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STANDING COMMITTEE ON REGIONAL AUSTRALIA
23/03/2011
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 the proceedings of the respective houses. We have received a submission from you. Is there any additional material you would like the committee to have, or would you just like to make some opening statements and then be subjected to questions?

Mr Stephens —I would like to make a brief opening statement to set the context. I also ask permission to table that statement for the committee.

CHAIR —Yes.

Mr Stephens —On behalf of the National Association of Forest Industries, we welcome this inquiry into the impact of the Murray-Darling Basin Plan on regional Australia. NAFI broadly supports the intent of the guide and the need for water resources of the basin to be managed in an equitable and sustainable manner. This includes the application of appropriate science as well as the use of a triple-bottom-line approach that optimises economic, social and environmental outcomes.

The forest industries make a significant contribution to the Australian economy, employing around 120,000 people nationally for the total turnover of around $23 billion. Importantly, the forest industries are a significant contributor to the economic and social wellbeing of regional Australia through the long-term development of forest resources and associated processing and marketing in many rural and regional areas. Forests also provide a range of environmental benefits through their role in salinity mitigation and improving land, air and water quality as well as providing some enhanced biodiversity and aesthetic values in the landscape.

It is for these reasons that the industry has raised some significant concerns regarding the draft guide to the plan. Some of the key deficiencies from our perspective include a failure to adequately acknowledge and take into account those broader socioeconomic and environmental benefits from land use such as forestry and also a simplistic approach to the treatment of interception activities in the plan, particularly with regard to issues of scale and significance of forest activities and some issues around some scientific baselines used to assess water budgets.

We are concerned that the Murray-Darling Basin Authority approach to interception is inconsistent with the National Water Initiative and unfairly targets forestry activities compared to some other land uses which can ultimately lead to some perverse economic and environmental consequences. Plantation forests occupy less than 0.03 per cent of the basin compared to other dryland crops such as deep rooted perennials, which might occupy up to 70 per cent of the area but are not considered in the interception planning framework. Such an approach we consider is not justified in terms of sound science or public policy, particularly where some of the research has shown that a threshold of up to 20 per cent of catchments for plantations may not represent a significant risk to flows.

Furthermore, the baseline for assessing water use impacts does not adequately reflect the historical mix of land use in regions, a large proportion of which was under natural forest which is inherent in the hydrological cycle. Many early plantations were also put in place to revegetate the landscape and reduce damage from previous land clearing while providing a renewable resource. Furthermore, in many ways we feel vindicated in our general criticism of the treatment of interception through a recent CSIRO submission to the plan. I will just quote some key elements from their recent submission. They say:

The Water Act requires that intercepting activities be covered as a use of water. However, the way intercepting uses have been used to calculate new diversion limits in the guide is logically inconsistent and produces artificially high reductions to watercourse diversions in regions that have high interception.

                …            …            …

Current interception does not produce a conflict between current diversions and the environment because it is implicitly included in the water availability calculations of the current plans and is using water in the landscape that was used under natural conditions anyway. It is only future interception in a fully allocated region that is of concern. The National Water Initiative is precise about this and the Guide to the Basin Plan is inconsistent with the NWI.

                …            …            …

It is more sensible to fully accept interception as a fixed use, much as basic rights uses are accepted, and to consider diversions not interception when balancing uses with environmental need.

In other words, we are saying that the baseline used to calculate flows from interception activities in the plan is generally flawed. The future plan must take into account the use of sound science and evidence based approaches when assessing interception significance and thresholds.

In conclusion, we remain committed to working constructively with the committee, the MDBA and other stakeholders to ensure long-term water sustainability of the basin and its related industries and communities. That gives a broad context that summarises some of our key concerns in the submission. We would be more than happy to take some questions and elaborate on some of these issues.

CHAIR —Grant, do you want to say a few words?

Mr Johnson —To reinforce what Mick said, there seems to be a general ignorance in the guide to the Basin Plan in relation to some important industry characteristics. It is significant, for instance, if you go to page 19 of the overview, that there is a complete ignorance in there and nonmention of forestry as a significant regional activity.

We can give you some background documentation here in relation to research done under the Forest and Wood Products Association research for the BRS, I think, that says that within the South-western Slopes region you have got 67 per cent of that 292,000 hectares of forest plantation. It employs somewhere in the vicinity of 8,000 to 8,500 people based on 2003 figures, so it possibly would be more now. It generates a minimum of $1.5 billion in terms of regional output. For the guide to the basin plan to ignore such important figures I think is just negligent. There is a complete absence in terms of a socioeconomic analysis of significant regional implications of forestry, and we are quite surprised at that.

CHAIR —Thank you. Any questions?

Mr SECKER —I do not have any disagreements with them at all.

Mr Stephens —That is encouraging.

CHAIR —He has disagreed with everybody else! No, I withdraw that statement.

Mr TEHAN —Given this negligence, if they had taken that into consideration what impact would you see that might have occurred in the analysis that has been done?

Mr Stephens —I guess the danger is that with the science around interception they are still developing a framework. Forestry in terms of vegetation and landscape is different to when you are, for example, an irrigator and pumping water. What we have been saying is that we really need to get a full understanding of the full significance of the water use in those areas, particularly in terms of what was the baseline previously. A lot of those plantations were established on previous native vegetation, so it is inherent in the calculation of the water budgets. The danger is that the NWI talks about when catchments are approaching full allocation then there are some principles around how you might want to deal with interception. The NWI was very specific about plantation forestry. There was a concern that there had been some expansion in the lead-up to the agreement. We feel it has been singled out and targeted in some of the frameworks, the implication being that if it is done incorrectly it is going to put a brake on further investment and development in the sector and it may have some perverse outcomes for existing plantations if it were to have some rule sets or some retrospective elements in it. That is our major concern, that it currently provides uncertainty for any future expansion until we can get the framework fully set out for interception activities.

Mr TEHAN —Are there scientists who are looking into the impact and what the potential impact could be of plantations on groundwater and that type of thing? Is that research going on so that there would be data available down the track?

Mr Stephens —There is some work being done. The Murray-Darling plan guide refers to best available estimates, so they have picked what data is out there. We have concerns about that in terms of its reliability and application at subcatchment level. There seems to be a lot of extrapolation going on in the estimates. So we have been arguing for more work to be done, particularly on comparative land uses as well. When you are looking at issues of significance and scale, we need to look at water use per hectare for various land uses. There is not a lot of work done on the comparative analyses of forestry versus lucerne versus wheat and then looking at that in terms of the management of those areas. There is a lot of variation. We have been calling for some more work to be done on comparative analysis so that we can understand the full impact on the water budgets and then make some sensible decisions around land use. There is work being done but we can provide some more detail of where we think some priorities should be.

Mr Johnson —Also it seems that the Murray-Darling Basin Authority was scrambling in some respects to get appropriate data on which to base its decisions. There is a relative dearth of good information out there and it is quite surprising in terms of an overall coordination and planning approach that the Commonwealth government did not give some previous consideration to the data and research requirements that would be required in formulating a plan for the Murray-Darling Basin, and a couple of years prior to that effort actually marshalling the resources through a not insubstantial research base to start to generate the information that was required.

In terms of interception, for instance, the Murray-Darling Basin Authority was left to pull on some very last-minute consultant reports that are basically inadequate. They are making very important decisions on the basis of this, which has real social and economic regional implications for the basin community, and the database is not adequate. That is a concern.

CHAIR —Thank you, gentlemen, for taking the time. If there is any further information you would like to impart, you have a few minutes to do so, or you could send us any additional material. We would be happy to receive it.

Mr Stephens —We would like to do that. We will certainly provide some of the socio-economic information that has been done that, as Grant mentioned, had not even been picked up in the guide, and there are also some of the research priorities. We can bring that to the committee’s attention.

Mr SIDEBOTTOM —I would like to follow that up. You have some really interesting information here. For instance, you were talking about the reuse of land that may have had native forests that had been replaced by plantation. You were saying that a native forest uses a lot more water than the plantation that follows it. In fact, it was a fair percentage difference. I think that type of information is relevant to us. Dan’s earlier question was about the impact of forestry—he mentioned plantations—on groundwater. There is not a lot available on this, but you were hinting that there are great discrepancies. The public perception is that—and this is an interpretation—forestry is a big user of water. That is the perception. What you are really saying in this is that it is very narrow and, indeed, discriminatory. The plan tends to support that. That is the type of information I would be interested in.

Mr Johnson —Could I just build on that comment. On page 3 of our submission, towards the bottom, is a brief comparison, as Mick said, that plantations use only .03 per cent of the area of the Murray-Darling Basin compared to 66.7 per cent for dryland pasture. In other words, you have 2,223 times more land being used for highly modified pasture, or dryland pasture, much of which is highly modified. There is the Commonwealth Evergreen Evergraze Project. We are not criticising that project. The project seeks to simply make the best use of water available to a property, which is eminently sensible for a landholder, but nonetheless it has an impact in terms of intercepting activities. You are dealing with 66.7 per cent of the catchment and 0.3 per cent of the catchment, and forests do not use, per hectare of land, 2,223 times more water. Maybe 10 or 15 per cent at the absolute maximum—no more than 20 per cent, and that is a pretty extreme example. So we are really dealing with 10 or 15 per cent. It is just illogical that you are looking at regulating forests in total isolation from other dryland uses.

Our concern is that, to get to a rational public policy stance, if you like, there really needs to be consideration of all dryland cropping activities if you are going to manage the interception. But if you are going to manage the water interception you firstly have to pass the hurdle that the CSIRO submission to the Murray-Darling Basin Authority poses, and that is that to manage the water interception is not only undesirable but also ineffective. So there seem to be some fundamental questions of logic and a philosophical approach, if you like, as to how the Murray-Darling Basin Authority is managing, or proposing to manage, such an important aspect of the catchment hydrology. It is something that we would really like the committee to give some attention to.

CHAIR —There are other farming and pasture technologies. If you develop those across the catchment, it would change the whole run-off pattern, some of which would be potentially encouraged in drought policy. There is a contradiction. The best run-off is going to come from a denuded landscape and anything else we do to improve it in one sense is going to have potential impacts on run-off for a certain period of time. Some would argue that over a period you will get the leaky landscape again. It might be a long time coming. Thank you very much for taking the time. If you want to follow up on the arguments that Sid was putting and give some additional information, it could be very handy.

Mr Johnson —Certainly.

[10.55 am]