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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
18/09/2008
Management of the Murray-Darling Basin system

CHAIR —Welcome. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim.

The department has lodged a submission, which we have numbered 1, with the committee. Do you wish to make any amendments or alterations to that submission.

Mr Slatyer —Thank you. We did make the submission available quite early in the committee’s life and as a result some of the factual information in the submission has changed. We would be happy to lodge a very short update of that. Basically, it just affects the lake levels, the allocations and the water availability numbers that were in that submission. The changes are a result of local rain events, other local run-off and allocation decisions made by the states earlier this week. We can update some of that information. Unless you would like me to provide you with the update right here we can provide you a very short written update.

CHAIR —Due to the constraints of time, if it is very brief I will give you the opportunity; otherwise you can table it. In fact, I will go one step further: I invite you to make a very brief opening statement and if you wish to include that updated information in your brief opening statement, you may. We can kill two birds with one stone.

Mr Slatyer —The submission indicated the levels of the two lakes. The submission said that the level at Lake Albert was -0.18; it is now -0.16, so it has gone up a little.

Senator FISHER —Can you refer us to where this is in the submission?

Mr Slatyer —My apologies. These are facts in attachment A to our initial submission—the third dot point under the first point. I will start again. Lake Albert was at -0.18; it is now at -0.16. Lake Alexandria was at -0.27; it is now at -0.25. In the section on the southern basin water balance, which is on page 5 of our submission, the amounts of water from various sources are listed under the heading ‘Commitment’. The irrigation carryover commitment is now 773; the irrigation allocation commitment is now 528; so the total volume committed is now 4,356. On the left-hand side of that table the total volume now in storage is 4,294. Underneath the table there is an annotation that it ‘includes allocations made by New South Wales’. That should now read it ‘includes allocations made by New South Wales, Victoria and South Australia effective from 15 September 2008’. Finally, in section 6 of the document on page 7 there are updates on the allocation figures but I expect it might take more time than you wish to spend for me to change all those but I am happy to do so if you like. Would you like me to run through those changes?

CHAIR —If you can do it in about a minute, go for it.

Mr Slatyer —The New South Wales Murray allocation should be 50 per cent and the gigalitres column is 90. The New South Wales Murrumbidgee allocation column should be 75 per cent and the gigalitres 259. The New South Wales Darling allocation is the same at 100 per cent and the gigalitres column should be eight gigalitres.

CHAIR —Eight?

Mr Slatyer —Yes, it is a correction. For the Victorian Murray the high reliability line allocation is four per cent and the water column is 36 gigalitres. The Victorian Goulburn allocation is six per cent—this is high reliability water—and the water column is 72 gigalitres. The South Australian Murray allocation is 11 per cent and the water column is 63 gigalitres, with a note that this is effective from 1 October. It was announced on 15 September but does not take effect until 1 October. The total water therefore is 528 gigalitres. That completes the corrections.

Senator FISHER —These are all updated figures. Is the change from 11 gigalitres to eight gigalitres for New South Wales Darling an update or was there an error in the original figure? You have not changed the allocation but you said there was a correction in the water column, if I recall correctly.

Mr Slatyer —I am not sure that ‘error’ is the right word. It is probably due to a better estimate of the water consequences of—

Senator HEFFERNAN —This is the latest guess.

Mr Slatyer —This is the very latest estimate. The department has issued and tabled a second submission earlier today which we are happy to speak to. During evidence that came before this committee from a range of sources there was a lot of interest in the issue of critical human needs and also the issue of how the South Australian water share is calculated. I am very happy to spend a couple of minutes giving an explanation of both those matters if that would be helpful to the committee.

CHAIR —I would rather go straight to questions. If that is one of the questions then we can address it then. Thank you for that opening statement; perhaps you could table it. Senators, time will be allocated on a fair basis to those on the committee—full-time members first. If there are interjections from other senators I will be calling the Senator who has the call.

Senator FARRELL —Thank you, Mr Slater, for your two submissions. Can you tell us how the government’s program for purchasing water for the environment is progressing and the ways in which the government is accelerating this program?

Ms Harwood —I can take that one, Senator. The first round of—

Senator HEFFERNAN —You have got the prepared answer; he has got the prepared question.

Ms Harwood —The first round of purchasing has completed and we have done a review of that purchase round. In terms of where settlement has occurred and the water has been transferred to the Commonwealth environmental water holder, the current water achieved through that is approximately 28 megalitres of water.

Senator HEFFERNAN —Entitlement or allocation?

Ms Harwood —That is entitlement.

Senator HEFFERNAN —So that is no real water.

CHAIR —Senator Heffernan, I have gone through some serious discussions lately from your colleagues about you jumping in and taking their time.

Senator HEFFERNAN —We need to know what we are talking about—because I do not think they know.

CHAIR —Sorry, Ms Harwood.

Ms Harwood —I would like to update you on the allocation but the figures have just come through for the revised allocations for South Australia, Victoria and New South Wales and I would like to take those into account so I would like to come back to you on notice on that figure of the actual allocations against those entitlements. We have also commenced this week—

Senator FARRELL —You are talking 28 gigalitres—

Senator HEFFERNAN —The 28 gigalitres that you are talking about, is it allocation or entitlement?

Senator FARRELL —Mr Chairman, I thought I had the call.

CHAIR —You do have the call.

Senator HEFFERNAN —That is a meaningless answer. Surely to God if the committee wants to be informed we have to know the answer.

CHAIR —Senator Farrell has the call.

Senator FARRELL —Can you please explain about the 28 gigalitres?

Ms Harwood —It is the entitlements. This is a program of acquiring water for the long term for the environment. Against those entitlements allocations will be made each year just as for any irrigator, and that water will be used for environmental purposes. So it is the water entitlement that we have purchased and the total is 28 gigalitres. We have also commenced a purchase round in the northern basin, that is, a call for people to offer us their water for sale. That was advertised on Tuesday this week and that will be open for some time.

Senator SIEWERT —How much are you allocating to that purchase?

Ms Harwood —We have not put a ceiling on it either in dollar or gigalitre terms. We are going to be purchasing water—

Senator HEFFERNAN —Mr Chairman, with great respect: if there are 28 gigalitres of entitlement how much of that is actually allocation—how much out of the entitlement is actually real allocation that goes to those entitlements for this year? In other words, what water are you putting back into the system?

Ms Harwood —That is the question that I said I would like to come back to you on. I  have an estimate here but it is pre the most recent allocations.

Senator HEFFERNAN —What was it pre? Your 28 gigalitres will be pre too.

Ms Harwood —It was approximately three gigalitres against the previous month’s allocations. There have now been further allocations in the basin states.

Senator HEFFERNAN —So we are talking three or four gigalitres—which is no water. You need 700 gigalitres.

Senator FARRELL —Can you explain some of the difficulties in bringing forward irrigation infrastructure investments in order to accelerate the returns of water efficiency savings to the environment?

Ms Harwood —I could take that, Senator. The projects that we agreed to in July and the scale of the projects agreed to at COAG and the investment in bilateral projects with the states are very large projects and they need careful and extensive preparation. The design work in doing those and the work in doing due diligence on the large-scale infrastructure projects is considerable. If you want the best outcome in terms of works and developments that are fit for purpose and that really meet the terms of taking those irrigation communities to a long-term sustainable frame, then you need to take the time to design the projects properly and to do the due diligence on them to ensure value for money. I think that all parties are working as fast as they can on the various projects around the basin and that process is underway.

Senator HEFFERNAN —So our job is actually to find out if there is enough water in the system to do something about the lakes. That is allegedly the task of this committee.

CHAIR —Sorry, Senator Heffernan—Senator Farrell, have you finished your question?

Senator FARRELL —I have just one last question. As you would be aware, there have been some calls for an interim basin plan to be developed over the coming months so that it can be in place by the basin states prior to the basin plan scheduled for development by 2011. What might be some of the practical ramifications of developing such a plan and of its implementation by the basin states in advance of the basin plan scheduled for development in 2011?

Mr Slatyer —The reason that the current agreed arrangement is for the basin plan to take effect in 2011 is due to the comprehensive nature of that plan as required by the Water Act that it will encompass sustainable diversions limits for every catchment in the basin. It will encompass water quality objectives and a range of other fundamental requirements for effectively managing water in the basin. All those requirements are spelled out in section 22 of the Water Act.

The act also requires that there be a period of consultation with all affected stakeholders. It requires a range of procedures in terms of state ministers having opportunities to comment on the draft. I have to say that one of the great challenges faced by the authority here is that a lot of the basic information collection and the understandings about the potential impact of different options and different approaches that will be taken—for example, in setting the sustainable diversions limits—have yet to be undertaken. Under the act the new Murray-Darling Basin Authority is required to take account of a range of factors in setting these limits. That reflects the fundamental importance of these limits in setting a new balance between the environment and consumptive uses, and the consultation and other provisions reflect the fact that the authority to get that right is going to have to be very well informed and engage in a very thorough process. So we and the states have agreed that the appropriate time frame in which to develop that plan is two years, or until 2011, and we as a department will be providing all the assistance we can. But it is the authority’s responsibility to do that job.

Senator SIEWERT —Last time you were here I asked you about the IGA and you said that next time we met you would be able to tell me about progress in negotiations. So this is ‘next time’. I would like to know what progress has been made in the last two weeks.

Mr Slatyer —The short answer is that lots of progress has been made. The officials’ level processes have been completed. The legislative package, the next step, is now with all governments to review and arrange for passage through their parliaments. So from an official’s point of view I am pleased to say that the work is done and it is now up to the parliamentary process to unfold in various jurisdictions.

Senator SIEWERT —How soon do we expect that the packages will be tabled in each state parliament? I am aware that the South Australians have already committed.

Mr Slatyer —Our understanding is, at least at officials’ level, that we are being assured that all governments are aiming to have this package through by 1 November, which was the date that governments initially signed onto.

Senator SIEWERT —Including the Commonwealth?

Mr Slatyer —That is the objective that we set, but our own legislation process is dependent on the success of the state legislation processes.

Senator SIEWERT —So at this stage you are proposing to wait until the other states have passed their legislation before the Commonwealth will table—

Mr Slatyer —No, it does not quite work that way. There is a sequencing of legislation that needs to be followed, but the Commonwealth’s legislation can be introduced when the Commonwealth is ready, which will be relatively early on. But the final execution of that legislation cannot occur until the states have gone through their business.

Senator SIEWERT —I am aware of that. I am also aware that there have been precedents in the past when the Commonwealth has passed legislation and that then comes into effect subject to the states passing theirs. Will the Commonwealth have their legislation in the Commonwealth parliament by 1 November?

Mr Slatyer —It is not really for me to answer that because ultimately the handling of legislation in the parliament is a matter for the minister not the department. At an officials’ level we have done all we can do to allow governments to get on and do what they need to do.

Senator SIEWERT —Okay, in respect of the comment that you made about having everything in and meeting the date of 1 November, can you tell the committee that we are going to meet that date if you cannot tell me whether the legislation that you are going to be introducing by then—

Mr Slatyer —All I said, Senator, was that it continued to be our objective.

Senator HEFFERNAN —The terms of reference for this part of this committee’s work is what is in the system for the lakes—right, do we all know that? Who informs the department on the answer to that?

Mr Slatyer —We are informed primarily by the MDBC due to the importance—

Senator HEFFERNAN —Okay, that will do.

Mr Slatyer —but we also take information from the state governments.

Senator HEFFERNAN —So to the best of the knowledge of the department given these lakes we are wanting to save—which is fair enough because there is a whole lot of human activity around them—were originally salt lakes and the sea is half a metre from the top of the barrage, when were they last naturally salt lakes?

Mr Slatyer —I do not think that we know the answer to that question. It was a long time ago that they were completely salt lakes.

Senator HEFFERNAN —The give-and-take of tides—

Mr Slatyer —There is evidence that there has been mixing of seawater near the Murray mouth—

Senator HEFFERNAN —Which is the nearest to that? How long ago?

Mr Slatyer —Since just before the barrages were installed, as I recall.

Senator HEFFERNAN —That’s right—70 years ago. So if you are informed by the Murray-Darling Basin Commission, the simple answer that we want and they want to know, which is 700 megs, is this: is there water in the system or not? That is all we want to know and, if the answer is no, tell us.

Mr Slatyer —The audit of water—

Senator HEFFERNAN —Can I say that when the priority of the government is buying entitlement in a situation where you are looking for allocation and you do not even know how much of the entitlement is going to convert to allocation—you are going to come back with that—I would have thought you would know the answer to that before you went to the entitlement, or as you went to the entitlement.

Mr Slatyer —The audit and our previous submission indicated the amounts of water physically in the system, but of course—

Senator HEFFERNAN —But what is the answer? Just give it to me in a snapshot.

Mr Slatyer —We have stated the facts about the water that is in the system.

Senator HEFFERNAN —Well, is the water there or not? Can I get to that.

Mr Slatyer —There is a difference between the water that is in the system and the water that is required to provide that amount—

Senator HEFFERNAN —Available in the system. Is it there or not?

Mr Slatyer —I am not going to give a categorical answer because—

Senator HEFFERNAN —You are supposed to be auditing the bloody river. Is the water in the system or not available? There is no need to duckshove. We need a plain answer.

Mr Slatyer —The thing is you ask whether water is available, then I have to ask, ‘Available for what purpose?’ before I can answer the question.

Senator HEFFERNAN —Of the water that is in the system that is not allocated to human resources, that is high-priority water that has already got a contract on it. Of the water that is not contracted now in the system, is there enough water available to do the job that we are talking about?

CHAIR —Sorry to interrupt, but just before Mr Slatyer answers that can I ask that the document you were reading from earlier on is tabled so some of the committee members can have a look at it before you go.

Senator HEFFERNAN —This is what you call bureaucracy at work here. We just want a simple answer. At the present time, to the best of your knowledge, yes or no: outside the already contracted water, is there water in the system to do the job?

Mr Slatyer —If you are talking about the water that governments can readily access and is not precommitted, then the answer is clearly no.

Senator HEFFERNAN —Right, where getting somewhere.

Mr Slatyer —And we made that clear in our earlier submission.

Senator HEFFERNAN —We just want to get simple, short language.

Mr Slatyer —But the way you put the question initially, Senator, was much broader than that. It was impossible to answer.

Senator HEFFERNAN —All right. I have an impossible way. If the Murray-Darling Basin informs the department—and this is about fixing the system this year, which is the task of this committee’s hearing now—and the government has a priority to spend money to rescue the system at the present time if the water is available, and if that Toorale sale up the top there which is allegedly all about the longer term plan is an informed decision, then what part did your department play in the purchase of the property? In a short answer. Did you go and have a look?

Ms Harwood —Me personally?

Senator HEFFERNAN —No, did the department go and have a look?

Ms Harwood —The Commonwealth contributed basically—

Senator HEFFERNAN —No, the question is: did the department drive onto the property and have a look? We will come to the flyover. I know the answer to all this: you did not.

Ms Harwood —There has been extensive work surveying both the flora and fauna at Toorale. New South Wales National Parks—

Senator HEFFERNAN —Did the department drive onto the thing and have a look? You are the people that make the decisions. The answer is no.

Ms Harwood —The New South Wales Department of Environment and Conservation—

Senator HEFFERNAN —Two people went there for 45 minutes to look at the plant that was given in with the sale. And they were from the Parks mob in New South Wales. Other than that, who drove onto the property before the sale?

Ms Harwood —There has been extensive work at Toorale by the New South Wales National Parks and Wildlife Service—

Senator HEFFERNAN —You mean aerial?

Ms Harwood —No, on the ground, assessing flora and fauna—

Senator HEFFERNAN —Let me tell you the answer. According to the people who live and work on the place—and you can deny this if you want to—according to the manager and the people who are there, two women who represent the National Parks mob, the New South Wales mob, drove on there for 45 minutes to have a look at the plant and equipment that was given in with the sale, because the stock were not. Other than that, who has been on the property?

Ms Harwood —In the immediate days before the purchase of Toorale, New South Wales Parks has had people there. Through time on the property, not in the immediate days before, there has been extensive work on the property assessing the conservation values of the property, looking at the flora and fauna and the ecosystems there. It had already been identified as a high priority, of high value in nature conservation terms. That is—

Senator HEFFERNAN —I am talking in terms of the water task of the Commonwealth government. Forget about the national park value of the place; this originally was about water. Sure, there has been some sort of a deal done—

Ms Harwood —It is actually originally—

Senator HEFFERNAN —and an exchange of moneys between the state and Commonwealth. What work did your department do, by inspecting the place, about water, not about what bushes grow and what is under the bushes?

Senator FISHER —Prior to the sale.

Senator HEFFERNAN —Yes, prior to the sale.

Ms Harwood —The purchase of Toorale is about both its nature conservation values and its water entitlements.

Senator HEFFERNAN —I understand that. What work did the department do on your task, which is the water?

Ms Harwood —The water entitlements are clearly specified and we had access to a clear description of those as currently allocated under the New South Wales legislation. And valuations of those—

Senator HEFFERNAN —If you are informed on that, tell the committee what licences you have bought.

Ms Harwood —I can provide those on notice. There is a detailed list of licences associated with the property.

Senator HEFFERNAN —But you would agree with Don Blackmore, Tom Hatton and Mike Young that it is not going to return any water of any means to the system?

Ms Harwood —No, I would not.

Senator HEFFERNAN —Where would you disagree?

Ms Harwood —I would say that the property has considerable water entitlements—

Senator HEFFERNAN —I am not talking about entitlements; I am talking about allocation.

Ms Harwood —When water flows in the Warrego and the Darling that water which was previously harvested—pumped from the river for irrigation—can now be used for environmental purposes.

Senator HEFFERNAN —Righto, we will go to that. There is an 8,000 meg licence on the Darling, which is an extraction licence which is dependent on the level of the river at Louth. It is a low security licence. I documented all this in the Senate for you the other day if you want to have a look at it for your information.

CHAIR —You have three minutes, Senator Heffernan, before we go back to Senator Siewert.

Senator HEFFERNAN —There is a 6,000 meg gravitational set up out of the Warrego. That is all the water you are talking about. There are two bank licences and believe it or not there is an area licence—they were done away with years ago. There is a 1,600 hectare area licence. This purchase will return no water to the system. What I am asking is this: if the department is informed by the Murray-Darling Basin Commission and they have not even been asked to comment and have not been there, and you blokes have not been there but two girls from the national parks have been there, what sort of a ramshackle arrangement is it? It is a viable dry land property.

Senator FISHER —I have two lines of questioning, hopefully one is just one question so I will ask that first. I note your reference in the supplementary submission on page 1 to possible incentive and compensation schemes for water holders. In formulating that further advice to the government, has the department taken into consideration the views of the likes of the South Australian irrigators, loosely, suggesting for example that the federal government double the amount being offered per megalitre from some $2,300 to some $4,800 as a mechanism of providing incentive?

Mr Slatyer —The specific answer to your specific question is no. We did not interpret this term of reference in that way and our submission has endeavoured to respond to the term of reference as we saw it. We saw it as being about tax incentives and also about the role of the government’s water acquisition program.

Senator FISHER —In that case, can I suggest to you that I see this term of reference as including the aspect that you have referred to but also including the price that you might choose to offer irrigators to provide them with the incentive to relinquish their entitlement to water. I ask the department to revise on notice their advice in respect of that term of reference to encompass that possibility. Secondly, your initial submission refers on several occasions to the term ‘critical human needs’. Can you provide the committee with a definition of that term and a definition of the term that has been signed off by the minister?

Mr Slatyer —Miss Harwood will very quickly deal with the first question because we may not have to take it on notice if she can deal with it quickly. I will address the critical human needs question.

Ms Harwood —I am happy to provide more comment later if you need it but I guess the thing to look at is that under the water purchase program, which is intended to deliver a long-term restoration of the balance—basically taking water from irrigation by purchasing it from willing sellers and making it available for environmental use—value for money is a major consideration.

Senator FISHER —Sorry, Miss Harwood, we do not have much time. Do you have a definition of the term ‘critical human needs’?

Ms Harwood —I am sorry; I was answering your first question. The point is just that if you pay a lot more than market price for water now you will be able to buy less water overall.

CHAIR —We are going to invite you back for another two hours tomorrow. I just have to consult with some colleagues. We will extend tomorrow’s hearing. So, Senator Fisher, I am sure you can come back to your critical human needs question tomorrow.

Senator SIEWERT —If we can guarantee that we are having them back tomorrow we are happy to have a go tomorrow.

CHAIR —I will extend and change flights and do everything that we need to do to give the committee ample opportunity to ask questions of the department tomorrow.

Senator HANSON-YOUNG —In your first submission you refer numerous times to flooding the lakes with salt water as a viable option. Since then we have obviously heard from a number of witnesses and received a number of submissions that say that the salt water option perhaps is not as viable as others believe. One of the big concerns is in relation to the effect on ground water and that is not something that your submission dealt with. Could you give me an understanding of what the department has looked into in terms of the effect that increasing the salt intake in the lakes would have on the ground water of the Fleurieu region?

Mr Slatyer —What was said in our submission was that that course of action of allowing some seawater into the lakes may result in a viable estuarine system in Lake Alexandria depending on the volumes and release patterns of the flows. I want to be clear that we did not assert that it would produce necessarily a viable outcome. Our view and our expectation are that before anything like that occurred there would be a normal environmental impact assessment of the action. Indeed, the Environment Protection Biodiversity Conservation Act allows for that kind of process. Issues of the kind you and others have raised about the possible environmental risks of allowing that to occur would be fully explored in that context.

Senator HANSON-YOUNG —My understanding, based on reading the submission, is that that is a responsibility that should be left to the South Australian state government. Is that your opinion?

Mr Slatyer —In the normal course of events South Australia would be the proponent of the action and that would trigger the action. My colleague Mr Flanigan can explain how that all works if you wish.

Senator HANSON-YOUNG —Do you have any idea as to whether that is what they are considering doing? Or have they started? Have you had any communication around that?

Mr Slatyer —It is not for us to speak for South Australia.

Senator HANSON-YOUNG —All I want to know is whether you have had any communication and dealings with the South Australian environment department in relation to looking at a risk assessment or an environmental impact study as to what the effects of flooding the lakes with salt water would be?

Mr Flanigan —I will answer that part of the question. At this stage we have been having informal discussions with South Australian officials around what the requirements would be should it be necessary to open the barrages, and the requirements for the EPBC Act. As we understand it, they have already commenced the process of exploring the modelling and the like for around the lake that would be associated with that piece of work. So we fully expect that, if it is required or desired that the barrages be opened, they will go through an assessment process and that assessment process will involve a consideration of all the relevant and potential impacts.

CHAIR —I have had a request from Senator Adams to ask a 30-second question. Can we please indulge her, because Senator Adams will not be here tomorrow.

Senator ADAMS —I have done a tour of the area. I am from Western Australia but I have been up and down and am used to the salinity side of things. Could you tell me how much salt actually is deposited in the Lower Lakes every day?

Mr Slatyer —No. I cannot answer that question.

Senator ADAMS —Could you take it on notice? I want to try to get a really good idea about just how much salt is coming down the river.

Mr Slatyer —The salt would have two sources. There would be salt embodied in the River Murray that is coming into the lakes—

Senator ADAMS —That is what I am talking about.

Mr Slatyer —and there is salt load created through evaporation of the current lake body. If we can track down those figures, we will provide them.

Senator ADAMS —The reason I am asking is that, with the decision perhaps to put a weir in above the lakes, I was wondering how that is going to react with the salt coming down the river. If it does not go into the lakes, what happens? Does it back up and the river becomes increasingly salty because it is not moving through? If you could take that on notice, I would be interested.

Mr Slatyer —Yes.

CHAIR —I thank officials of the department. We hope to see you tomorrow as well. Mr Slatyer, you were reading from a document earlier on. Could you table that document, please, because a lot of the senators did not quite get the figures down as we were going.

Mr Slatyer —The updated figures? We will provide a little one-pager showing those for you.

CHAIR —Please table that for us, thank you.

[5.18 pm]