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STANDING COMMITTEE ON REGIONAL AUSTRALIA
21/01/2011
Impact of the Murray-Darling Basin Plan on regional Australia

CHAIR —Welcome. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. We have received a written submission from your group. Do you wish to present additional material or would you like to just make an opening statement and then be subjected to questions?

Ms Rivers —We can make an opening statement. Thank you very much for inviting us to speak today. We are appearing on behalf of the Australian Network of Environmental Defender’s Offices, which is a network of nine not-for-profit community legal centres specialising in public interest environmental law and policy. There is an EDO in every state and territory around Australia.

We have been involved in the Water Act since its inception, primarily advising environment groups on the development of the bill and the act through to now, with the development of the guide to the plan. We have spent quite a lot of time considering the act and its implications and the detail of the legislation. Our particular expertise is in legal issues, so we will limit our comments today to law and legal policy. The submission that we sent to you is a copy of our submission to the Murray-Darling Basin Authority and we hope that it will assist the committee in considering some of the legal issues. I will briefly highlight three points from the submission which relate to the terms of reference and which might be of particular interest to this committee.

As you would know, there is considerable confusion amongst stakeholders about how the act treats environmental, social and economic considerations. The act is complicated at times, but that is really because water resource management is a very complicated area. The state water acts are also very complicated pieces of legislation. But, when you look at the act as a whole, it is clear that the principal aim of the act and the Basin Plan is to reduce extraction levels to environmentally sustainable levels. This is not just to support the ecosystems that rely on the basin but to support continued human use of those resources as well, and that is quite clear from the act. In achieving that aim, the Murray-Darling Basin Authority and the minister must try to optimise environmental, social and economic considerations.

First of all, the authority has to work out what is an environmentally sustainable level of extraction and then it can use social and economic considerations to determine how best to achieve those. It is not as simple as saying that you have to put the environment first, as some people have said. That is really an oversimplification of what the act requires. It is also not about balancing environmental, social and economic considerations and trying to give everything equal weighting. It is really about having a starting point to consider what is an environmentally sustainable level of extraction for the basin so that we do not degrade the ecosystems that rely on it, so that we do not degrade its productive base and so that we can have continued human use of the basin.

This way of looking at the act is consistent with the advice that the Australian Government Solicitor has been giving to the Murray-Darling Basin Authority for the last couple of years. It is generally consistent with the way the authority is carrying out its functions through the guide. It is also consistent with the advice from the Australian Government Solicitor to the water minister, Minister Burke.

Social and economic considerations are also included in other parts of the act and there are very important parts of the act—for example, the phase-in time for states to comply with the Basin Plan through transitional water resource plans and interim water resource plans—specifically aimed at minimising any negative social and economic impacts. As an example, it is up to 2019 in Victoria to implement those. Similarly, the ability for the authority to include a temporary diversion limit in the plan, which would allow extraction over and above the SDL for an additional five years, is stated in the act specifically to look at minimising social and economic impacts. It should also be noted that the government is not limited by the act in this regard; it can implement any number of plans to assist the transition and to minimise any negative social and economic impacts as well. The authority in some senses is bound by the act, but the government can implement parallel processes to do that.

The last point I want to make is that the Murray-Darling Basin Authority and others have largely focused on the negative social and economic impacts from reducing water extraction and in some cases have failed to fully consider the positive social and economic impacts in their decision making. There seems to be an assumption that economic and social outcomes from setting sustainable diversion limits will be negative, but that is not actually in the act—that assumption does not come from the legislation. The decisions made under the act really need to consider the positive outcomes of sustainable extraction as well as the costs of no action and also, if the lower end of the sustainable diversion limits were chosen, the cost of having a low level of reduction in extraction. Those things are required under the act as well. Thank you.

CHAIR —Thank you. Mr Gibbons.

Mr GIBBONS —So far we have had people giving evidence and providing advice to the committee about a substantial amount of bureaucratic red tape that actually inhibits the potential for the Murray-Darling Basin achieving the objectives we all want. Some say that if we could have a magic wand that could legislatively change a lot of the differences between water authorities, local government and state and Commonwealth government regulations we could achieve everything we need to achieve. You said you are a lawyer and you have been studying the act. Could you give us some examples of where legislative impediments, which were probably put in place for a good reason historically, now need to be changed so we can achieve our objectives?

Ms Rivers —I am not exactly sure which legislative impediments you are referring to.

Mr GIBBONS —For example, there is a rule in New South Wales that if there is a surplus amount of water generated by the Menindee Lakes system it becomes the property of the New South Wales government but it cannot be used in Victoria. Victoria might be crying out for additional water and New South Wales may have surplus water but there is a legislative impediment under the New South Wales act to having some of that water going to Victoria. That was what was presented to us a couple of weeks ago. I understand there are a range other impediments in place historically that prevent us from achieving our objectives.

Ms Rivers —As I said, water resource management a very complicated area. It is in all states and it is in all countries. Obviously our federated system makes it even more difficult. The long process that the states and the Commonwealth have been going through, through the NWI, is designed to try and reduce some of those impediments, and has done so over time. I think it is a process that needs to continue. There is nothing specifically in, for example, the Commonwealth Water Act that you could do to magically remove those impediments. It is a case of the states continuing along that reform process.

Mr Sydes —There are two points. One is that we have a federal system of government and a Constitution that sets up different levels of government—the states and so forth. You could probably not have dreamt of a more complicated way of setting up a system of governance with respect to be Murray-Darling Basin than having a Murray River in New South Wales, most of the water in that coming from Victoria, and South Australia being highly dependent on it. It is a recipe for constitutional conflict, and that is what happens. That is probably a little bit bigger than the legislative impediment type of issue that you were drawing attention to.

I think it is not so much a legislative impediment as a capacity issue. One of the things I think is critical and needs to be paid some attention to is the institutional capacity of state based authorities like CMAs in Victoria to actually deliver on the Basin Plan once it is introduced. The Commonwealth Water Act is not a Commonwealth takeover of water resources in the Murray-Darling Basin; it is a new layer on top of existing state based arrangements. The capacity of those existing state based arrangements to deliver on the Basin Plan is critical. One thing that has not received enough attention, certainly in Victoria and I presume in other states, is the capacity of those state based institutions to actually deliver on the Basin Plan and the requirements under it.

Mr GIBBONS —Thanks

ACTING CHAIR (Ms Ley) —Any questions from this end of the table? Mr McCormack?

Mr McCORMACK —No, I am fine, thank you.

ACTING CHAIR —Dr Stone?

Dr STONE —You are Victorian environmental defenders, obviously, and thank you for your information. Have you been engaged in or can you give us your opinions on the fact that during the time when the Goulburn River was defined by the CSIRO as the most degraded tributary to the Murray we had pipelines being built to take water out of basin for Melbourne and Geelong and Ballarat. Were you involved in representing the needs of the basin when those pipelines were under consideration and then subsequently built? As you know, the pipeline to Melbourne and Geelong is halted at this point. What are your views about removing water out of the basin from clearly highly stressed tributaries like the Goulburn in relation to this plan that we have got to develop and make sure all environmental flows go where they need to be?

Mr Sydes —We have represented and continue to represent various people who have been involved in those sorts of exercises. Part of our mission is to ensure that members of the public, regional and community groups and so forth can effectively engage in things like environmental impact assessment processes. We were involved in that capacity with the north-south pipeline and various other water infrastructure projects around Victoria, like the desalination plant. We do not have any particular position on the second part of your question in terms of the desirability or otherwise of water extraction going to cities.

Dr STONE —So you do not have an opinion as an agency, you just facilitate others if they need to take up legal cases?

Mr Sydes —I do not know that it is entirely true that we do not have an opinion and we do not come from anywhere, but we have not developed a position with respect to that particular issue.

Dr STONE —You have not?

Mr Sydes —No.

ACTING CHAIR —Brendan, you were talking about the institutional arrangements between the states and that perhaps not a lot has been examined in that respect. If the authority and then the government comes up with a plan which is quite dramatic in its implications, do you think the states are able to simply say, ‘We don’t like that,’ turn their backs on it and step away without any constitutional or legal implications?

Mr Sydes —No.

ACTING CHAIR —Can you talk about what they might be?

Mr Sydes —The act makes the plan mandatory and requires it to be implemented. That was made very clear in the development of the act and the consideration of the bill before the Senate committee at the time. It is in effect an offence and contrary to the act to not implement it, so there are various legal measures that could be taken if that sort of situation arose. I do not think it would, but there are those things in the locker, I suppose, if the need arose.

ACTING CHAIR —If, for example, the water sharing plan kicks in in Victoria in 2019, five years later than it does in New South Wales, do you think that New South Wales would have a problem legally—I am not asking you to comment on how the government would view this—if they said, ‘It’s not reasonable for it to start in 2019 in Victoria and five years earlier for us, so we’re just going to delay our water sharing plan implementation five years’? Could they do that?

Mr Sydes —Not under the act.

Ms Rivers —There is provision under the act for the Commonwealth to make a water sharing plan on behalf of a state if the state refuses to do it. There are steps beforehand to try and avoid that from happening—they are legislated in the act. But if a state does refuse there is a process for the Commonwealth to do it on behalf of the state and it would become binding.

ACTING CHAIR —Are you saying that the Commonwealth has the power to actually step into the shoes of a state and implement a water sharing agreement?

Mr Sydes —The authority under the act has definite powers, as Nicola has just outlined. The act itself is based on constitutional powers that the Commonwealth has, together with subsequently a referral of powers by the states, so clearly there is a constitutional basis of those and other mechanisms that effectively make the Basin Plan something that has to be implemented at a state based level.

ACTING CHAIR —At that point is there any ability of states to feed back through the Commonwealth process that they do not like what is being proposed and they would like a second look at an aspect of it? There is that ability for the Commonwealth minister to be able to sat to the authority, ‘I’m not sure about this—go back and do some more work.’ Do the state ministers have any power like that?

Ms Rivers —Do you mean in the development of the actual Basin Plan?

ACTING CHAIR —Yes. If it is at the point where it is about to be implemented and the states are not happy with what is described, what could they do?

Ms Rivers —Yes, there is a process in the act when the Basin Plan is being developed. It has to be referred to state ministers and they can advise on any of the aspects, but their advice back to the Commonwealth is not binding. So the Commonwealth minister can direct the authority to make amendments to the plan but the state ministers can only have input—they are not able to make binding comment on the authority.

ACTING CHAIR —So the Commonwealth minister could at that point override what the state ministers say, override the state water-sharing plans and implement what comes from the authorities?

Ms Rivers —The process to develop a state water resource plan on behalf of a state is really set out in the act to be very much a last resort. There are a lot of procedures that have to be gone through first. It is really just if it is absolutely not happening. There are a lot of legislative requirements that the Commonwealth would have to meet before it tried to implement that process. In terms of the Basin Plan itself, yes, the Commonwealth minister essentially has the final say on the majority of the plan. There are some parts of the plan that the minister cannot make changes to, but for the majority of the plan the federal minister can do that.

Mr SECKER —The federal minister?

Ms Rivers —The federal minister.

Dr STONE —I notice that on page 3 of your submission you say:

The Guide has undertaken extensive research … but has failed to incorporate scientific findings into policy decisions underpinning the Guide.

From my comments earlier, you will see that I actually agree with you on that, but can you tell us which scientific findings in particular you feel most needed to have been used? Where were you focusing when you made that statement that scientific findings were not used and do not underpin the guide?

Ms Rivers —The parts in our submission that relate to the scientific aspects were actually drafted by scientific officers who work at EDO New South Wales, and unfortunately they could not attend. So I cannot really comment on the scientific parts of this submission, but we are happy to take the question on notice.

Dr STONE  —That would be helpful.

Ms Rivers —That is fine. It is outlined a bit more in the submission as well.

CHAIR —I was out of the room a little bit while you were talking about the legal implications in the relationship between the authority and the act and the states—the issues that Sussan was raising. Would you be able to give us some additional information in relation to your interpretation of those relationships? I think we understand that it is not the direct intent immediately of anybody to proceed down that way, but it is interesting to have a legal perspective, in layman’s terms, of just what can occur in a legal sense if push comes to shove.

Dr STONE —Particularly about the ability of New South Wales to extend or not extend the implementation of its water-sharing plans to match Victoria. Who would have to agree to that for that to happen?

Ms Rivers —In the development of the plan there is an extensive process, a legislative process, to involve the states, and there are very specific requirements of what the authority and the Commonwealth have to do to involve the states in that. That is set out. As I mentioned before, the final say essentially, for the majority of the plan, is with the federal water minister. He can override some of the parts in the plan that the authority may have underdeveloped. When it comes to implementing the actual state water resource plans, it is very much expected in the act that the states are supposed to do that and will do that and will do it by a certain time frame. Any existing water-sharing plans or water resource plans in the states can continue to exist until a date that has already been set for each of the states. In most cases, that date is set out in the legislation for each particular water resource area. In New South Wales it is mainly 2014. There is some 2015 for Queensland and 2019, for example, for Victoria.

But certainly the legal expectation in the act is that the states will develop those. If the states fail to develop those, there is a negotiation process that the Commonwealth has to go through with the state that has not done a water resource plan to try and encourage or assist the state to do that. As a last resort, there is the ability for the Commonwealth to make a water resource plan on behalf of the state. Once they do and once that is properly made, it will become legally binding on that state. But it is a last resort. It is not something that the Commonwealth would do lightly or easily. It is not something that is easily done in the act but it is a possibility and it will come into force at that time.

In relation to changing the dates that each state has to start complying with the Basin Plan, they are in the legislation for all states apart from Victoria. That was negotiated later. So all states have those dates set in the legislation. It would be a Commonwealth amendment to legislation to change those dates—so renegotiation between the state and the Commonwealth and then you would have to amend the act. My understanding is that in relation to Victoria that date is going to be put in regulations. As far as I am aware, it is not in regulations at the moment.

CHAIR —As there are no further questions, we thank you very much for coming today and for your submission. If you could respond to that question on notice, that would be appreciated. There will be a transcript that you will receive. If you have any issues with the transcription, please let us know. Please also let us know any other information that you might have about the questions that have been raised today. There might be things that you think of that are pertinent to the debate. Thank you.

Proceedings suspended from 10.15 am to 10.35 am