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Impact of the Murray-Darling Basin Plan on regional Australia

CHAIR —I now welcome the witnesses from the National Farmers Federation. Sorry about that earlier. I hope we have not disrupted your program for the day. Although the committee does not require you to give evidence under oath, I should advise you that the hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. We have received your submission and we do thank you for that. Is there any additional material that you would like to present, or would you like to make some opening statements and then be subjected to questions from the committee?

Mr Linnegar —I will just make a short opening statement, thanks, Mr Chairman. Apologies for our tardiness. I think it only proves the theory that those closest to the destination are the last to arrive, so apologies for putting you out of schedule a little bit. Thank you, firstly, for the opportunity to present to this inquiry.

Secondly, through our submission you would be well aware that our view is that the guide to the Basin Plan is a poor document that does not meet the standards of public policy and planning that ought to be expected out of the Commonwealth. The guide, if implemented in full, will undoubtedly cause massive social dislocation across the basin. As such, the release of the guide has resulted in a significant and widespread backlash, not just from farmers but from communities across the basin who are rightly concerned about their future.

The NFF believes the guide must be replaced by a far more balanced plan that gives weight equally to the needs of the environment, the economy, and our communities. The NFF recognises that the new MDBA chair, Mr Craig Knowles, has commenced his role in a more positive way, engaging directly with communities and reiterating the need for greater balance in the plan. However, much more must be done to achieve this balance. We have heard repeatedly that the most important thing that the Basin Plan can deliver is certainty. We understand this, but not if it means the demise of communities based on what is, so far, an unconvincing case. What is required is certainty of a fair result based on sound information and good public engagement.

Also, what we would like to see delivered is clear and transparent communication of the process and the expected time frames. It is of vital importance that the positive engagement that Mr Knowles has now commenced is continued throughout the remaining process. Thank you, Mr Chair.

CHAIR —Thanks, Matt. Deb, have you got anything you would like to say?

Ms Kerr —No, he has said it all.

Ms LEY —Matt and Deb, welcome. Do you really think that the plan can be rescued at this point in time? I gather from your submission that you think it needs significant reworking. Can you just talk about what that reworking might involve? Do we need to go back to the drawing board, as some of your member organisations have suggested?

Mr Linnegar —Let’s look at the outcome first.

Ms LEY —The outcome?

Mr Linnegar —The outcome that we require is that greater balance based on the equal weighting between those three factors we mentioned before. Can it be delivered in the time frame? I think the time frames that we are working under currently are ambitious in order to get to that point. I think the ideal outcome from our members’ point of view would be a thorough and proper analysis and planning base for that. Can it be achieved in the time frame? How much more work is being done? We have not seen the additional work, so we could not really answer as to how far along the track the MDBA, under its new guise, has got to. Could they get there? I am not sure. Are the time frames ambitious in order to get to a balanced outcome? Most likely.

Ms LEY —Did you have anything to add, Deb?

Ms Kerr —Just probably to elaborate a little bit on the process that we outlined in our submission to the guide and this inquiry as well as the Senate inquiry. There is probably some confusion about what is the Commonwealth’s responsibility through the Basin Plan and what ought to be the responsibility of the states. If I use an example, the environmental assets that were listed in the guide originally started out as some 9,000-odd assets and, through geocoding, come back to 2,442. So is that an appropriate responsibility for the Commonwealth or should there be clearer, more transparent roles and responsibilities between the Commonwealth and what ought to be state responsibilities versus even perhaps at a regional level? At regional planning level, that takes into consideration both the state’s responsibility as well as at the regional level. So what are truly the national priorities for the Commonwealth? I do not think that is clear. That is just one example. If we look at threatened species, for example, there is the EPBC Act at federal level and there are environmental laws at state level. Both of those require the development of recovery plans for threatened species. That is already under a planning process, so is there a need for an additional amount of work through the Basin Plan? They are just two quick examples of where I think the roles and responsibilities are not very clear.

Ms LEY —What is it about the plan or its articulated aims that NFF does agree with? In other words, if it were to be put to you, as it might be by some of your member organisations, that we actually do not need the plan, that the state water sharing plans are achieving the appropriate environmental and community outcomes, what would you say that we actually do need from the plan?

Mr Linnegar —I think we have said, ‘Do we need a basin plan as such?’ and the NFF has said, ‘Yes, we do, but not the one that was delivered in the guide,’ so bringing those state plans and obviously the needs of communities and the environment throughout the basin and linking all of those things together certainly has some merit in terms of better management into the future, but, as we said before, that can only occur and result in a fair and balanced plan if you weigh each of those factors equally in that process. I hope that answers your question as to, ‘Do we need a plan and what are the positive parts of it?’ As we said before, it would require significant change to what we have seen.

CHAIR —We have heard a lot of evidence in terms of dealing with each catchment and then arriving at some sort of total impact, and people are trying to look at the total at the start. It just becomes too big for the mind to comprehend until you get down into the various catchments and the people who live in those catchments actually identify the savings and the need for assistance. Has the NFF done any work in terms of the entitlements within those catchments and the allocations over the last 10 or 20 years, if that information is available, as evidence towards the socioeconomic impacts of potential reductions through the SDL process? Have you got any evidence and, if you have, where are you identifying the hot spots? As our previous witness said, there are areas where water could be purchased, in a strategic sense, without having a dramatic socioeconomic impact. Have you identified any of those areas?

Ms Kerr —Firstly, I have certainly had a look at entitlement versus allocation across the basin. The authority and its predecessor, the commission, looked at allocations compared to entitlement. Of the water able to be used that has been allocated, entitlement holders have taken, on average, about 75 per cent of that across the basin on a long-term basis. That is a fair indication that entitlement holders have not actually overused their allocations; they have actually been quite conservative. Obviously, in that average there is going to be high use and low use. In terms of what that means from a socioeconomic perspective, no, we have not done any further work on that particular basis.

CHAIR —Is it possible to get the information you have got in terms of that relationship between entitlements and allocations?

Ms Kerr —Yes, certainly. We can table that.

CHAIR —The point Sussan makes is a valid one in the sense that there are ways and means of controlling the amount of water through the state based process, as there is through a Commonwealth and state based process.

Ms Kerr —We can certainly table that, Chair. The other point I would make is that what has not been clear in the guide to the Basin Plan is what are the environmental outcomes that the authority and, on behalf of that, the government are seeking to achieve? Until you clearly know that, it is very hard to determine what the environment needs in terms of water.

Mr McCORMACK —On pages 15 and 16 of your excellent submission you talk about research and development. What sorts of things could be undertaken to gain water efficiencies and how much water do you think might be able to be achieved through more funding or better R&D?

Mr Linnegar —Good question. Unfortunately, we are raising the R&D because a lot of the R&D that was going into things like Land and Water Australia and other agencies has certainly declined in recent years. That makes life more difficult. In terms of R&D into efficiencies, all the major commodities and sectors, at least in the irrigation sector, which I am more aware of, will be running their own programs to gain greater efficiencies over time—water use efficiency of their crops and these sorts of things.

That is one element. The other element would be to do with the linkage between surface groundwater and some of the remote monitoring techniques I mentioned before to better match crop water use and supply and also any predictive tools that could be developed in terms of rainfall and the relationship of run-off so that, whether you are a farmer or a large irrigation company, you can better match orders with water that is actually coming in. They are a few of the types of areas that we would be talking about there.

Ms Kerr —The only one I would add to that is that the authority identified that one of its highest risks in the guide to the Basin Plan was environmental data and knowledge. The science that is around a lot of these sites that have been identified is actually quite poor, even for Ramsar sites. I think in our submission to the guide itself we detailed some of that poor knowledge.

There is a whole research need that needs to happen around environmental sites. What are the thresholds? How far can they be pushed in times of drought before it is actually too late? What does it take to recover? There is some good work coming out of Yanga Station in terms of wetland recovery and it takes not as much as you would think. What is the water that can be put on wetlands, using environmental works and measures, for example, that might save water and deliver greater outcomes to the environment? There is a whole body of work there and a paucity of data and knowledge. I would suggest it is perhaps a 20- to 30-year science program.

Mr Linnegar —I think that is vital. Everyone gets fixated on the numbers we are talking about. It is also the numbers that frighten people and communities and you can obviously see why. The extent that those sorts of works and measures and the effect that they can have could be franked, so to speak, when we are talking about the numbers in what comes out in the Basin Plan, will be very important. For instance, if you add up all of those sorts of projects that Deb was just referring to—be that Lowbidgee, Lindsay Island or whatever—and you can say that, for want of a number, the number is 1,000 gigalitres but really we can achieve 2,000 gigalitres worth of impact in terms of instituting these works and measures, the franking of that in the Basin Plan and the inclusion of that will be very important. Where we have the information now, let’s use that. Where we do not, as Deb has just mentioned, that needs to be achieved fairly quickly.

Mr SECKER —On page 14 of your, can I say, great submission, the executive summary—I think I could have almost written my own words, and I think it was—

Ms Kerr —You are most welcome.

Mr SECKER —But on page 14, I am just trying to get an understanding of some of the language you are using. In the table on the Murray Irrigation systems you have a column talking about ‘True loss’.

Ms Kerr —Yes.

Mr SECKER —Evaporation is ‘Yes’, seepage is ‘Yes’, escapes is ‘No’, Dethridge wheels is ‘No’, and nothing for channel filling. I am wondering if you could explain that a bit.

Ms Kerr —The information came out in a report that Murray Irrigation did a number of years ago, which certainly predates the Basin Plan and the Living Murray process, so it was quite a long time ago. It looked at whether the losses were true environmental losses or whether they were really management losses. So Dethridge wheels are a management loss. It can be fixed. It is not truly lost to the system. It is just that farmers were receiving more water than perhaps they were getting metered and paying for. And the same with escapes: Matt could probably talk more eloquently about this than I can, but if you properly manage the system so that there is very little or no escape water at the end of the irrigation system then that water is not lost to the system. I could table the full report for you to have a look at. It is also available on Murray Irrigation’s website.

Mr SECKER —They talk about it just not being feasible to put it in pipes.

Ms Kerr —Yes.

Mr SECKER —Is that because you would have to start again and you would have too many pipes? You could always engineer a solution, but at what cost? I think that is what it comes down to.

Ms Kerr —Yes.

Mr SECKER —But have they ever looked at what the cost would be of doing it in pipes?

Ms Kerr —That report actually details the costs but, as I said, it is quite a number of years ago. It probably would be worthwhile looking at the value of that now, with the changed value of water entitlements and, perhaps, the infrastructure programs that are available. Certainly at the time that the report was written the company deemed that it was cost prohibitive to do that. I think the sheer size and the length of some of these delivery systems is why some of that is cost prohibitive. But, Matt, you might want to comment.

Mr Linnegar —Yes, I think that is a reasonable point. Take for example Coleambally Irrigation—a totally automated open-channel system currently running at about 90 per cent efficiency over the total system. Firstly, it does not always follow that an open-channel system is not efficient and, secondly, you can always do something. You could pipe the main channel going into the Murrumbidgee or the Murray or Coleambally, but at what cost, and what would you actually save? What is the cost-benefit analysis? On the work we have done, it is just not worth doing, certainly on the mains.

With some of the smaller spurs and other systems, you potentially could, but again you have to work out seepage versus evaporation losses and oftentimes in these sorts of systems it is not the whole length of channel. It might just be one particular point in the system, or crossing a prior stream or something, and fixing that one spot might give you the 80-20 rule. In other words, you might sort out 80 per cent of your losses out of one spot rather than doing the whole system.

CHAIR —Does the NFF have a view on the role of the Environmental Water Holder as to how it should fit in the institutional structure of future management?

Mr Linnegar —I am not sure we have discussed this, have we?

Ms Kerr —No, you probably have not with me. He has only been on board two weeks! The Commonwealth Environmental Water Holder, as I understand it, has a role to use the water that the Commonwealth has acquired either through acquisitions or infrastructure purchases. That person does not have a role in the decision making around the acquiring of that entitlement and has currently an interim framework set up about how that water is then applied or used. That interim framework is in existence until the Basin Plan’s environmental watering plan is finalised and then the use of the water under his authority will be in accordance with that plan. So there is a framework there, but I suppose there could be better information about where the environmental needs are, according to the Basin Plan, and better matching that to the acquisition of entitlement.

Mr Linnegar —I will say one thing. The previous speaker mentioned this Chinese Wall between those purchasing the water and those who are tasked with managing it properly. One of the downsides of that, of course, is if and when you get the two of them together: if you talk to those buying, to date they have just said, ‘We are only interested in purchasing permanent entitlement.’ Quite frankly, I think that is a mistake. I think if they spoke to the Environmental Water Holder and those other jurisdictions that the water holder has to no doubt work closely with—state agencies and catchment management groups and whatever—they might find, and would probably quite ably accept, different sorts of products.

Permanent entitlement is fine for one sort of need. Again, the previous speaker mentioned a product that sounds very much like the one I have been working on for about five years, called River Reach. The Commonwealth have not purchased, except for that one occasion, either temporary water or other products such as forward sale or future and options, and I think there is a responsibility to explore those other options and to play a role in establishing those markets because the needs of some sites and the environment could quite easily be met in some years and in some regions through those other products and not just permanent entitlement.

Ms Kerr —And part of that would come back to our earlier advice about environmental sites, what are their water needs, understanding that better and then better matching those needs to the products.

Mr SIDEBOTTOM —You have gone into some detail here in section 9, ‘Opportunities for economic growth and diversification of rural communities’. You comment about an assessment and a taxation review. There might be an opportunity a little bit later in the year. There were some interesting points made.

Mr Linnegar —Yes. Thank you.

CHAIR —The NFF takes the committee to task a little bit in terms of the usage and entitlement issue. The reason that we are looking at that issue is that one of our terms of reference is to look at the socioeconomic impact on various communities and obviously when you look at different areas, and different water products too, where their usage has been very close to their entitlement the removal of 10, 20 per cent has an enormous impact on that particular community.

In other areas, particularly in the Darling part of the system, where usage and entitlement tend to wander about a bit because of the nature of the system, there are different impacts. In some catchments the usage figures are roughly 50 or 60 per cent, sometimes lower, in terms of their total entitlement, so a reduction from the entitlement obviously has a different impact. That is why we were trying to identify these real hot spots. One of the other tasks we have been given is: where they are identified, what do we do to ameliorate any potential real impact if in fact the SDL process is maintained? That is the reason.

Ms Kerr —Sorry if you took it as being taken to task, but I suppose in our previous experience with state agencies and so forth there has been a history of governments taking water without paying for it, and reform, so we are a bit cynical. Sorry about that.

CHAIR —I fully understand. Thank you for appearing today. There will be a transcript of today’s hearings. If there is any other evidence that you might like to give us, particularly given some of the questions, or if there are any specific areas within the basin that can be identified in terms of more efficient works and measures or investment in infrastructure, we are really looking at those sorts of things. I think, Matt, you made the comment that 2,000 gigalitres may be obtained through a range of things which bear very little relationship to taking water from anybody. They are the sorts of things that I think we have to try and flesh out. Thank you very much.

Mr Linnegar —Thanks for your time.

Ms Kerr —Our pleasure.

[11.01 am]