not trying to or thinking that we can take all of those programs and those sequencing issues under one piece of legislation. That is not our current position.

Mrs Kerr —Can I add a comment here? I think the authority is going to have a significant workload in the next few weeks. They are not only developing a new basin plan and all the things that are required with that—for example, identifying environmental assets in all of the systems and working out what is best needed to protect those assets—but also picking up the current work of the commission. So I think that sufficient resourcing would be required with putting that workload into the authority.

Senator McGAURAN —They should have something to say, though, and be able to intervene.

Senator NASH —Just to follow on from that question: does the NFF, when it actually reads the bill, think the authority as set up is going to have the human and associated resources that it needs to be able to do the job properly?

Mrs Kerr —I think it is a challenge. To get a basin plan within the short period of time in which it is required, with all of the things that are required to be part of it, will be a challenge. Looking at some of the water-sharing plan processes within the states, you will see that they have taken three, four or five years with significant community discussion and significant community trade-off about what they might deliver—and that is just for one catchment. To do it for a whole basin within the time frame is going to be a significant challenge.

Senator NASH —With really only a handful of people and associated resources, I guess.

Mrs Kerr —We would hope that the government would resource the authority sufficiently to do that.

CHAIR —Senator Fisher, you wish to ask some questions, but you do not expect them to be answered now; they will be on notice.

Senator FISHER —I do not expect these questions to be answered today; I am happy for them to be taken on notice. At the risk of sounding like a human cracked record, I am afraid that my questions do centre around the human critical needs provisions. In respect of what would be section 86A(1)(a), what are NFF’s views as to the meaning of ‘highest priority’ and, in 86A(1)(b), ‘first priority’? What are NFF’s views as to the meaning of ‘communities who are dependent on basin water resources’ in 86A(1)(a)?

Moving now to 86A(2), what are NFF’s views as to the meaning of ‘that can only reasonably be provided from basin water resources’? Further, with respect to section 86A(2)(a), what are NFF’s views as to the meaning of ‘core human consumption requirements in urban and rural areas’ and, secondly, in what would be subsection (2)(b), those ‘nonhuman consumption requirements that a failure to meet would cause prohibitively high social, economic or national security costs’? For example, in respect of section 86A(2)(a), I include ‘core human consumption requirements’. Would Melbourne’s needs come under such a description; and, if so, of what sort? Ms Kerr, you have referred to drinking water. What about laundry water or water for washing my car? Should Adelaide come under such a definition?

Finally, the bill contemplates that amounts of water would be specified for critical human needs. But, in NFF’s view, who will make the final decisions about how water is allocated for critical human needs and who will and should have input into those decisions? Thank you.

Senator WILLIAMS —I have just one question. Mr Fargher, does the NFF hold a position on the establishment of carbon sinks and MISs in the basin?

Mr Fargher —We have done some work on carbon sinks and MISs; we have put in a submission. For some time there has been and still is a debate amongst our membership about MISs; it is quite a controversial issue for us.

Senator WILLIAMS —It is, yes.

CHAIR —Although at the moment we are not exploring it.

Mr Fargher —I am happy to talk with you about it at any time. We have got someone who has actually done some work on it and I am happy to make those resources available at any time. I am happy also to explain at any time the debate that our membership is having about it, including the sensitivity of that debate.

CHAIR —Would you be happy to just tell Senator Williams whether it is a problem in the Murray-Darling? I am sorry; it is just that you know we have been down this path—

Mr Fargher —Yes. The MISs that are in the Murray-Darling—

Senator WILLIAMS —Does the NFF have an opinion about their establishment and the establishment of further MISs and carbon sinks in the Murray-Darling Basin?

Mr Fargher —Yes. We have put in a submission. We have a concern about MIS where it is distortionary.

Senator WILLIAMS —Could you expand on your concern?

Mr Fargher —It is just if it causes distortions for local communities and local landholders.

CHAIR —But we are talking about the Murray-Darling Basin.

Mr Fargher —I guess it is, if it were an irrigation property. We are not opposing investment in agriculture at all. We just have a problem if the vehicle being used is distortionary. But, as I say, it is—

CHAIR —We are not going to open up a previous inquiry; thank you. Senator Williams, does that answer your question?

Senator HEFFERNAN —Can I ask a question?

CHAIR —If it is on carbon sinks, I am going to advise you, Senator Heffernan—

Senator WILLIAMS —No, we are talking about the Murray-Darling Basin, Chair.

Senator SIEWERT —The water that is being used for trees planted under MIS is different from the carbon sinks inquiry.

CHAIR —Excuse me. Before we go any further, I have no problem in connection with the Murray-Darling, like Senator Williams, but I know that I have one problem coming from my left; I have this feeling that it will be far reaching. I appreciate your assistance, Senator Siewert, on that. Senator Williams, are you happy with that answer?

Senator WILLIAMS —I am fine.

CHAIR —Senator Heffernan.

Senator HEFFERNAN —There are 23,000-odd gigalitres of run-off and in the future, given the science prediction, we are going to lose somewhere between 3,500 and 11,000 gigalitres. Against that, if it is true—we had 12,000 gigalitres of available run-off last year—with the likes of the 75 gigalitres to Melbourne, which is high-priority water, have you blokes thought through the landscape in the Murray-Darling Basin with the science that has been predicted for the future? Have you thought about that in connection with the decline in run-off and the impact that that high-security water—which Senator Mary Jo Fisher keeps talking about—would have on the disproportionate return of water that has to go to the system for the freight component of the river? What is going to happen eventually if we keep sneaking bits out of the river and not accounting for the forest interception, which we have not accounted for and do not have to account for by way of a return with a licence? By the way, that interception is in the government’s buyback documents and perhaps we should be putting an imposition on the forest planning for a licence; let us account for taking water out of the system by way of a licence. Have you blokes given consideration to all of that?

What I am faced with in my own mind, having filled it with all these figures over the years, is that at the end of the day we still might end up with a custard-pie arrangement in the Murray-Darling Basin if we do not bring to account some of these things. The science says that the pattern of run-off over the last three years—

CHAIR —I will ask you to come to a question, Senator Heffernan.

Senator HEFFERNAN —could be the way it is going to be in the future. In the Murray, last year we had 1,200 gigalitres and this year we had 1,700 gigalitres. If that is the case, this 75-gigalitre slug to Melbourne will be critical. We just cannot say, ‘Well, we’re going to’—

CHAIR —Senator Heffernan, is there a question?

Senator HEFFERNAN —Have you blokes figured all that?

CHAIR —We could have cut two minutes out of that.

Mrs Kerr —Do you have half an hour, Senator Heffernan? We have not done any detailed work on that.

Senator HEFFERNAN —That is the answer.

CHAIR —I think Senator Heffernan is happy with the answer; that is fine. Senator Nash.

Senator NASH —You may have covered this already too. I think the carryovers in New South Wales and in Victoria are both capped at 100 per cent and South Australia is not. I am sorry, but did you cover that when I was out of the room?

Mrs Kerr —In the states, carryover is not capped at 100 per cent. For carryover, there are contingency planning arrangements that are different from the normal arrangements. As part of drought and risk management for drought for irrigation farmers, the states have allowed some leeway for irrigators to carry over more than what their normal policy position is. I will talk about what is normal. Normally, South Australia and Victoria do not have carryover, nor does New South Wales with high-security entitlements. The reason is that most of those entitlements are high-security entitlements and in 98 per cent of years they will get 100 per cent delivered. The entitlements that do have carryover are the New South Wales general security entitlements. The New South Wales Murray is normally capped at 50 per cent, so you can only carry up to 50 per cent of your entitlement over into the following year. Normally, in the Murrumbidgee Valley, it is 15 per cent; during drought, they have relaxed those arrangements to 35 per cent.

Senator NASH —What are the arrangements in South Australia?

Mrs Kerr —There are none. That is because they have a high-security entitlement.

Senator NASH —Has the NFF done any work on the effect that the decreasing run-off that Senator Heffernan was talking about before and changed farming practices to minimum till and zero till are having on run-off?

Mrs Kerr —No, we have not done any work in that area, although the top 20 to 25 per cent of farmers—it is mainly a dry land situation that uses those forms of farming—have been done that for 20 or 30 years anyway. The bottom 20 or 25 per cent may not be doing it and the middle group might be doing a mixture of it or some other arrangement. We have not done any investigation of whether there is an effect on run-off there.

CHAIR —Thank you very much.

[5.00 pm]