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Rural and Regional Affairs and Transport References Committee
10/09/2012
Management of the Murray-Darling Basin system

COSIER, Mr Peter, Director, Wentworth Group

STUBBS, Mr Tim, Environmental Engineer, Wentworth Group

WILLIAMS, Dr John, Member, Wentworth Group

 

[16:21]

CHAIR: Would you like to make an opening statement.

Mr Cosier : We would like to reflect on the fact that the CEO of the New South Wales Irrigators' Council just said the National Water Initiative was the blueprint for water reform. He talked a lot about property rights. What he did not talk about was the second part of that social contract, which was to return over allocated rivers to sustainable levels of extraction. We supported the National Water Initiative as did the irrigators in 2004. The second part of the contract has not been honoured and that is why we so fundamentally oppose the draft Murray Darling Basin Plan. We have sent you a copy of our latest evaluation of the plan. In that we had five further points of criticism of the fundamentals that underpin the plan. We are happy to take questions on that submission.

Senator XENOPHON: One of the reasons we are back is over the Nimmie-Caira water buyback. You have heard the line of questioning of Senator Heffernan, which I thoroughly endorse. Do you have a view on that? You heard what the New South Wales Irrigators' Council and the National Irrigators' Council said: that they are acting within the rules. Do any of you and in particular, you, Dr Williams, given the work that you have done, have a particular view of the Nimmie-Caira water buyback and, perhaps in broader context, how the rules operate?

Dr Williams : First and foremost, I think this is a very good illustration of a very important matter that in the current plan has not been properly resolved—that is, the diversions of floodplain water is an issue right across the plain. In the original guide to the basin, that matter was right up front. That matter has not been dealt with properly and now we have got a whole lot of nonsense exercises, in my judgement, being done to accommodate a process that the current plan does not address properly—that is, if you have floods and you are trying to return the river to flood and retain its ecological function again then you must have floods. It appears to me that what we are doing, if these are the facts of the matter, is actually buying back our flood water to flood. I think that is an issue that is more general than this particular one right across the floodplain. A really good Murray-Darling Basin plan should deal with that matter thoroughly and properly, and it does not.

Senator XENOPHON: There is not so much tension but that issue about those who have been early adopters of water efficiency measures. As I understand it, you have done some work on how you get the best value in maximising beneficial impacts for communities?

Do you see it as a combination? We have heard from the irrigators, who said it is a combination of factors in terms of water buybacks and water efficiency programs, and it has to be targeted. I think that fairly sums up what they have said. What does the Wentworth group say about maximising the beneficial impact on communities?

Mr Stubbs : I think everyone would agree that we want to get this reform done and get the best outcome not only for the environment but also for the communities of the basin. So it is about looking at how you spend the $8.9 billion most effectively to do that. The Wentworth group has done quite a lot of work in the past to show that you get the best bang for your buck with buyback. You would then have significant money left over, so you could buy the water. If you were to get 4,000 you could buy that with about $6 billion and you would still have a significant amount of money left over to help regional communities adjust to that change.

One of the things that has been pushed strongly for why infrastructure projects should be favoured over buyback is that they have been seen as being more beneficial to regional communities, and that has been quite a strong line that has been pushed by groups advocating for that infrastructure investment. Some new work that was released not so long ago—and I have some extra copies here if people would like a copy of it—uses a model called 'term H2O' to do some dynamic regional modelling and the economics of the basin. A really important finding at the end of that is—

Senator XENOPHON: Who wrote this?

Mr Stubbs : It is by Glyn Wittwer and Janine Dixon from the Centre of Policy Studies at Monash University.

Senator XENOPHON: Can you table that?

Mr Stubbs : I will table a copy. Basically, one of the findings of that report is:

As an instrument of regional economic management, infrastructure upgrades are inferior to public spending on health, education and other services in the basin. For each job created from upgrades, the money spent on services could create between three and four jobs in the basin.

This harks back to what Wentworth said in a 2010 report: we need to be really smart about what we are trying to achieve here. It is about achieving a healthy environment and healthy regional communities as best we can with the $8.9 billion. Anyone who advocates either of those should be looking at reports like this and being very honest about where that money should be spent, and whether spending on irrigation infrastructure is really the best investment for those communities. This report seems to indicate that maybe there are other options out there.

Senator XENOPHON: But the converse to that is that you also have to be careful of the Swiss cheese effect, isn't it? With buybacks, how do you deal with that? What is that critical mass in terms of water infrastructure?

Mr Stubbs : Yes. Buybacks need to be strategic and we need a good plan. The Wentworth group said in one of our statements on the basin plan not so long ago that we need to throw the plan out, stop the infrastructure upgrades and stop the buybacks until we get a proper plan in place and get the process underway with a plan that clearly defines what water is needed from where and how we are going to have a healthy Murray Darling Basin.

Senator EDWARDS: With your indulgence, Senator Xenophon, on your line of questioning, how do you pick winners to avoid the Swiss cheese effect? You say, 'We need a plan,' but—

Mr Stubbs : First we need a plan that clearly articulates how much water we need for a healthy Murray Darling Basin. This plan does not do that, so we need a plan that sets that number down as the science is based. We need to understand where that water needs to come from, which share comes out of each catchment and what contributions to the downstream flows are needed. Then you have a process that puts all that on the table and uses the money that is available to get the best outcome with a mix of strategic buybacks and spending on—

CHAIR: What troubles me greatly about this is—you have seen the Castrol ad years ago that said, 'Oils ain't oils.'

Mr Stubbs : Yes.

CHAIR: Well, water ain't water. In the 2,750 gigs there does not seem to be any modelling done on how much of it is terminal water, how much of it is supplementary, how much of it is general purpose and how much of it is high security. There would be a hell of a difference in the outcome depending on the variation in the water.

Mr Stubbs : The model the authority has is the best model we have; it is just a shame the authority is not using it to find the right answers.

CHAIR: What is the breakup of the water?

Mr Stubbs : It comes back to that issue of entitlement, its level of security or cap factor, as they call it. If you have a supplementary entitlement it might have a cap factor of 0.4. So if you buy a gigalitre of supplementary water then when you put that in the model it will only count as 0.4 of a gig.

CHAIR: I understand that the 230 gigs at Tandow was 11 gigs at the Murray. Why did we allow supplementary water to be tradeable?

Dr Williams : As I said, I think the issue of rules based water that is built in and supplementary water—and the way that is managed for the environment and converted across to tradeable entities—is one that we just did not get right. This plan was an opportunity to do that.

CHAIR: I agree with that. When you get four inches of rain at Gundagai and you get a sup flow and if you get four inches the next night it become a flood flow, and when it gets down to the Redbank Weir somehow they can define one from the other!

Dr Williams : It illustrates, to my mind, the nonsense we have. When we have the legal people take what this current plan has in place and put it into legal language, which it will be, we will have a muddle-time tangle, because of the issues you raise. I think we need a plan that recognises the flood plain and recognises how you use supplementary water, rules based water and water for entitlements, and build that sensibly into the plan. It currently does not.

Senator XENOPHON: Dr Williams, further to that, you are saying, using the Nimmie-Caira as an example, that it is fundamentally flawed because of the way that it gives a weighting to the water being converted into an entitlement.

Dr Williams : And we do not understand that weighting. I think the definition of 'supplementary' and 'rules based water' in terms of the environmental outcome and how you feed that back into purchased water is quite unclear. It needs to be clarified. This is an example of what happens with muddled thinking: you just add muddle on muddle.

CHAIR: And the choke between Maude and Balranald—which is why they use the sup down the Nimmie—

Dr Williams : I know it well.

CHAIR: is a natural occurrence.

Dr Williams : Absolutely.

CHAIR: You are not going to be able to shepherd it down the river. And you will not be able to get it through the back of Yanga.

Dr Williams : One of the issues that has not been dealt with in the current plan is the recognition that we have designed the Murray Basin flood plains to service delivery of irrigation water. If we want to get ecological function back with the water we have to undo some of that. The actual channelisation in, say, the Milawa, which I know well, is such that the water will go straight through the forest. It is not going to wet it, because is it designed to go through the forest to get it through the Wakool and further down the system. So we have to rethink the engineering of the basin to get the ecological outcome as well as maintain the irrigation system. And that is not dealt with in the current plan.

CHAIR: The difficulty I have—I have been talking to the New South Wales government—is that somehow they have to come up with a certain amount of water to put back. They said, 'If we can get this water, even though it is a bit strange'—it is sort of cooking the books with the water buy-back—'we will do it.'

Mr Cosier : Yes, but the issue with that is that the water they are being asked to give back will not fix the river in the first place. The way they are being asked to get it back will not fix the river. It is back to Senator Edwards's question. The basin plan needs to describe how to restore the health of each of the rivers in the basin, not just the South Australian end of the Murray. And in each of those you have a series of indicators or standards by which you can make that judgement. And then you can apply a volume to that judgement. That is the logical process that you go through to build a basin plan. Then, as Mr Stubbs was referring to, you take the $10 billion that the government has allocated, to provide the mechanism for doing that. We have always advocated that the most efficient way to do that is to work with local communities to decide whether it should be buy-back or infrastructure, against the target which will restore the health of the river.

The basin plan does not tell you how much water we need for South Australia, let alone for each of the other catchments. While this process has been going on, now, for two or three years, we have had the Commonwealth government—a separate arm of government—out there buying water. They are out there signing contracts for what we do not know, because there is no fundamental plan under which to base those purchases or contracts.

Senator HANSON-YOUNG: Mr Cosier, Dr Williams and Mr Stubbs, I would like to know your view on the adjustment mechanism. I have your paper here. I guess you have gone through it quickly. The reason I am concerned is that the minister is going to table legislation this week in parliament to amend the Water Act to allow this adjustment mechanism to exist. Why on earth would we need to amend the Water Act to allow this adjustment mechanism to exist if indeed it was going to be doing what we need it to do, which is returning enough water to overcome this overallocation?

Mr Cosier : We have not seen the draft bill. Mr Stubbs would be best placed to give you a description of what this issue is.

Mr Stubbs : We have had a brief look at the adjustment mechanism. It is quite complex and written in a fairly complex way. For me, at the end of the day, when you get water back through taxpayer spend, it either falls down on the side of going to the environment or it falls down on the side of going for extraction. It can do only one of the two. At the moment, under the adjustment mechanism, it appears that when the taxpayer pays to upgrade irrigation infrastructure—so once the water has come out of the river—any water gained through that upgrade will be given back to the river. So the taxpayer is effectively paying to upgrade infrastructure to make it more efficient, and the water gained will go back to the river. On the other side of the ledger, if any activities are done instream in the river—for example, reduced evaporation but also environmental works and measures where you put a weir in the river and push some water up onto the flood plain—firstly, you get nowhere near the ecological outcomes that you would get from a flood going through the flood plain, so you are going to get substandard outcomes. The taxpayer will pay for that, but that water is effectively accredited to the irrigation side of the balance sheet. The main concern with the adjustment mechanism is that what we are going to see there is that the taxpayer will be paying, again, for water to be attributed to the extraction side of the balance sheet. We feel that if the taxpayer pays for the environmental work and measures, whatever the function in the river, that water should come down on the environment side of the balance sheet.

Senator HANSON-YOUNG: So the adjustment mechanism does not allow for an increase of water buybacks if indeed there is seen to be the ability for more water to be given back?

Mr Stubbs : From what I can understand it is mainly focused on either upgrading irrigation infrastructure or instream works and measures.

Dr Williams : I wonder whether your question is with regard to the economics opportunities. We have a major social adjustment issue to face up to and the current plan does not do much about that other than offering irrigation infrastructure and, as our paper we have tabled shows, there are many other ways, after you have bought the money back, to help our community to adjust. On many of the cost-effective measures, as the Victorian study and this study show, you can do it better probably by looking at health services and other functionalities so that we can grow these communities into a better future, and we are not dealing with that issue at all in the current plan.

Senator HANSON-YOUNG: Mr Cosier, you said that we are not doing what we need to tackle the overallocation issue. The level is set at 2,750. If it is adjusted up or down based on this adjustment mechanism, are you concerned that, even within that adjustment mechanism regardless of the money that is going to be spent by taxpayers, it is still not going to be enough to do what is needed for the river?

Mr Cosier : Our primary concern is that parliament is being asked to make a decision on a basin plan based on the Water Act 2007, which is to turn overallocated rivers back to sustainable levels of extraction. Our primary concern is that parliament is not being provided with the scientific evidence on which to make an informed decision. Our primary issue is that this parliament is being asked to make a decision on a basin plan that is meant to stand the test of time based on the best available science we have today, and it is not being provided with that information. That is our fundamental objection to the draft plan. Within that objection, of course, is that a guide to the basin plan was released two years ago which presented the best available science as it was then, and it showed that a substantially higher number is required to restore the health of the river systems. Yet this parliament is being presented with a plan with a much lower number, with groundwater extraction increased substantially and no reasons put forward as to why these numbers have changed so dramatically.

Dr Williams : I think that is the terribly important point. The scientific basis for the number that is put before the science is not established. What was established was the range from low level of confidence to high level of confidence in the first plan—the actual guide to the plan. But we have not had a proper scientific analysis subsequently to say what are the water flow regimes and amounts that this river system needs to return it to a sustainable condition. That number has not been done. There is no science to stand behind the 2,750 saying, 'This is what the river needs.'

Senator HANSON-YOUNG: Where did the 2,750 figure come from?

Dr Williams : I do not know. We would love to know.

CHAIR: The 2,750 figure is a political compromise figure, not based on science.

Dr Williams : I am pleased you said it, Senator. That is certainly the feeling I get.

CHAIR: It is actually true. No-one wants to own up to it, but even Craig Knowles acknowledges it.

Dr Williams : The point is that, as a scientist, it is a nonsense. We do not know where that figure comes from. There is no scientific documentation or analysis or peer review or anything. My academy is horrified to know that we are going to spend a lot of money without the best knowledge applying to what this river system needs. In addition to that, we are not using the best economics and social science to know how to help the people of this basin adjust to the huge task of adjustment. That is awful.

Senator EDWARDS: Just on that, you would be equally critical if the figure was 500 gigalitres or 4,500 gigalitres.

Dr Williams : Yes. As a scientist you want to know the basis, and that it has been peer reviewed, that it is substantial and will stand scrutiny. If you do not do that as a scientist you are not going to get there.

Mr Cosier : If the science said we could do it for less, we would be delighted.

Dr Williams : Yes.

Mr Cosier : But the science suggests that we cannot do it with what we are being presented.

Senator HANSON-YOUNG: I would like to ask about groundwater extractions because last time you presented to this committee there was no justification from the authority as to why the groundwater extractions had been in there. They have now revised them back a little bit. Are you satisfied that the increase in groundwater extractions is justified, and if so on what basis?

Mr Stubbs : We have had a pretty comprehensive look at that huge increase and we released a submission asking a lot of questions about the science justifying that increase. We could not see that science. The authority put out a subsequent document but again it really lacked the details and proved to have some very dubious assumptions in it—assumptions that were made to get to those final numbers. It was very interesting that a number of weeks after that version a subsequent version of the plan came out and we saw a drop of around 1,000 gigalitres in those groundwater numbers. Craig Knowles said at a media conference, I think, that he got the boffins in a room and looked at the numbers. That translated to a one-day workshop with a handful of groundwater experts and others. The big concern is that we are making decisions about the future of the Murray-Darling basin through a one-day workshop. It is an interesting way of going about public policy, particularly when we are spending huge amounts of money and time modelling the surface water and saying how much water needs to go back in there, and then completely separately having a one-day workshop to adjust the volumes of groundwater by around 1,000 gigalitres. And the two are connected.

CHAIR: It had to become involved in gas extraction somehow, though.

Mr Stubbs : I do not know what the answer is. That is a big area of concern. It comes back to that same point of just wanting to see peer reviewed, justified science for why these numbers exist. A subsequent point to that is the constraints issue, which is being pushed very strongly as the reason why 2,750 is the number, and has to be the number. Interestingly, this new basin plan has the requirement that a constraints strategy become developed by the authority to be released 12 months after the basin plan has come into force.

CHAIR: Regarding the 2,700-odd gigalitres, they are actually going to mine the groundwater in the Wimmera.

Dr Williams : That is true. I just want to be absolutely clear that groundwater extraction is now set at something like 1,700 gigalitres of additional water, and of course you are well aware that the current extraction in the basin is about 1,768 gigalitres. So that is an absolutely huge increase, to 1,700, with no scientific justification and basis that would pass the test. Then we have had 1,000 on top of that, previously, and that has reduced—after a one-day workshop!

CHAIR: Would you agree that depending on where the extraction point of that groundwater is it could have a hell of an influence on the river flow?

Dr Williams : Absolutely. Tim, you might correct me, but most of those alluvial systems that this 1,700 is coming from are connected to the base flow of the river systems. So, you are borrowing water today that you will not have tomorrow.

CHAIR: As I often say, the bore at Oura that supplies Junee, Temora and West Wyalong—I declare an interest as I am from Junee—is 86 per cent river water coming out of the groundwater.

Dr Williams : That is just basic hydrology.

Senator HANSON-YOUNG: Can we go back to the issue of the constraints. So there is going to be a strategy document released, 12 months after the plan, to deal with the constraints issue, except that once this plan is passed by the parliament it is locked in. So, even if the constraints strategy shows that actually we could deal with these constraints and then let more water down, it does not matter because we have already signed off on it.

Mr Stubbs : It is game over red rover. It comes back to the whole plan. When the 2,750 number came in, the plan was sold by the chairman of the authority as being a first step. There had been a 2015 review and it had been done through a consultative process that brought the whole community along. That is gone and we are left with the 2,750. We still do not know what these constraints are. To me they are a critical part of what the parliament needs to make a decision about how best to spend the $8.9 billion to get the outcome we are striving for of a healthy working river and healthy regional communities.

Dr Williams : The point being that the issue we have been discussing today about the floodplain water is just one of the issues that is tied up with the constraints and how you manage to flood the system to bring about the flood out onto the floodplain and the flood back into the river system, the re-establishment of the ecological food webs and the health of the system and the movement of salt. All that is connected. It seems to me that this plan is absolutely flawed because it does not deal with the constraints issue—the re-engineering of the floodplains so that channelisation is in a way that you can flood things and that you can get that function back. None of that is in the plan and therefore to have these sorts of little bits of add-ons is really going to create a legal mess for our future people to resolve. I plead with you to draw to the attention of the parliament that we are setting up something that will be a muddle to unravel for generations.

Senator HANSON-YOUNG: Minister Burke gets quite defensive and talks a lot about how the numbers do not matter. He is not preoccupied with the figure, he wants the outcome. What is your response to that?

Mr Stubbs : Basically, the models are very complex. They are built upon key sites and getting various outcomes with different floods at those sites to get the ecological outcomes to move the salts and all of those things. You can always link back the outcome to a number. The two cannot be separated. You cannot say, 'I just want the outcome, don't tell me about the number. I just want hamburger, don't tell me about the price. I am not bothered about the price, I just want the burger.' This is why we have an authority, this is why we have built models and have done the science. It is so that we can understand outcome and link that back to a volume of water—

Senator HANSON-YOUNG: How do you get the outcome if you do not have the volume.

Dr Williams : You cannot.

Mr Stubbs : If you do not know the volume you are not going to be able to say that this is the outcome we are going to get. I think everybody wants to understand those outcomes, but you have to link that back to a volume of water. You cannot have one without the other.

Dr Williams : You cannot flood a floodplain. That is a very simple thing. A floodplain has a certain area and it requires a depth of water. That is a volume, and you cannot get around that.

Senator HANSON-YOUNG: Do you think he has not been clear about what outcomes he is prepared to cop?

Mr Stubbs : There are outcomes in the plan already, and the CSIRO review of 2,750 said the majority them are not achieved. They are the outcomes for a healthy working river. You can plot them back to numbers. That is what the authority have been doing for two years, and spending millions and millions of dollars of taxpayers money. There is a whole lot of information there that links outcome to numbers. If you ignore that you then effectively ignore the work of the authority.

Senator HANSON-YOUNG: Even if you wanted to ignore the figure, the fact is that the outcomes are not even met.

Mr Stubbs : No. The majority are not with 2,750.

CHAIR: In the make-up of 2,750 gigs I still cannot get it through my thick head how if you are buying supplementary water—a lot of which is actually converted and we cannot work out where the conversion line is for floodwater in certain flows, but they declare it supplementary water even though it is floodwater because it is combined with floodwater—won't that be an entirely different outcome in terms of what you can do with the water if it were general purpose?

Mr Stubbs : Yes. When they do the modelling, the model does not want to flow an average volume down the river all the time. That is not what it is about. It is very sophisticated. It looks at adding peaks to get overland flow and looks at adding tails to inundate areas for longer periods. Once you have your breakdown of how you want to get those outcomes and what is the best way, you will then have some clear picture of what sort of water you would need. You might be able to say: well, to achieve all these events, we only need to achieve them when it is flooding already because we want to put a top on a peak or a tail on a flood. We may be able to use general security water for that or, potentially, even supplementary if it was in the right place at the right time. However, for other events you might have to say: well, we probably need high-security water to make sure we can be confident of achieving that event, because there will not be any supplementary water around at that time, potentially, and we will need a certain amount of high security in the bank to make sure we can hit those events, because they are drier time events. I am not sure how the authority has done it, but I imagine you would have to have a spread of entitlements to be able to hit all your targets.

CHAIR: The lower Murrumbidgee floodplain is a good example. For a lot of years the top end guys get the water and the bottom end blokes don't.

Dr Williams : Taking your argument, and I think it is not being properly thought through and certainly not in the plan that I have understood. If you had all your water in one form or the other, the 2,750, then you could not do what you are doing. It has to be real water that you can actually flood and move water around the system. That is what the sustainable diversion limit has to be. Sure, it will be made up of different forms of water, as Tim says, in our current system but I think a really good plan would have simplified how we look at that water and how we might use it to achieve our environmental outcomes. That has not been done. It has tended to work with the status quo and assume we have the muddle and we will just keep on doing the knot.

CHAIR: To the point where New South Wales says: well, the government does not agree to this Nimmie-Caira buyback thing; we won't sign up.

Senator NASH: The environmental water holder—the 1,400 gigs I think it has at the moment, give or take—how much of that has actually been utilised for the purposes of improving the environmental assets?

Mr Cosier : We do not know, Senator, sorry.

Senator NASH: Am I correct that your target figure is still that 4,000, is that correct?

Dr Williams : We think the science evidence points that way every time you do it. The answer to your question is: I do not have the data to know exactly how the office of the water holder has used that water. One of the problems in getting the ecological affect that we need is that we currently have our floodplains so channelised that it is hard to get it where you need it.

Senator NASH: On that, if you are unsure as to where the water that the environmental water holder currently holds has been utilised, how can you have a determination around 4,000 as a figure? If you do not know where the water that we currently have in the environmental water holder is being utilised and what benefit it is currently—that is the real tangible stuff we could measure—if you cannot measure that, how can you still have the theoretical figure of 4,000?

Mr Cosier : It tries to answer Senator Heffernan's question, too. As I said before, our fundamental objection to what you are being presented is that it is not based on science. The science we do know suggests 4,000, but we do not know that it is 4,000. We know that the science that is in the public domain suggests that it is 4,000. That is the first step. That is sort of leading to Senator Heffernan's questions about what are the rules and what do you buy off the rules. Let's think of the Basin Plan as having three steps in its process. The first step is to use the science models that CSIRO and the Murray-Darling Basin Authority have. They will give you an estimate of the volume required for each river system to restore the ecological outcomes. The second thing then is to set the rules to achieve the environmental outcomes that you have identified and you do those inside each of those catchments.

Once you have set the rules based on the volume that you have been told is needed to restore the health of the system, you would then go in and either buy water back or invest in infrastructure based on delivering that set of rules. So the reason that we cannot answer your question is that we do not know what the volume needed is or what the rules are to deliver that volume. Hence, even if we were to research what the 1,400 gigalitres are for, we do not have the other two fundamental pieces of information to help to answer your question.

Senator NASH: I get that, but I am just a little—

Dr Williams : So you say—

Senator NASH: No, just bear with me for one second—I have not got very long. I am just a little confused: I understand the modelling and what you are talking about running through, and that is the principle for everything. But here we have actual water that is being utilised for the purposes of benefiting the environment and you do not know what the real water benefit is that is being delivered at the moment. And you are not alone: we cannot get this answer out of the environmental water holder either. I just find it extraordinary.

Mr Cosier : With respect, you have just answered our question. We do not know.

Senator NASH: Yes, but just because they do not tell us does not mean that they are not telling somebody else.

Mr Cosier : They are not telling us.

Dr Williams : I guess that the best guide that you can get is to have a look at the health of the river now. The CSIRO has recently tabled another Sustainable Rivers Audit—earlier this year. If you look at that data it shows that all the rivers are currently in poor health. So what the 1,460 gigalitres have been used for, and how it has been done, illustrates very clearly that the way it is at the moment and the way we are doing it is not returning the river to health.

Senator NASH: How much of that water has actually been utilised? How much real water out of the 1,460 has been used?

Dr Williams : I do not have that figure in front of me. I am quite happy to do the homework and provide it to you—

Senator NASH: No, sorry—but given that you have just made the statement that the water is being used, surely you would want to know how much real water? My understanding was that it was only about half of that that had been used. Why is that? Why has only half of that water being used?

Mr Stubbs : The reason that only half of that would have been used—and, again, I have not seen the numbers so this is just from the science of the river and joining the dots—is that, basically, the last two years have been particularly wet years. So you have high flows. The water that we are trying to get back—or that should be got back—through the water reform is to replace the small- and medium-sized flood events that have gone out of the system. You would anticipate that you might not use your environmental water in a year of extremely high flows that water most of the floodplain. And that environmental water, if released, may not be able to get higher up the floodplain.

Where you will use it is in the drier years, when there is a smaller peak, is to increase the peak or to increase to tail.

Senator NASH: So it is actually not going to be able to provide that overbank flow?

Mr Stubbs : It will provide it in the small—the dams take the small- to medium-floods out of the system. The big floods, like we have had in the last two years, still get a lot of that overbank flow, as we have seen. They do not get as high as they once did, so we still have black box communities that did not get watered. But—

Senator NASH: But this particular water is not going to be able to contribute for that purpose. You are saying that it will do that smaller—

Mr Stubbs : Small and medium. It will still go over the bank. But now, say that these big events happen every 10 years; the system used to flood every two to five years, and that is what the floodplain, the red gums and the aquifers—all those things—have evolved to. We have brought that so it only happens on the longer cycle. What this water is really aimed at achieving is topping up those small flow events to happen on a more regular basis—trying to get them back to a level where they will tip over the floodplain and water the floodplain, water the red gums, recharge the aquifers and put a tail.

So that is the critical place: not so much topping up these really big events but reinstating the smaller and medium-sized floods in the system.

Dr Williams : You are quite correct, though, Senator: there is no ecological value in just pushing more water down the channel.

Senator NASH: Okay. I am trying to get my head around the construct. With the flood, how do you manage not to flood somebody's home or flood some particular area to get the water to where you need it to go?

Mr Stubbs : This is part of the challenge and the constraints. You have asked the question now. It is important that constraints are really made clear so we understand what type of flood events are going to flood someone's home, or are going to flood private property. At the moment that is not clear. So we have had two big natural events and we have seen what happened with them. The events that we are trying to reinstate are much smaller than those. It is really critical to understand how we best use this water to get the ecological outcomes, but recognise that there are some infrastructure limits in the system. The valves on Hume dam might actually limit the amount of water that we can release out of there at any one time.

Senator NASH: Backtracking slightly, have you asked the Environmental Water Holder to give you details of where that water is being utilised for the environment?

Dr Williams : No.

Senator NASH: Why not? Why would you not want to know?

Mr Stubbs : For me, the reason I do not feel as though it is critical to know that at the moment is that water will have its effect and its positive outcome over a longer term. As I said before, we have had two really wet years so I would not anticipate that the Environmental Water Holder could have achieved any great outcomes with the water in the last two years.

Senator NASH: Does that mean the 600 gigs have been wasted?

Mr Stubbs : No, not at all.

Senator NASH: How do we know? We do not know what they have done with it.

Mr Stubbs : I do not know. I agree, how do we know? Potentially, yes. I would anticipate that over the longer period and in a dry time they might be able to use all of the water or use it more effectively but I do not know. I am not in there. They have not talked to us.

Senator NASH: Dr Williams, you made a comment before about the regional communities and about growing the communities into a better future. What is your definition of a better future?

Dr Williams : I think where you have increased the opportunities and industries upon which they are based so they are not so dependent on a water based industry.

Senator NASH: Why is that better?

Dr Williams : Because it gives you a resilience against climate movements, change and variability.

Senator NASH: So what sort of industries would you see that being in, say, Griffith?

Dr Williams : That is the issue that I say needs to be explored because the issue is we are going to have to live with less water and how do you make it happen?

CHAIR: As part of the Griffith answer, why have we not progressed non-paddy rice?

Mr Cosier : That rhetorical question gives me the chance to try and help Senator Nash. We understand where that question is coming from. We understand the frustration of that question.

Senator NASH: I am not sure I do. I would not presume you know.

Mr Cosier : We have had the same frustration. If I can go back to the National Water Initiative in 2004, its objective was a dual objective of effectively creating more wealth using less water. This whole process, the reason we are sitting here is to restore the health of the river system so that we have a sustainable irrigation industry. We are using both the exchange of property rights and $10 billion of tax payers' money to facilitate that reform. Our criticism has been in the last three years that the process the government is going through to achieve that outcome is not in place. We cannot answer that question because we do not have the process that answers that question.

CHAIR: You did not answer my question either.

Senator NASH: I appreciate that and thank you very much for taking it. I suppose my reason for asking the question is to try and get some kind of definition around when people are asking what is a better future? I get a little bit edgy when people talk about better futures for regional communities when they do not actually live in them.

Mr Stubbs : In our previous work we said the government should, as part of this reform, fund processes that allow those people in the community to understand the size of the change and have the support, skills and technical support to help them map out what that might be. There is no way I know because I do not live in Griffith and I should not have any opinion on it.

CHAIR: So you obviously do not know the answer on non-paddy rice? You may recall Wren wheat, the first dwarf wheat and dear old Al Grasby got his claws into it? What would be the cost benefit analysis of converting the rice industry to non-paddy rice?

Mr Stubbs : One of the key things the CRC for Irrigation Futures and before that the rice CRC tried to get the temperature—and you would know more about this than I would—in the plant. What you are trying to do is get the plant to be able to cope with the low temperatures without having to use the water as a thermal blanket. There was quite a lot of progress on that. To me, clearly, that is the area to remove the actual need to pond the rice. That has made some progress but it has not got to the stage—

CHAIR: They are the things I presume we need to do because regardless of whether we put 4,000 or 2,700 back, the scientists are saying by 2050 we are going to lose more than that anyhow so we are going to be back to where we started.

Mr Stubbs : That is right. We certainly need to do those sorts of things. I was on the board of the CRC and argued very strongly for that research program but it has basically become stationary.

CHAIR: Well, that is where we ought to put some dough. Thank you very much for your evidence and, no doubt, we will hear from you again.

Senator EDWARDS: Dr Williams, did you write the paper on the Wheat Export Marketing Authority? Was that you?

Dr Williams : No. It is a terrible name I have got; everybody's got one the same.