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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
11/09/2008
Carbon sink forests

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. Does anyone wish to make a brief opening statement?

Mr Matthews —I do. First of all, thanks for the opportunity. I will give a little bit of background about the National Water Commission, which is not always understood. We are an independent statutory body in the Environment, Water, Heritage and the Arts portfolio. We have a number of roles, but the important ones for today are as follows. We have a role of assisting governments throughout Australia—federal and state governments—with the implementation of the National Water Initiative. Sometimes the National Water Initiative itself is confused with the National Water Commission, but of course the National Water Initiative is an intergovernmental agreement. We have a role of advocating and, as they say, facilitating the outcomes of the National Water Initiative. I mention that because we will be making some comments shortly about how we think these aspects of the National Water Initiative are going. We advise both COAG and the Commonwealth minister about issues of national significance relating to water. Our interest in this inquiry is the carbon sink forests and their potential impacts on water availability for other users, because that is an important aspect of the National Water Initiative.

Under the National Water Initiative, it was recognised by governments—and all governments of Australia have now signed this intergovernmental agreement—that large-scale land use change such as the expansion of plantation forestry has that potential to intercept large volumes of water and that that needs to be dealt with. So the National Water Initiative came up with an agreement among governments about, at least, a high-level framework for managing the growth of interception activities across Australia, to be adopted on a priority basis by the year 2011. I will come back to that date, 2011, because I am told that you have been focusing on that in your previous hearings.

Under the National Water Initiative intergovernmental agreement, the arrangements that governments committed to are these: that, in water systems that are overallocated, fully allocated or approaching full allocation, significant interception activities should be recorded and any proposals for additional—that is, new and additional—interception activities would require a water access entitlement; and that, in water systems which are not yet fully allocated or approaching full allocation, estimates are made of the amount of water that is likely to be intercepted and a threshold level of interception is calculated above which a water access entitlement would be required for, again, those additional significant interception activities. I know that is a bit of a mouthful, but that might be helpful for when you are preparing the report, because it is a critical thing for this inquiry.

Senator NASH —Do we get it in English as well?

Mr Matthews —I was trying to make it more English-y! The NWI requirements are reflected in the guidelines that you have been discussing in the last 15 minutes, and I will come back to that, but our basic position, from the commission’s point of view, is that we are pleased that those guidelines reflect the need for water access entitlements to be obtained where the establishment of a carbon sink forest represents a significant interception activity.

All that is a bit of background, but I want to make a couple of points from our assessments about how water reform is going. We have found and reported publicly that the current responses by the states to their implementation of the NWI interception commitments are uneven. There is a need for significantly improved knowledge, policies and practices about interception. All states have started on water planning, but in some cases the rollout of completed plans has been slow. So, across Australia, the National Water Commission’s blunt assessment is that there are deficiencies in models, tools, data and information to rigorously quantify the impact of the interception at the catchment level. In addition, we have said publicly that different jurisdictions continue to assess sustainable yield differently and that there are different approaches to the definition of what overallocation means, which is a pretty critical issue. We recognise that these findings, including the need for a shared national understanding of sustainable levels of extraction, improved water planning and improved tackling of interception, have been picked up in COAG’s current water reform plan, and we look forward to receiving that. The commission itself is funding at least $3.4 million worth of interception work to try to improve the scientific and program understanding of interception, and we can provide details of those projects and investments if you want.

So what is our attitude to the proposals that this committee is inquiring into? I think there are half a dozen points. The first one is that we do not expect that these provisions, on their own, will lead to large-scale land use changes. We are aware of the ABARE modelling where, in a sentence, they are saying that it is more likely—

0Senator Joyce interjecting

CHAIR —Sorry, Mr Matthews. Senator Joyce, you may want to walk out of the room with your mobile phone and have that conversation somewhere else, because we are hearing it.

Senator JOYCE —I wanted someone to hear what is going on here.

CHAIR —Carry on, Mr Matthews.

Mr Matthews —In a sense, they are saying this is likely to be an additional but not an alternative source of income. That is our first point. Second, the National Water Commission is pleased that those guidelines do require, in a general sense, the observance of natural resource management and water management policies and plans. We are pleased also that they basically reflect the National Water Initiative language. Fourth, we have already urged more concerted action by the states and territories on interception. There is a lot that has to be done before the year 2011—and 2011 is a ‘not later than’ date; it is not a target date; it is a date by which these things are meant to be completed. So there is a lot that has to be done by the states and territories before then. Fifth, the commission has already expressed its concern about the slow rate of rollout of completed plans across Australia and we have already expressed our concern about the lack of a shared national definition of sustainable levels of extraction and an approach to that.

Finally, what do we think is needed? First, we think that there does need to be a significant improvement in the level of knowledge about interception. There are many examples, but I will just give the example of knowledge of where interception is or could be and the differential effects of interception in different landscapes. So significantly improved knowledge is required. Secondly, we need improved policies about interception in the states before 2011, including the need to settle, as the governments have committed to do, thresholds for the size of plantations and so on. I note, relevant to this inquiry, that these carbon sink forests we expect will be small. Thirdly, we need improved quality of NWI-consistent water planning. Our argument there is that there needs to be improved science and data and better participation processes, better participation planning models and better taking into account of climate change and other risks to the water supply. Fourth, we think there needs to be faster work on this national definition of sustainable levels of extraction and approaches to it. Finally, overall we are saying directly that we think Australia needs more concerted action on interception, although—coming right back to where I started—we do not expect that these particular provisions on their own will lead to large-scale land use change and large-scale interception of water.

CHAIR —Thank you. Mr Radcliffe, do you wish to add anything to that opening statement?

Mr Radcliffe —No.

CHAIR —Before I go to questions from senators, I remind senators that this is the carbon sink forests inquiry.

Senator BOSWELL —Ken, you gave us about 15 reasons why this legislation should not proceed. You just enunciated them all there: ‘We weren’t ready, we had to do more work et cetera.’ Would you prefer to see this legislation put back until all that work that you mentioned there was completed in 2011?

Mr Matthews —I was not giving reasons why this legislation should not proceed.

Senator BOSWELL —You were. You were giving exact reasons.

Mr Matthews —I was making some points about interception, but I was at pains to make the point a couple of times that our expectation is that these carbon sink forests will not have major impacts on interception.

Senator BOSWELL —With due respect, how would you know whether it is going to be 80,000 hectares or two hectares? What are you basing it on? No-one thought MISs were going to take off. Now they control about 30 per cent of Queensland cane land. Everyone had said, ‘No, they won’t do anything.’ Well, they have made a mess of it up there.

Mr Matthews —I see this as quite different from MISs. The ABARE assessment does put some numbers to it.

Senator BOSWELL —Eighty thousand hectares. That is a lot of land.

Senator JOYCE —I would always like to have an option on ABARE’s forecasts because they are always out.

Senator HEFFERNAN —There was the $46 a barrel for the oil.

Senator JOYCE —I would love to have the option of oil at that price.

CHAIR —Could we have some order please.

Senator BOSWELL —Mr Matthews, what are you basing it on? It is all very well to come here and say, ‘I don’t think it is going to have any impact,’ but what you basing that on—just the seat of your pants? What are the reasons? Eighty thousand hectares is a lot of land if you put it in the wrong area.

Mr Matthews —Eighty-thousand hectares across Australia is not a large area of land, particularly when all the price incentives are for it being on marginal land.

Senator JOYCE —How can you say that?

Mr Matthews —For the reasons that are in the ABARE report. When a farmer is making a choice about how to use his or her prime arable land and the stack up alternatives, this will not be a good investment.

Senator BOSWELL —MISs were.

Senator HEFFERNAN —With great respect, the CO2 company has told us that they are going to plant out in wheat farms.

Mr Matthews —My understanding of what they were saying to you was that they were putting in strips across some territory out in—

Senator HEFFERNAN —To their credit, they were going to survey them and stick them on the—

Senator JOYCE —Prospectus.

Mr Matthews —They might be doing that for their own reasons. They might be doing it because it is good management practice.

Senator JOYCE —Can I pick up on one point that you brought up? You said that it is not like MISs. Why do you believe that to be the case structurally? I can see why this is better than MISs if I want to invest in it, because I get both a tax deduction and an income stream. Where do you make the decision that it is not an MIS? The reason I pose that question is because MISs do use prime agricultural land.

Mr Matthews —I could not hear all of that question, I am afraid.

Senator JOYCE —I will quickly go through it. You made the statement that this is not like an MIS. I disagree. I think it is very much like an MIS, except that it is better than an MIS because you get an income stream—

CHAIR —What is your question, Senator Joyce?

Senator JOYCE —The question is: why do you believe that it is not an MIS? Do you believe that MISs use or do not use prime agricultural land?

Mr Matthews —I suppose I am avoiding the question, but I do not think that I am the right person to be giving you a tax assessment about the differential treatment of MISs versus these.

CHAIR —That is fair enough.

Senator JOYCE —You said to Senator Boswell that this is not like an MIS. I am putting to you that it is exactly like an MIS.

CHAIR —I would urge senators to wait for the call. When you are given the call, acknowledge that you have it. It is starting to get a bit out of hand. I was in conversation with another member of the committee and it sounded as though there was a circus going on in the background. Please stay relevant.

Senator BOSWELL —I have yielded to Senator Joyce.

CHAIR —You do that through the chair, Senator Boswell. You would know that better than anyone, being the father of the house, as you told me the other day—and I did not argue with you. Senator Boswell, do you have any more questions?

Senator BOSWELL —I just listened to Ken Matthews, and he gave us six or 10 reasons why we should not go ahead. That is game, set and match as far as I am concerned.

CHAIR —Do you have a question, Senator Boswell, because Senator Milne wants to ask a question.

Senator BOSWELL —Mr Matthews answered the questions. As I took it, we should not go ahead until all these things are done.

Mr Matthews —Can I comment on that?

CHAIR —Yes, Mr Matthews.

Mr Matthews —I do not want to leave that uncontested. I was not saying that this should not go ahead; quite the contrary, in fact. I was talking about interception and the concerns that the National Water Commission has previously expressed about interception. But I was at pains to say that we do not assess these proposals as being a serious interception challenge.

CHAIR —Thank you, Mr Matthews.

Senator MILNE —That is the point that I want to come to. I understood from what you were saying earlier, with the many reasons that you went through, that there is patchy implementation around the country and varying degrees of commitment and results at the state level regarding compliance with what was signed up to through COAG, through the National Water Initiative and so on. The point that we are making here is that the National Water Initiative has to be complied with by 2011. This legislation is in place now. Are you satisfied that the guidelines, as they currently stand, will prevent overallocation in catchments around Australia?

Mr Matthews —What has not come out in the evidence so far, as I understand it, is that there has been a prioritisation process about setting up these plans. The water plans across Australia have been sequenced by the state governments, which are responsible for this, according to where they think the greatest pressures are—where the water systems are most stressed. So, for a long time now the most stressed areas—water systems—have had intensive planning activity across them. That gives me some confidence that, if there are water systems that are approaching full allocation or are overallocated, they are under notice now. Where the systems are not approaching overallocation, and given what I have said about our expectation that this will not be an additional major demand on water, I am confident that the sequencing and the timing can be accommodated.

Senator MILNE —I want to take you back to that. You are saying that you are confident that with the sequencing it will be all right because you are confident that ABARE is right that it will not roll out. But the issue here is that it is not being done alone. I notice that you have qualified everything that you said by saying that, standing alone, this would not lead to the rollout.

We are coming into an emissions trading scheme in which you can opt in for carbon. We had a recent report from ANU saying that at $14 a tonne the MISs will not cut down their trees but will keep them for carbon. At $14 a tonne it starts to look like a very different scenario in terms of where you would plant out trees. The best land with the most water is going to grow trees faster and will have the biggest volume of carbon in the time frame. The question I am asking you is this: no matter whether thousands of hectares are set aside or two hectares are set aside, are you confident that this would be a sufficient guideline to establish where it could safely be assumed you could establish a carbon sink forest without destroying the catchments? This is motherhood. You tell me who is going to enforce it.

Mr Matthews —I do not know. We would not—

Senator MILNE —Will you ask?

Mr Matthews —We would not be involved in it.

Senator HEFFERNAN —Can someone out there in bureaucrat land tell us who the author of this rubbish is?

Senator MILNE —You were not asked, I assume?

Mr Matthews —No, and nor should we be. We are an independent adviser to governments about water things.

Senator MILNE —You would think you would be—but, go on.

Mr Matthews —Look, there are a lot of dimensions to your question. I think the best way to answer it is to say that the National Water Initiative has set up processes that give priority to the most overallocated systems. So those systems already have attention. This piece of guidance requires that water plans, just like any other NRM policies and plans, need to be observed—as they should, anyway, because it is basically following the law. So there is already in place a mechanism that should be able to handle the concerns that you have about water demand in overallocated or approaching overallocated systems.

Senator MILNE —So would you agree with a set of guidelines that said, specifically, that you can only get the tax deduction in catchments where there is a signed off water plan and catchment management plan?

Mr Matthews —This is asking my opinion about a policy thing. Perhaps I can answer it this way: I think that could run the risk of having a perverse outcome—that is, it might direct these forests to the most overallocated system because the most overallocated systems are where the planning has been. The least overallocated systems often have not yet finished their planning. I suggest to the committee that you have a think about making that condition, because it might have a perverse outcome.

Senator MILNE —But if they have got a proper catchment management plan they will have identified areas where there are salinity problems that could do with some tree planting, and they will have also identified that you cannot put more plantations in because of the interception and the overallocation, so at least you have got some data behind your decisions. The other point I would make is that you are saying that they have dealt with the ones that are most allocated now, but just because others have not been allocated does not mean that they will not be vulnerable if you plant out the entire catchment.

Mr Matthews —The way the National Water Initiative is expressed talks about overallocated systems—they deserve the most attention—fully allocated systems or approaching fully allocated systems. I think the third category picks up the question you have just asked.

Senator HEFFERNAN —My old mate up there in the sky would go nuts.

CHAIR —As long as he goes nuts when he is called.

Senator HEFFERNAN —The planning for some of our river systems has been desktop; it has not been ground in by environmental science. Regarding the Warrego River, that thing today in the news about Toorale is a complete farce because there is water resource planning which is not based on environmental science. It is rubbish.

CHAIR —Senator Heffernan, I will pull you back. The—

Senator HEFFERNAN —But, look, we are talking about the credibility of water planning.

Senator MILNE —Exactly.

Senator HEFFERNAN —They are in some instances a joke. The Warrego plan is a joke because it is not grounded. We had Mr Spencer and the bureaucrats on this set-up the other day—and you can see all the waffle that went on—but at the end of the day they had an allegedly science based assessment, the same as the CSIRO’s and Tom Hatton’s snapshot of the Balonne now. It is not based on environmental science; it is based on a guess at the flow rate in the future. That is all it was based on. We want a full scientific investigation.

CHAIR —Your question, Senator?

Senator JOYCE —Chair, I do want a chance to speak when you—

CHAIR —Actually, Senator Milne has the call. We have five minutes left, Senator Milne.

Mr Matthews —Could I comment on what Senator Heffernan has said?

CHAIR —Senator Joyce, I will come to you.

Mr Matthews —I do not agree with the colourful language you have used, but the National Water Commission has also said that Australia needs to be better at its water planning, including the science.

Senator HEFFERNAN —No-one is going to disagree with that.

Mr Matthews —We do not back away from that. It does not make us very popular but it is something that has to be said. I have to say, I do not go as far as you went.

Senator JOYCE —Not many people do.

Senator HEFFERNAN —No, and you would not expect—

CHAIR —I apologise—it is 5.30 and we were going to finish at 5.15. Senator Heffernan, have you finished, because Senator Joyce is waiting?

Senator HEFFERNAN —Could I just raise one other point. I presume the climate change mob are up next—are they?

Senator MILNE —Yes.

Senator HEFFERNAN —We want to look at the modelling that is being used by the department to arrive at the proposition that only at about $80 a tonne for carbon will this transfer itself into prime farming agricultural land. Obviously we have received a lot of new evidence today on perennial pastures and their carbon sink capacity, which has rewritten the rule book in a way. You do not—

Mr Matthews —I cannot add any value to that, but I am sure you helped the Department of Climate Change by telegraphing your first question.

Senator HEFFERNAN —I did. They came to my office the other day. I am just reminding them.

Senator JOYCE —I am just making sure I have the call. In referring to groups, who does the National Water Commission actually liaise with? Which other bodies do you liaise with in coming to your determinations?

Mr Matthews —The National Water Commission is an independent statutory body. When we are making our assessments about how the states are going in implementing what they promised to do in the intergovernmental agreement, called the National Water Initiative, we hear from them, we hear from experts, we take advice from the CSIRO and others—

Senator JOYCE —The Murray-Darling Basin Commission?

Mr Matthews —No—not so much the Murray-Darling Basin Commission. We try to spread our favours around a bit.

Senator JOYCE —So when you are liaising with these groups, what sorts of parameters do you use to decipher the run-off of a certain area, rainfall versus soil type versus contour of the land and how this affects vegetation types—and that is—

Mr Matthews —I am sorry to interrupt you but that is not the sort of work that we do. Our role is to look at how state governments have gone about what they have promised to do in the National Water Initiative. Their promises are a level or two up from where you are. They promise to introduce a method of handling interception. They promise to introduce a statutory regime for planning. They promise to introduce a framework for water trading, and so on. Those are the sorts of things that we check—

Senator JOYCE —Then I will take it down a level or two. With regard to someone putting in a government sponsored forest, which is what this will be, how are you interposed in that process? Do you really care whether it gives off less or more water? Is that really any part of your brief?

Mr Matthews —The answer is no. What we—

Senator JOYCE —So what do you want to talk to us today about?

CHAIR —Senator Joyce, you might not be able to hear Mr Matthews. He was just trying to answer you further there.

Mr Matthews —Thanks, Chair. I was trying to say that our role relevant to this is to make public assessments about how governments are delivering on what they promised in the National Water Initiative. What they have promised are processes and policies and legislation, and we check that they have delivered. We do not check on the nitty-gritty outcomes because otherwise you would have a state government regulating and then an independent Commonwealth body coming in and regulating as well, which is bad government.

Senator JOYCE —I will be direct then. Is there anything in the legislation underpinning carbon sink forests where you have a working relationship in the formulation of the policy as far as water goes?

Mr Matthews —We have no role in developing the guidelines that you are looking at and the piece of legislation that you are looking at. But—

Senator JOYCE —Do you have any role in reviewing or assessing or ascertaining whether or not the modelling is correct?

Mr Matthews —No. Our interest in this inquiry is: how is the National Water Initiative intergovernmental agreement relevant to this, and would this impact negatively or positively on the NWI?

Senator JOYCE —With the greatest respect, it appears that it is not relevant to anything that is in your role. If it is, where specifically is it relevant?

Senator HEFFERNAN —What he is really asking is: are we wasting your time and are you wasting our time?

CHAIR —Senator Joyce, Senator Milne has just asked if she can ask a question on this.

Senator JOYCE —I really am trying to flesh this out. I would not be as abrupt as Senator Heffernan but I am trying to work out what question I can possibly ask you that is of any relevance that you can answer.

Senator MILNE —Can I try one, Barnaby?

Senator JOYCE —Yes, fire away.

Senator MILNE —Mr Matthews, in your presentation you said there was a slow rate of rollout of completed plans, that it was patchy around the country. Could you give us a state-by-state analysis of where the states are in rolling out their water plans? As Senator Joyce has just said, these guidelines require those water plans to be in place to be meaningful. So could you tell us, state by state, where we are up to with the water plans?

Mr Matthews —I could leave with you a summary of how each state is approaching water planning which I think you would find a useful document. Your question goes to a bit more detail than that, which is: state by state how each water plan is going—

Senator HEFFERNAN —We are asking you who is the best and who is the worst.

Mr Matthews —We have some material on that but I have not got a clearance back that it is accurate for one state. So I am reluctant to table that because it may—

Senator JOYCE —I will just ask one question before you go which is relevant exactly to this. Is there any licensing arrangement in New South Wales or otherwise with regard to overland flow?

Mr Matthews —I would prefer to take that on notice.

Senator JOYCE —While you are taking that on notice, could you also take on notice whether there are any licensing arrangements as part of the ROP overland flow in Queensland, on overland flow in New South Wales, on overland flow in Victoria and on overland flow in South Australia.

Senator HEFFERNAN —I am pleased you got that one in, mate, and it is all a disgrace.

Senator MILNE —I would appreciate it if you could table that progress on the water management plans in each state because it goes to the heart of where this could be relevant or not. In the guidelines it says:

Carbon sink forest establishment should be based on regionally applicable best practice approaches for achieving multiple land and water environmental benefits.

Compliance with this guideline may be achieved by ...

                …            …            …

  • establishing carbon sink forests in ways to avoid any significant negative impacts on water availability;

How would a company be able to assess whether it was establishing a carbon sink forest in a way which avoided any significant negative impacts on water availability if there were no hydrological data or no water plan for the catchment in which they wish to plant?

Mr Matthews —By and large if there is no extant plan then that catchment is well below fully allocated, so the risks are low, particularly for a small interception that carbon sinks would cause. In cases where there is a plan in existence, it is more likely to be at fully allocated or approaching it and in that case they would simply need to observe the plan in the same way that any other user of water would need to observe the water-sharing plan.

Senator MILNE —That is the point though. You just keep coming back to saying that you do not expect it to make a difference because it is going to be such a small area. That is contested. We absolutely contest that that will be the case because this is being done in conjunction with a range of other things. What you are actually saying is that compliance with this guideline will occur in the absence of any data on the hydrological system or whatever just simply on the basis that, if there is not a plan, we can assume that it is not overallocated therefore it will be all right.

Mr Matthews —You say that is what I am saying.

Senator MILNE —What did I just say that is not what you just said to me?

Mr Matthews —I have said a part of that. I have said that it is important to get more data including hydrological data, that we are not happy with the quality of data all across Australia, but that does not apply uniformly. I have also said earlier that there will be many areas where because it is on marginal land, no hilltops and so on, that it will be a win-win situation.

Senator MILNE —But with a carbon price that is lucrative where in these guidelines does it require that the land needs to be marginal?

Mr Matthews —It does not require that.

Senator MILNE —Thank you.

Mr Matthews —But my expectation of the pattern of incentives that will be set up is that people will still find it more productive to use their best land for higher yielding more economic purposes.

Senator MILNE —But doesn’t that entirely depend on the carbon price.

Mr Matthews —It does.

Senator MILNE —So the debate here is that essentially the price of the carbon should be separate from this because we should be putting in place guidelines that protect our catchments regardless of the price of carbon because the higher it goes the greater the threat to the catchments. If you are wrong, and ABARE is wrong, and the carbon price is more than $14 then there is nothing here to prevent the best land and any catchment without a plan being planted out.

Mr Matthews —You said the higher the price goes the greater the threat to the catchment. My argument has been the higher the price goes the more important it will be that there is good planning because the quality of that plan is the way that we will manage that.

Senator MILNE —That is the point I am trying to make to you about trying to rewrite these guidelines to make sure that you cannot get the benefits without the plans being in place. I agree with you, the data is critical. But we do not have the data in a large part of Australia.

Mr Matthews —And I can only say again that there is a risk, I think, if you attach that condition to it that you will have the perverse outcome of having these forests in the worst places, not the best.

Senator HEFFERNAN —Let us just take up Bombala or Craigee. Do you know where Craigee is?

Mr Matthews —Yes.

Senator HEFFERNAN —In respect of those plantations that are going in now, there has been no consideration given to interception. They are absolved from an environmental plan, and you are saying that your job is to make sure that they get all that right for interception. They are not required to do anything about interception. They have absolutely buggered the landscape up there. Streams that, 15 or 20 years ago, you used to be able to catch a trout from no longer run, and there is no environmental plan. The only trick is to buy the farm without the neighbours finding out, and the first the neighbours know about it is when the bulldozers arrive to start ripping it up.

Mr Matthews —The arrangements in the NWI have different timings. It has been put to the committee before that states have to bring their interception arrangements into place not later than 2011—

Senator HEFFERNAN —So you are repeating—

Mr Matthews —Let me continue, please.

Senator HEFFERNAN —It is just bureaucratic twaddle.

CHAIR —Mr Matthews is answering your question, Senator Heffernan. Mr Matthews.

Mr Matthews —That is in 2011. The plans for overallocated or near overallocated systems were to be completed by the end of 2007 and plans for systems not yet approaching fully allocated are to be completed by the end of 2009. So there will be—

Senator HEFFERNAN —So you do not think the Murrumbidgee system is overallocated?

Mr Matthews —I have a view on that, but I do not think I should be offering it.

Senator HEFFERNAN —That must mean that you do not think it is overallocated.

Senator JOYCE —It is relevant information you will give.

Senator HEFFERNAN —That could only mean that you do not think it is overallocated.

Mr Matthews —You are saying that, Senator Heffernan.

CHAIR —You do not have to, Mr Matthews.

Senator HEFFERNAN —My point is that this is happening—

Mr Matthews —That is not what I am here for.

Senator HEFFERNAN —But it is pertinent to this. You are supposed to be the guardian at the gate of all of this stuff and you are not guarding the gate because plantation forestry is going in today in New South Wales in high rainfall areas without an environmental plan and without any consideration of the interception effect. Unlike in South Australia—and it does not come into effect for years in South Australia, anyhow—it is without any need to square off or have contra—

CHAIR —Do you have a question, Senator Heffernan?

Senator HEFFERNAN —I am making the point that you cannot just rely on this bureaucratic system.

CHAIR —I do not think Mr Matthews and Mr Radcliffe and the rest of the committee need preaching to. If you have questions, I urge you to ask them.

Senator HEFFERNAN —Yes, well, this is how we all learn.

Mr Matthews —But those areas—

Senator HEFFERNAN —With great respect, Ken, this document is very nice, but it is a meaningless motherhood statement—

CHAIR —Senator Heffernan, I ask you: do you have any questions? I take it that you do not.

Senator HEFFERNAN —By your predecessors it was called a very generous generic document. It does not compel anyone to do any damn thing.

CHAIR —On that, are there any further questions of Mr Matthews or Mr Radcliffe?

Senator HEFFERNAN —What I want to share is that these are the guidelines under which we are going to implement this legislation.

CHAIR —That is why I am urging you, Senator Heffernan, to ask the questions.

Senator HEFFERNAN —Would you agree that it is generic?

Mr Matthews —I would agree that it is generic. But the point that I have been making about that is that we are pleased, from the commission’s point of view, that it does pick up the same commitments that are in the National Water Initiative.

Senator HEFFERNAN —But your commitments under the National Water Initiative are not preventing anything. I mean, if you go to upper Gobarralong, you will find they have just planted out a swamp, much to the dismay of everyone. You know where Gobarralong is. You blokes did nothing to prevent that. I know what the answer is, but no-one seems to care. There does not seem to be a plan.

CHAIR —If you would ask a question we could all find out what the answer is, Senator Heffernan, so I would appreciate that.

Senator HEFFERNAN —Why would you not have intercepted or made some commentary on that? That is deadset interception of run-off.

Mr Matthews —That is the same situation I was talking to Senator Joyce about. We are careful not to set ourselves up to second-guess every regulatory decision that is made by every state government. That would be a bad governance outcome.

Senator HEFFERNAN —I understand—

Mr Matthews —What we do—if I could just finish—is check that each state government has delivered on what it has promised in the NWI. We do not check what is happening at ‘Bringyagrogalong’.

Senator HEFFERNAN —The trouble with that is that you end up with a generic outcome which is meaningless. What is happening now against the background of climate change—losing a thousand gigs from the forests—

CHAIR —You have one minute, Senator Heffernan.

Senator HEFFERNAN —and 800 gigs net from plantation and 3,500 gigs from climate change—is that the Murray-Darling Basin is walking towards a doomsday scenario in the future. And we are still here, playing around, letting them put plantation forestry at the top of the thing. I know it has got nothing to do with this and I very much understand that this is not about MISs. This is a completely different proposition. If it went where everyone thinks it should go, it would not be a problem. But there are no guidelines to make it go there.

CHAIR —We are out of time. Do you have any further comments, Mr Matthews?

Mr Matthews —No, I do not have anything else to add.

CHAIR —Thank you for your evidence.

[5.30 pm]