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Rural and Regional Affairs and Transport Legislation Committee
25/05/2018
Estimates
CROSS-PORTFOLIO MURRAY-DARLING BASIN PLAN MATTERS
Murray-Darling Basin Authority

Murray-Darling Basin Authority

[14:03]

Senator McALLISTER: Can I come back to the authority. In the public debate that's taken place around the northern basin there's been a level of dissatisfaction expressed by some stakeholders about both the quality and the transparency of the modelling that's been undertaken. I understand that there is a commitment to publicly release the modelling for scrutiny. What progress has been made there?

Mr Glyde : I would certainly agree with you that there's been a lot of commentary and dissatisfaction about the modelling. We've done our best to try to explain to the community and stakeholders what that is, but we're certainly happy to undertake to provide further exposure of that. What we had in mind was the conduct of a workshop over a number of days to reveal what we think is on the public record but to explain it in detail. It is very hard sometimes for people to get their heads around what tends to be a very complex process. What we are planning to do is have that workshop—we haven't finalised the details of it yet—so that we can provide that transparency that people are looking for. That would be one comment.

The second comment is in that workshop to also explain to stakeholders and interested parties the nature of the decision-making that led towards the recommendation for the amendment to the basin plan. We think there is a slight misunderstanding within the community that everything is driven by the model. We're obliged to use multiple lines of evidence. The model helps you ascertain what might happen, but there are a whole lot of other things we would have brought into the decision-making framework. I think there's been some concern expressed in the community and media about that. Our intent is to deliver on that commitment in that way.

Senator McALLISTER: The Wentworth Group in particular has a very specific critique of the modelling, which is that it's very complex and fails to adequately understand the hydrological dynamics, and that it doesn't adequately reflect the behaviour of water in the northern landscape. No model is perfect, but do you accept that substantial work needs to be done in that area?

Mr Glyde : I disagree with their assessment in that regard. We're using the best available modelling we have, which uses the best data we have. The real question is, can that be improved? The obvious answer is yes, it can be. We're really very keen to do that over time. The modelling helps, but there are a lot of other things that happen. Indeed, the recommendation that didn't quite get as much attention as the reduction in the sustainable diversion limit was all of the things that are reflected in the agreement between the opposition and the government about the other things you need in order to be more confident that the environmental outcomes can be achieved. The protection of the environmental water, as we've gone through in some detail already today, is as vital as the volume of water that you're sending down the rivers. The timing of it, how it's all organised, is really important. We had a whole lot of measures around that that I think are really important. We want to be able to explain some of that to groups like the Wentworth Group. We've tried to involve the Wentworth Group in our work. We've had them in numerous stakeholder consultations, peak body groups and individually, to try to help explain where we're up to. I think it goes to underline that we can do more in that space in explaining why we've come to the position we have—that we are using the best available data; that we do have independent people outside the Murray-Darling Basin Authority look at that work. We are quite keen to continue our engagement with groups like the Wentworth Group and others who are interested in understanding why we have come to the decision we have.

Senator McALLISTER: The discussion earlier about the cap factor and its significance—as I understand it, the interaction that is of most interest to stakeholders is the way that the cap factor interacts with the SDL and the capacity for the SDL to be adjusted if the cap factor is changed. That is a significant relationship. You understand why people are interested in what the cap factors are and how they're constructed. Could a cap factor be manipulated by a planning authority to advantage some stakeholders over others within the basin?

Mr Glyde : Part of our job is to make sure that doesn't happen. Part of our role is to accredit the use of the models to accredit the data that's in them and the assumptions behind them. There are many more than the so-called 'cap factor' assumptions. It's fiendishly complex. I might ask Mr Binning to give a more detailed answer in that regard.

Mr Binning : The cap factors in themselves won't impact the sustainable diversion limit. The sustainable diversion limit is the limit set by the basin plan following acquisition of water that sets the cap on use. So it's an absolutely fundamental element of the basin plan. The cap factors do allow us to be confident that we've acquired enough water so that when we enforce that cap factor we won't adversely impact other consumptive water users—irrigators, urban use, stock and domestic et cetera. So the cap factor, as I gave evidence earlier, relates to the use of water. Where the cap factor's become a real issue for everyone is that if all users start using more of their allocation than they have in the past, what occurs is the sustainable diversion limit will be breached. The requirement under the basin plan is that we measure the actual amount of water taken each year and monitor that. If the diversions go more than 20 per cent above the sustainable diversion limit in any year, a set of compliance activities is essentially put in place. The way it's ultimately addressed is through something called growth in use provisions within the water resource plan. Essentially they require that if it emerged that people were using more of their allocations consistently over time, and that sustainable diversion limit was going to be in breach on an ongoing basis, the allocations would have to be changed to bring use underneath that cap. So all water users need to be mindful of changes in the pattern of use within their catchment and how that might impact their own entitlements. This is a function of user behaviour and the operation of the market. It's not a function of the cap factor itself, which is just a way of measuring those trends. Those risks are ultimately borne by all water entitlement users. The final thing I would say is that that's more or less the same way that the system works currently under the cap that was put in place in the 1990s.

Senator McALLISTER: I suppose the point is that that cap factor is relevant in that if, as Mr Glyde's testimony suggested, it can be gamed—you said your role is to verify, monitor and check it. Practically, how do you do that with the states?

Mr Binning : I might ask Pradeep, who heads our modelling team, to make a comment in a moment. I'll make two quick comments. The first is that it's in everyone's interests to get this as right as possible. If you don't recover enough water, ultimately the risk is on all the irrigators and consumptive users.

Senator McALLISTER: But it's not unknown in the history of Murray-Darling Basin management for people to be a bit short-sighted from time to time. I understand that a rational individual might form that view, but I don't know if that's always been the history.

Mr Binning : We look across the 114-year climatic record and we look at the pattern of use. We also look at the pattern of trade, because sometimes entitlements are traded against one another for reasons such as managing carryover. We try to distil those. Then we have a mind to most recent changes in use. So over the shorter time horizon—

Senator McALLISTER: You try to identify trends.

Mr Binning : Yes. Are we seeing some trends that are important? What is very important is firstly, that we try to make sure that the methodologies are applied in a completely transparent and consistent basis; and secondly, I think it is the intention, both for ourselves and New South Wales government in the case of current work, to ensure that that is subject to a period of consultation.

Senator McALLISTER: I'd like to ask about overland flows. What is your assessment of the effectiveness of the regulatory regime at the moment in maintaining diversions from overland flows at a sustainable level?

Mr Glyde : You're after an open and closed answer? How effective it is?

Senator McALLISTER: It's an opening question, I suppose. I'd like to talk about overland flows. I'm interested to understand whether you think the system is adequately managing that aspect of the hydrology in the north at the moment and whether there are things you have on foot that you intend to change.

Mr Glyde : I'll give a generic start to that answer. For the first time the basin plan tries to capture all forms of water, overland flows as well, so they're captured within our calculations of the SDL. In some places it's possible to measure those flows quite accurately and in other places it's not. Part of the ongoing evolution of the plan is to improve our ability to measure and monitor overland flows. They're being brought more explicitly within the accounting framework because of the way the sustainable diversion limit is calculated. I would certainly like to see the evolution and improvement of monitoring of those flows over time.

Senator McALLISTER: You said that the accounting framework is evolving so it can see those. Is storing water in a dam from an overland flow presently subject to a licence?

Mr Glyde : I will ask Dr Macleod to answer. It varies a fair bit from state to state.

Dr Macleod : The arrangements do vary from state to state, as Mr Glyde said. The New South Wales government is undertaking a process in northern New South Wales to more accurately quantify the amount of water being taken by overland flows. The estimates we used at the time of the basin plan were average estimates based on the information available at that time, in 2012. We're working with them to try and see if we can improve those estimates. On top of that, they're also looking at better ways of measuring use of overland flows. As part of that work, I understand the New South Wales government is considering improving the licensing arrangements for that use, so that it can be more accurately quantified and managed over as the years go on from that point.

Senator McALLISTER: They're looking at it—what does that practically mean?

Dr Macleod : The first thing is to work out how much is going on at reference periods. The reference period for the basin plan is June 2009. That's the time against which the baseline diversion limit applies. There are other dates, though I don't have them off the top of my head, associated with embargoes that were put in place in New South Wales. They're looking at trying to quantify the amount of water used against those reference dates. Then they're looking at how the arrangements might be. There might be more volumetric licences issued. But these are for New South Wales, not for us. There might be licences issued for those things so they can be managed on an ongoing basis. That's what's happening. This is stuff that happens at a New South Wales level; it's not things we're involved in. Our job, in terms of accounting for this water use, is to understand the methods they have in place and also assemble that information on an annual basis to subtract water use against the SDLs, knowing that the sustainable diversion limits haven't come in place yet. They come in place from July next year.

Senator McALLISTER: Was this type of water use really contemplated in establishing the sustainable diversion limit in New South Wales?

Dr Macleod : Yes, it was. As Mr Glyde said, one of the things we did in the basin plan was to include all forms of water use, or additional forms of water use that weren't explicitly accounted for in the cap. Overland flow harvesting was originally included in the intent of the cap, but the extent to which it had been incorporated was incomplete. I think we improved that in the coverage of the way the SDI actually applies. There are challenges in estimating the amount of water used by this form of use. There are two forms of overland flow harvesting normally identified, one that breaks out of the river and is taken from the flood plain, and the other is water that never even made it to the river. The work that's going on now is an attempt to identify both of those forms and to see what was happening in 2009. What we did do in setting the basin plan diversion limits was to say, how much more water was needed in the river than was happening in 2009? We had estimates of what was going on in terms of what the river flows were in 2009 conditions. In some respects the terms in the modelling that we had for those river systems incorporated in a consolidated way the amount of water taken by those systems. We're now starting to partition the amount of water being taken by specific elements of the water balance in a better way than we ever have before. I would argue they're all improvements and better regulate the amount of water being taken in the northern basin.

Senator McALLISTER: My time's up.

CHAIR: Senator Patrick.

Senator PATRICK: Maybe the Commonwealth Environmental Water Holder could come back to the table. I'll ask another question first.

Mr Quinlivan : They've gone.

CHAIR: I cleared that with you.

Senator PATRICK: I had one more question, but that's okay. I'll ask this of the secretary.

CHAIR: My apologies.

Senator PATRICK: That's okay. During the evidence, Ms Swirepik said that there had been discussions between the MDBA and her office in respect of cap negotiations. She said that information had been passed. Can that be tabled? I'm happy for that to be taken on notice.

Mr Quinlivan : I'd have to ask one of the parties to that conversation.

Senator PATRICK: Or even MDBA. That makes sense.

Mr Glyde : To clarify, New South Wales has proposed a set of cap factors. We've been looking at those. And we've been sharing that information with what we think are some of the interested parties. The Commonwealth Environmental Water Holder is one of those parties. I think we're moving towards the public release of this information. I'm not quite sure exactly when that will be. Right at the moment, I don't think we could table that here and now. But we're moving, within the next few weeks I think, to the publication of that information. As part of this overall process, as Mr Binning said earlier, we'll be publishing this information as part of the development of the water resource package.

Senator PATRICK: When is that likely?

Mr Binning : It's ultimately a matter for New South Wales government. Having said that, I believe the intention is that there is a large meeting of all the WaterNSW stakeholders scheduled for 5 June. It's intended to release those figures just prior to that meeting, to use the meeting as an opportunity for facilitated discussion and briefing of all the stakeholders, followed by a public consultation period which will allow everyone to interrogate and offer perspectives.

Senator PATRICK: That's satisfactory. That's helpful. Secondly, in answer to question 168, relating to the Barwon-Darling, there was talk about pilot project testing on the extent to which the Australian Geoscience Data Cube can assist in monitoring flow characteristics. There was a report that was put out that did seem to show some useful information from a compliance perspective. Had has the department or the authority decided to go ahead with the use of this data cube for compliance, as a technique or as a tool?

Mr Binning : I can give a general answer. We certainly see a lot of scope in remote sensing to provide insights. Our most recent one, by way of example, has been in monitoring the progress of the connected flows in the northern basin. We've been able to demonstrate that we can track water, using publicly available satellite data, on a daily basis in most cases, at least within a week. It's giving us an accurate view of where water's moving in the landscape, how it's moving and how effective it is. But there's still a lot of work to do to continue to develop and refine those tools. They certainly have potential to be another line of evidence in targeting and managing compliance activities, but the compliance requirements on individual entitlement users of course relate more to measuring and other well-established mechanisms. I would imagine this is going to be a rapidly evolving area over the next five to 10 years. I would imagine that remote sensing will play an increasing role. But I don't imagine that it will replace the need for point metering.

Senator PATRICK: I would of course see it as complementary. One of them allows you to monitor perhaps individual use, but the other one gives you a bit of an overview. That report that came out showed that you could detect anomalies in flows.

Mr Glyde : With what Mr Binning said, as part of our work as we've gone forward with the compliance compact and the other work, as mentioned earlier, we had a workshop. We got a group of people together from CSIRO, Geoscience Australia and the Bureau of Meteorology to find out what is the current state of play and what prospects there are from a compliance perspective but also from a river management perspective. There are a whole lot of different uses we could put that to. We're trying to bring all that together as well. We see, as Mr Binning said, tremendous potential for this to assist in all sorts of activities, including compliance.

Senator PATRICK: I've never met a scientist who hasn't written a paper when they're excited about something. Has anyone written a paper on the potential of this and how it might be used?

Mr Glyde : I think what we're hoping is that when we do the write-up, as Mr Binning said, of the work that we're doing to monitor how this northern connectivity event goes through, we'll be able to begin to show the real practical on-the-ground type applications we can make of the technology. As you say, there are always people who are prepared to sell you all sorts of different technology; it's a question of whether it will be meaningful and useful in the context we want to apply it to, whether it's compliance, monitoring, environmental or other outcomes, or just running the river.

Senator PATRICK: I might go to Mr Morris now, to discuss the answer to question 199. The minister provided an undertaking to revisit the water buybacks OPD, to see if some material could in fact be left unredacted, or returned unredacted. Of course the answer to that was no. With the concurrence of the assistant minister, I will just declare we agreed we would publicly reveal we have had a discussion in private about that. And it was a very useful discussion. It's probably worth while stating that there's still some disagreement, and it might be helpful if we air publicly some of the reasons as to why some of the information hasn't been redacted. In dealing with you, Mr Morris, I was not made privy to the data that is redacted; I want to make that clear. However, I was convinced in a number of cases, knowing what the data was, that the redactions were legitimate. That left us with a couple of areas where we thought there might be more discussion, and it might be of benefit to do it in this forum. Are you comfortable with me to proceed with that?

Mr Morris : Yes.

Senator PATRICK: There are a couple of areas. You recall this OPD probably flowed from after the Tandou OPD, which revealed some differences between valuations and the price that was paid. This OPD followed, to have a look at other buybacks that had occurred. A couple of areas where we didn't quite reach agreement yesterday were in the area of providing sales information that we agree is in the public domain, or that can be at least purchased, that is in this documentation. I'm wondering if you have made any further considerations, since our discussion yesterday, as to whether or not previous sales data can be released.

Mr Morris : To confirm, I think your explanation of our discussion yesterday is accurate from my viewpoint. We were referring mainly to OPD 579, although I think occasionally it's been misquoted as 597, but 579 is the one we're referring to here. We did yesterday go through a number of the redactions in general terms. As you say, you weren't privy to what the actual words were in the redaction, but it was explained what was there.

I made a commitment that, while the department can't release the information itself, it can provide advice to the minister and then the minister might decide to review his decision. The commitment I made to you was that we would go through each of the redactions again in that OPD and see whether there was material that could be reconsidered or that we might advise the minister to be reconsidered, and then ultimately it would be up to him to make a decision as to whether he would do so or not. The main areas that I think we thought that we should discuss were around the claims of legal privilege. That's something we have started having discussions on with our lawyers, because they have particular views on that, as you would be aware.

Senator PATRICK: In principle, the Commonwealth can waive privilege at any point and should waive privilege in circumstances where waiving privilege would not harm the Commonwealth.

Mr Morris : We're having a close look at that, Senator. There is another area that we're having a look at. While we did release some parts of the valuation, we didn't release all parts. There were certain parts that you pointed to that we discussed that were in relation to past sales information. We agreed to review whether that sales information that had been redacted might be available publicly elsewhere.

CHAIR: I'm loath to interrupt, but is there a prospect that this committee this afternoon is likely to have to make a decision on public interest immunity?

Senator PATRICK: I don't think so. Part of it is about making sure the public understandings the redactions. I have a few more points that I'd like to make to the department that may assist, but I think it's very useful for the public to understand why they are keeping this data confidential

CHAIR: The reason I ask is that I note that some of the registered voting members of the committee are not here and I'd be loath to have half an hour and then have to come back and listen to it all again.

Senator PATRICK: I don't foresee that occurring, provided that we get an answer from the minister that we end up agreeing to it. It might end up that there are one or two things where we disagree and where that may need to occur, but not today, I don't think.

CHAIR: Sorry for interrupting you, Mr Morris, but otherwise we'd go over and over it.

Mr Morris : I think I had concluded anyway. So we'll review the sales information as well and see what—

Senator PATRICK: I would add a point to that, because I didn't discuss this with you yesterday. My view was that the information is available publicly if you were to pay for it—and the taxpayer has in fact paid for it—just as you can with Residex information and get access to previous house prices. The Commonwealth has paid for it. I would point you to para 7.22 of the Commonwealth Procurement Rules, which are obligatory for your organisation. It says:

The need to maintain the confidentiality of information should always be balanced against the public accountability and transparency requirements of the Australian Government. It is therefore important for officials to plan for, and facilitate, appropriate disclosure of procurement information. In particular, officials should:

a. include provisions in request documentation and contracts that alert potential suppliers to the public accountability requirements of the Australian Government, including disclosure to the Parliament and its committees;

So, to the secretary, I presume when you make an order, when you have a contract, it contains that advice to anyone who's providing a service or information to the department. I'm presuming you are in compliance with the Commonwealth Procurement Rules.

Mr Morris : We're in compliance with the Commonwealth Procurement Laws.

Senator PATRICK: I just point that out as a consideration that you might take back to the minister as well—that the people involved have been warned, or are aware, that the parliament may call on this information to be made public.

Mr Morris : We're pretty confident of that. We can double check that on this particular case, but that would be the normal course of practice.

Senator PATRICK: That's the sales data, and then we're moving to, I think, valuations.

Mr Morris : Yes. The valuations are a slightly different matter because these go to not just the information that might be of commercial sensitivity to other players—and, in the case of sales data, if it's not publicly available already, that may be where there's some sensitivity—but there may also be some methodology issues in the valuation. But what we do with the actual valuations themselves, as the minister mentioned last time, is assess all the information on a case-by-case basis; we don't make a blanket decision on things. That was certainly the case with respect to valuations.

So, as you previously pointed out, we have released valuations in some cases, such as with respect to the Tandou sale. In other cases, such as the sale in the Warrego and the sale in the Condamine-Balonne, the decision was made by the minister not to release that information. The basis of that, in terms of those two latter sales, was that they were in catchments where there was a reasonable prospect that we would be needing to recover further water and that may involve strategic purchases in those areas. As you would be aware, in the northern basin we do have some remaining recovery to be achieved and, if the northern basin review amendment doesn't go through, that number will be even higher. So, with that additional water recovery still being required to be recovered, it was important that the Commonwealth protect the interests of taxpayers by not revealing valuations that might lead to potential sellers using those to their advantage over the taxpayer. So we made the decision in the case of those two valuations not to release them, or the minister did.

Senator PATRICK: So that was Warrego—

Mr Morris : And the EAA or the Condamine-Balonne.

CHAIR: In the event that there was a person in those districts who was considering the prospect of selling water to the Commonwealth or, in fact, any other transaction, wouldn't step No. 1 be to get some valuation advice in relation to the valuation of the commodity?

Mr Morris : They could do that, I would also note—

CHAIR: No, but then wouldn't the valuation advice they would get—which I would assume would happen on every occasion if you're talking about a potentially substantial transaction—reflect the valuation that the Commonwealth had in relation to these other cases? What I'm trying to get at is: I could understand this if the Commonwealth paid over the mark or substantially over the mark as opposed to a valuation. You'd want to keep that quiet because—

Senator PATRICK: For the wrong reasons, however.

CHAIR: Well, yes, in one respect.

Mr Quinlivan : It could be an apple or oranges—

CHAIR: I appreciate that. But there should be nothing to fear from apples and oranges if we're dealing with valuations, as long as the valuation methodology is apple and apple. It's the senator's pursuit, but—

Senator Ruston: Can I seek clarification from Senator Patrick. Am I right in interpreting your question: given that the price of the purchase of the water is a matter of public record, that price then becomes the valuation for subsequent sales?

Senator PATRICK: Yes. It sets the market—

Senator Ruston: Therefore, it renders it irrelevant?

CHAIR: Well, it may set the market. It doesn't always set the market, but it certainly may set the market and, particularly in the absence of any other data, if it's not a commodity sold every week or fortnight or every month, then it will influence it to a certain extent.

Mr Thompson : These are shallow markets in some cases.

Mr Morris : Not the range of valuations, but the value of the purchase is actually released. So that's market information. But what is not released is the valuation advice, which tends to be a range. The actual price paid could be anywhere in that range, so releasing the range of valuations will actually give—

CHAIR: Well, let's tidy this up—sorry, Senator Patrick. Was the price paid by the Commonwealth within the range?

Senator PATRICK: That's actually the fundamental question, and that may be the way of not giving away the valuation. So, in the Tandou case, there were lower valuations and the price paid was higher. Now, there's an argument about what was in and out of scope. So maybe we can get around this by not revealing the valuations. There's a happy compromise.

CHAIR: I think Mr Morris has indirectly told you what you need to know. It was paid within the range. If it was paid within the lower end of the range, the photocopiers wouldn't stop because that's the signal to the marketplace with respect to value.

Senator PATRICK: There were multiple sales. I just want to clarify that that is the case for each of the sales and—look, I'm aware also the Auditor-General is looking at this as well and I actually suspect the Auditor-General will publish the valuations anyway and it—

CHAIR: In fairness, we have run out of time for you. If you don't think you can close it out, then we'll need to come back to you.

Senator PATRICK: I can close this out by asking: can you provide an assurance that in each of the purchases covered by these OPDs the price that was actually paid by the Commonwealth was below the maximum—

CHAIR: Although, dangerously, Senator Patrick, if one of those answers goes to the heart of why they're trying to protect this—

Senator PATRICK: I understand—

Senator Ruston: Senator O'Sullivan, I don't think you can make the assumption that that is the case.

Senator PATRICK: I'm trying to help the Commonwealth—

Senator Ruston: I certainly won't be having it on the record that the reason the information isn't being released is—

CHAIR: Sorry, your answer—that is the case?

Senator Ruston: That is not the case. I don't think you can jump to the assumption that the reason we're not providing the information is because—

CHAIR: No, but with respect, can I say—and Senator Patrick can pursue this through a number of methods—that the documents are becoming less and less important. If Mr Morris were now to indicate, 'Well, that wasn't true in every case', the inference being that they did pay outside the spectrum.

Senator PATRICK: Yes. Above.

CHAIR: Well, one assumes above. If it was below, we wouldn't be having this discussion.

Senator Ruston: Yes, we would be. We should be.

CHAIR: We should be celebrating.

Senator Ruston: No. We shouldn't be celebrating the fact that we've used our market power to try and take water from somebody too cheaply either.

CHAIR: I don't think that's fair either. The market is the market—a willing seller and a willing buyer.

Senator Ruston: No. I disagree.

CHAIR: Anyway, Mr Morris is all growed up. He'll know what to do with that question.

Mr Morris : I'll try to be precise with my answer.

Senator PATRICK: Take it on notice so there's no doubt. I just want to understand the price paid for each of the sales—are any of them above the maximum of the valuation range?

Senator Ruston: Within scope.

Mr Morris : I'll say they're consistent with the valuation, and I'll answer a bit more precisely on notice so that you have it precisely.

CHAIR: Let me ask one final question. While units of water as a commodity have a value, they're traded all the time. Well-watered properties also have a value greater than the sum total of the units of water plus a piece of land. Is that correct? So it could distort a sale price. For example, it would be how you'd allocate it?

Mr Morris : Yes, that's right.

Senator PATRICK: But the valuation would have been specific to the circumstances of the purchase, so it would have taken that into consideration.

Unidentified speaker: It may.

Mr Morris : Not in all cases. Not in all cases.

Senator HANSON-YOUNG: Enough wriggle room—

CHAIR: We're back to Senator Hanson-Young.

Senator HANSON-YOUNG: I just have one last question to put to Mr Glyde in relation to the letter and then I've got some other questions for you, Mr Glyde. The reason I'm asking you is because you indeed read out your own Hansard in a previous section of questioning in relation to what you believed to be the usual practice of how David Papps would engage with you on matters. You told the Senate back in March that David's usual practice is to talk and then write a letter. You repeated that earlier, did you not?

Mr Glyde : I did.

Senator HANSON-YOUNG: I would like to understand why Mr Papps, in his correspondence to this committee, has gone directly to that point. I will quote from his letter. He said: 'As was my usual practice on such a complex and important matter, it was my intention to provide the MDBA CEO'—that is, you—'with an unsigned draft as the basis for discussion. This was also a recognition of the fact that the MDBA was the decision-maker. This discussion would then lead me to a final position.' So Mr Papps has directly contradicted what you have said.

Mr Glyde : I would put a different interpretation on that. Mr Papps first sent this letter to my office on the day of his retirement. I personally became aware of the existence of this letter several weeks later. It was odd to me that Mr Papps would have his EA send my EA a draft unsigned letter and not have a discussion. What has happened is entirely consistent with what Mr Papps has said. If we were going to have a discussion, he would often provide an email—I would sit down and have that discussion—or he would provide a draft of something he was thinking of sending and we could consult on that to see if it made sense, to see if we had the right understandings and interpretations. But he didn't do it in this particular case. It struck me as unusual that his EA would send this without the basis for that discussion.

Senator HANSON-YOUNG: But the evidence you gave to the committee was that the usual practice was to talk and then send a letter.

Mr Glyde : Yes.

Senator HANSON-YOUNG: And he is suggesting that his usual practice is to send you a draft and then talk.

Mr Glyde : His usual practice would be to organise a meeting and have a chat or do it over the phone. The letter was sent on his very last day, without a discussion. That is the point. This letter, as I understand it, was first drafted in the Commonwealth Environmental Water Office, at David's direction, in about November. Having asked for that to be drafted as a basis for a discussion, you would think we might have had that discussion between November and when he finally sent it on his last day.

Senator HANSON-YOUNG: That is referred to somewhat in the correspondence between his EA and your EA, which has been tabled, where he is effectively chasing up as to whether you did get the letter prior to the date of his retirement. In that email response, your EA said that they were going to check.

Mr Glyde : And we did—and we hadn't received the letter.

Senator HANSON-YOUNG: But then you did—it was in your email box.

Mr Glyde : It was in my email box on the day of David's retirement. That day, I attended David's retirement function at the Department of the Environment, and on that day I proceeded on leave to the great state of South Australia to go cycling. So it was some weeks after that I became aware of the existence of this letter that had been sent to my EA.

Senator HANSON-YOUNG: You are now saying it is unusual, but back in March you said that the usual practice was otherwise.

Mr Glyde : Yes, his normal practice. My experience of his previous practice, his normal practice, would be to use the letter as a basis for discussion.

Senator HANSON-YOUNG: Remembering, of course, that, in this exchange of explaining what his usual practice was, you never admitted that you had received the letter in the first place.

Mr Glyde : I don't think that is correct.

Senator HANSON-YOUNG: You never admitted that you actually had a copy of the letter.

Mr Glyde : I did.

Senator HANSON-YOUNG: No, you kept saying you didn't have a copy of a signed letter.

CHAIR: Senator, give the official time to support what he is saying to you.

Mr Glyde : I also read out our answer in March 2018 to Senator Patrick's request about it referring to an unsigned letter. The fact was that it was out in the public domain, a letter addressed to me, with David Papps's signature block on the bottom of it but unsigned. So I don't think that's right—I was aware of the existence of an unsigned letter. It was some time after my office received it, but I was aware of its existence through the media request.

CHAIR: That feels quick, but it's common. Senator Patrick.

Senator PATRICK: I will go back to finalising my previous question. I think we understand what it is, so if there were any of the purchases that were above the maximum price, could you please let the committee know? And please be specific about which purchase that was. Please also include any explanation you want to provide along with it—I'm not trying to set you up or anything.

Mr Morris : I understand. To the degree we can provide some explanation around those valuations, we'll do so as well.

Senator PATRICK: Thank you. I'd like to move to the Northern Basin Review, and to my question No. 158 which asked about the changes in the effects of the Northern Basin Review adjustments on water to South Australia. I think these can be directed to you, Mr Glyde.

Mr Glyde : That's right. We answered that one, Senator.

Senator PATRICK: Thank you for your answer. To describe the fundamental difficulty that I've had, on 8 November the authority came up with modelling that showed that the effect on the Menindee Lakes and the Lower Murray was 35 and 20 gigalitres, as a result of the change. Then it went to, I think, 10 and 15, not many days later—something like 14 days later. Then in November, a year later, it went to seven and four gigalitres respectively. We were just trying to understand how those changes occurred.

Now I'll add a piece of information that I didn't throw in last time. I've had some discussions previously with Minister Hunter, when he was the water minister for South Australia, and he told me that when he went to the meeting where the 35 and 20 were first presented—and I understand that that modelling occurred over a reasonably lengthy period of time—he went to that meeting and he told me he was quite livid, or disturbed, at the numbers that the modelling had produced. He didn't quite walk out of the room, as he might have with the Deputy Prime Minister, but he was unhappy. Then we find that, some few days later, less than 20 days later, we have a new set of numbers.

Senator HANSON-YOUNG: Different numbers.

Senator PATRICK: More palatable numbers.

Senator HANSON-YOUNG: More palatable numbers.

Senator PATRICK: You put that down to the toolkit modelling, Mr Glyde, is that correct?

Mr Glyde : No, Senator. I think in our answer—there were two elements to what had happened. Firstly, that the report you were relying on, Northern Disclosure by the Australian Institute, was wrong; that they had made a misinterpretation—an erroneous comparison. But secondly, the chart we gave you in the answer to that question was really showing how, as time went on, we were refining—we ran a number of different modelling scenarios in order to try and find what is the least-cost way to hit the environmentally sustainable level of take. You would expect as time goes on, as we narrow down and bring in more information, that these things would change over time. And so I think there are two things that have confused this story. One would be the Australian Institute's error, and the second would be a fundamental misunderstanding of the process that the authority went through. I understand what you have said in relation to Minister Hunter, but South Australia agreed to the Northern Basin recommendation—

Senator PATRICK: I'm just explaining the circumstances. We have an unhappy minister walking out of the room because the numbers 35 and 20 were unacceptable and he wasn't very happy. Then, somehow, 14 days later, a better answer pops out.

Mr Glyde : No, and I think—

Senator HANSON-YOUNG: Except the first figure is the same.

CHAIR: We're not here for fortuitous contributions.

Mr Glyde : I can't comment on what Mr Hunter has said to you. What I can comment on is the dispute that Mr Hunter had in relation to that ministerial council meeting was not in relation to these numbers. It was a broader question that was being debated, which was in relation to the 450 upwater gigalitre part of the sustainable diversion limit adjustment mechanism. So I think you're putting two issues together which aren't quite correct. All I can do for you is describe to you—which is what we've tried to do in this answer, and I might get my colleagues to explain—how that process works.

The process we followed was to try to find, as we're required to do, the best outcome for the northern basin and how to hit the environmental targets we need to hit in a least-cost manner. That's what that process was. We refined and got better at finding out what we needed to do. There were two things happening. The numbers would change as we got towards a better target. We were trying to find the sweet spot. The second thing was, I think, that the Australia Institute had just completely got it wrong.

Senator PATRICK: In terms of finding the sweet spot, in your words, my understanding with the data that was first presented to the South Australian minister and other ministers is that there were a number of ways of generating this information. One is over a 10-year set. One is over a five-year set. You can pick dry years and you can pick wet years.

Mr Glyde : Correct.

Senator PATRICK: And whenever you run one of these models you come up with a different answer, understandably.

Mr Glyde : I might pass to my colleagues to explain that, but the model enables us to look at averages, dry sequences and wet sequences so that we have numbers for all of these.

Senator PATRICK: Sure. But my understanding is that depending on whether you run five or 10 years or wet or dry it gives you a different result. That begs the question: which of those is the right result?

Mr Glyde : You've got to the extent of my knowledge.

Senator PATRICK: Okay, thank you. I'm bordering on the edge of mine too!

Mr Binning : I'm happy to provide a bit more detail on notice. The numbers that have been quoted are the numbers that are based on the long-term average and, of course, with Australia's climate what we do is take the average across the 114-year climatic record that we use for all our planning. But long-term averages do require interrogation, so analysis was done. It was shared with each of the state governments, the implications in dry, average and wetter years. I don't have that analysis with me today but we would be happy to provide it on notice.

Senator PATRICK: I also seem to remember that when I read that report—didn't it say that the first report wasn't modelled in its entirety; it was a collection of results from modelling and it was only the November 2017 report that sought to correct that? It was on page 3, from memory.

Mr Binning : We'd be happy to take it on notice if we could get some clarity around the actual nature of that question, because it sounds to me like it's something quite specific.

Senator PATRICK: I fell asleep at page 5, so I'm pretty sure it was page 3.

Mr Binning : I'm happy to provide an answer, but I can't without understanding the detail of it.

Senator PATRICK: Okay, come back to me. I'll conclude, thank you.

Senator HANSON-YOUNG: Mr Glyde, how many people are currently working at the authority?

Mr Glyde : We're somewhere in the order of about 280 full-time equivalents.

Senator HANSON-YOUNG: And how many of those work in public affairs, media and communications—that part of the organisation?

Mr Glyde : Twenty five. We have an area that looks after media, communications and engagement.

CHAIR: I think you were corrected there to 29.

Senator HANSON-YOUNG: Is it 25 or 29?

Mr Glyde : Sorry, 29. My apologies for that.

Senator HANSON-YOUNG: No, no. We'll just make sure we're correct about that; that's great. Mr Glyde, did you write to your MDBA staff saying that you were conducting an investigation into the leaking or unauthorised disclosure of information and internal material?

Mr Glyde : Yes.

Senator HANSON-YOUNG: When was that letter sent?

Mr Glyde : I'll have to take that on notice. There were a couple of occasions over the course of 2018 where I felt I needed to remind MDBA staff of their obligations as civil servants in relation to the provision of information outside of the organisation. With the leaking of the letter that we have spent a bit of time talking about today, both Ms Swirepik and I undertook investigations to try and find out how that had come out. It was not material that had been authorised by either of us to be publicly disclosed. So, at that stage—and I can give you this on notice if you like—I reminded staff in an all-staff email of their obligations and what our policies are in relation to the unauthorised disclosure of information. There was a subsequent time when a document also made its way into the public domain about a week before we were due to publish it, and we're still in the process of investigating—

Senator HANSON-YOUNG: Which document was that?

Mr Glyde : It was a document in relation to flows in the Barwon-Darling. We had been working with our colleagues in New South Wales: the Department of Industry, Water, the Office of Environment and Heritage and the Commonwealth Environmental Water Office. That document was released ahead of time as we were preparing for its communication and, again, that was a concern and so—

Senator HANSON-YOUNG: Can I just clarify for the sake of Hansard, Mr Glyde: was that the Observed flows in the Barwon-Darling 1990-2017 report?

Mr Glyde : I'll just have to check on what the actual title was, sorry. I'm advised that's correct.

Senator HANSON-YOUNG: Thanks—just so we know what document you're talking about.

Mr Glyde : I've just also been advised that the first email was on 18 February and the second was on 15 March. I think as far as our stakeholders, ministers and the broader department are concerned, there's a point at which trust is eroded in our ability to maintain documentation that hasn't been provided for release. I thought it was very important to remind staff of their obligations in this regard. It's also very important for us to understand if there are any weaknesses in our systems that enable the inadvertent disclosure of information.

Senator HANSON-YOUNG: Sure. Would you be able to table those two emails that you circulated to staff?

Mr Glyde : Yes, sure.

Senator HANSON-YOUNG: In relation to this crackdown, as it's been described in the media, you're saying you wanted to remind staff that they were required to comply with the Public Service values and Code of Conduct.

Mr Glyde : The emails also refer to our media policies and the various policies we have for making sure that we provide information that's been through proper processes—peer review, authentication et cetera.

Senator HANSON-YOUNG: Have you found anybody responsible for the unauthorised disclosure of any information through an investigation and since issuing this reminder to staff?

Mr Glyde : In relation to the first disclosure, in relation to the David Papps letter, I can only really speak on my behalf and I'm confident that the information was not provided by the MDBA to the media. The second investigation is still underway. I was obliged to consult with the people that we distributed a close-to-final draft of that document to, and I've asked the agencies I rattled through before, New South Wales and the Commonwealth Environment Water Holder to check their records and systems and to see whether or not it might've been inadvertently or deliberately released ahead of time.

Senator HANSON-YOUNG: What makes you confident that the Papps letter didn't come from somebody on your team?

Mr Glyde : Because there were two people that received that letter: two people had access to my inbox—my executive assistant and me—and our mail records show that neither of us sent that document out.

Senator HANSON-YOUNG: So therefore you are suggesting it was leaked from the Environmental Water Holder's office?

Mr Glyde : No, I'm not suggested that; I'm just saying that the records that I have—that we have access to—indicate that it didn't originate from my executive assistant or myself, but there could be other explanations.

Senator HANSON-YOUNG: Have you made any referrals to the AFP in relation to leaks or any unauthorised disclosures?

Ms Blyton : We have spoken to the AFP pre-referral service to see if there are some options to pursue, but, in the circumstances that we've had to date, we have not made a formal referral.

Senator HANSON-YOUNG: Have you made any other referrals to the AFP in relation to any other matters?

Mr Glyde : Not in my time at the MDBA.

Senator HANSON-YOUNG: What information do you give to staff about the whistleblower act?

Ms Blyton : It's now called the Public Interest Disclosure Act, and there is information available—I think it's both on our internal site and external website—and, as part of the emails that we've sent out to staff, we have mentioned the Public Interest Disclosure Act.

Senator HANSON-YOUNG: So, that is on those emails?

Ms Blyton : I think it's on at least one of those emails that were mentioned. I'm not sure if it was both.

Senator HANSON-YOUNG: Are you aware of whether there's been any information you've had to deal with that has been given through that mechanism or staff who perhaps have needed to use the whistleblower protections?

Mr Glyde : I'm not aware of any.

Ms Blyton : I've been at the MDBA since last June, and there haven't been any PID referrals since then.

Senator HANSON-YOUNG: Can I go on to—

CHAIR: You've got a couple of minutes, but I can come back to you.

Senator PATRICK: If there are only the two of us, I don't mind running a bit longer.

CHAIR: Can Senator McAllister and I go home?

Senator HANSON-YOUNG: Senator Patrick, if you're happy for me to keep going for a little bit longer—

Senator PATRICK: Yes, just to a natural break.

Senator HANSON-YOUNG: I wanted to ask about issues that have come out as a result of the South Australian royal commission. Mr Glyde, I assume you're familiar with the second issues paper released by the commission?

Mr Glyde : Yes, I'm aware of its existence.

Senator HANSON-YOUNG: It's quoted in there—

Senator Ruston: Chair, in order to inform the witness that's being interrogated, could Senator Hanson-Young assist us by making the issues paper available. Whilst we're aware of the issues paper, we don't have it.

Senator HANSON-YOUNG: I don't have a copy of it here; I've just got the extracts that I want to go through.

CHAIR: That doesn't work for us. Are you able to guide the secretariat to be able to print the issues paper and distribute it?

Senator HANSON-YOUNG: Yes.

Senator Ruston: Senator Hanson-Young, if it's of any assistance to you, we know broadly what the substance of that issues paper was. But, if you're going to quote specific lines from it, we may have difficulty in being able to respond to your questions.

CHAIR: Can I say: this is a very standard practice of this committee, and I don't want to deviate from it. If someone's going to refer to a document, the witness—

Senator HANSON-YOUNG: We've got the document. We can print it out.

CHAIR: Is there any specific part? We could end up printing a hundred pages.

Senator HANSON-YOUNG: It's 27 pages.

CHAIR: Okay, that's fine. You probably only need one for the set of officials and one for yourself.

Senator HANSON-YOUNG: I've got it here but you may as well print it out, if the secretariat's happy to do that?

CHAIR: I'm happy. These people can look after themselves. We'll get two copies.

Senator HANSON-YOUNG: You go, Senator Patrick.

Senator PATRICK: Thank you. On the royal commission, Minister, there has been some controversy raised by the royal commissioner, Bret Walker SC, as to the legal aspects—

Senator HANSON-YOUNG: This is exactly where I was going to go!

Senator PATRICK: Okay.

Senator HANSON-YOUNG: No, no; you fire away.

CHAIR: Don't you be mowing Senator Hanson-Young's lawn!

Senator PATRICK: I couldn't use a petrol lawnmower; I'd have to find a solar-powered one.

CHAIR: A tofu-powered one!

Senator PATRICK: The royal commissioner has invited submissions on this particular legal issue. Is the government intending to make a submission in respect of the legal controversy raised?

Mr Thompson : The government is still considering its position with respect to cooperation with the royal commission.

Senator PATRICK: There's a difference between simply cooperating and—I understand there may be an issue if, for example, a subpoena was issued or there was some question of officials arising. But this is simply an invite to make a submission. I wouldn't have thought it would be a huge burden to work out whether or not it's worthwhile doing that. It's certainly raised issues, and I'm sure the Commonwealth has sought some advice on it or has previous advice on it.

Mr Thompson : The submission would still represent cooperation, as you say, in some form. My answer stands.

Senator PATRICK: So the government's in a position where it's saying, 'No, we're not going to even talk'?

Mr Thompson : No, that's not what I said. I said the Commonwealth is still considering its position.

Senator PATRICK: Do you have any idea when that's likely, because there will be a submission deadline for that particular issue?

Mr Thompson : No, it's not clear at this stage.

Senator PATRICK: Can I go back to my modelling questions; is that okay?

CHAIR: You can do whatever you like. If you and Senator Hanson-Young are going to share the time, you'll nod to each other.

Senator PATRICK: It's the South Australian love! I want to go back to the issue of the changing numbers. The initial modelling that was done and released on 8 November didn't include the toolkit measures and, from memory, wasn't modelled in its totality; it was a collection of scientific assumptions. Noting that it was a critical element of the Northern Basin Review amendments to have the toolkit measures, why wasn't that modelling included in the first place?

Mr Binning : Again, I'm happy to take questions on the specific sequencing of different model runs on notice, because it's important, in providing evidence to the committee, to get it right—

Senator PATRICK: Your answer says it wasn't.

Mr Binning : and that will then be the case. The general answer to your question is that the authority was considering multiple scenarios during that period. That's entirely appropriate because, as an agency that needs to think about these things, we consider changes in hydrological outcomes—that's based on the modelling. We look at the environmental consequences, and economic and social impacts. We had a whole range of advisory structures. I'm not sure that the toolkit was fully defined at that time, and we have the public consultation process.

Senator PATRICK: Your answer to the committee—this is question No. 158; I presume you're prepared in respect of that—says:

Draft MDBA reports from the 8th and 22nd of November 2016 contained initial estimates made prior to the completion of the 320 GL + toolkit scenario. The first estimate … did not include the benefits provided by the toolkit …

I'm just trying to work out: if that's such a critical element of the plan, why wasn't it modelled? It doesn't make sense to me.

Dr Coleman : You're correct: the initial modelling from 8 and 22 November was based on estimates from previous modelling of the flowthrough that we would see through to South Australia. It did not include the final configuration of the toolkit. We weren't yet sure which aspects of the toolkit we could fully model or the spectrum of the toolkit measures on which they would lie. So we were still exploring those final options for the toolkit.

Senator PATRICK: In some correspondence to the New South Wales EDO, the Murray-Darling Basin Authority advised the EDO that the difference between the modelling on 8 November 2016 and 22 November 2016 was because of targeted water recoveries. So they've got a different answer from you in respect of why there was a change between those two dates. You say because it's the toolkit to the committee; to the New South Wales EDO, you said it's targeted water recovery.

Dr Coleman : That's right. The toolkit encompasses many measures. Targeted water recovery is one component of the toolkit. The other primary component that we were modelling was coordinated water delivery. So this is environmental water holders acting in concert to deliver water from multiple storages across the northern basin. The two primary aspects of the toolkit we were modelling were targeted recovery and coordinated water delivery.

Senator PATRICK: So you say that the two answers are consistent, because targeted water recovery was included as part of the toolkit model

Dr Coleman : That's right.

Senator PATRICK: I think the answer to Senator Hanson-Young was: scenario K wasn't reported until 29 November 2017—12 months after the Northern Basin Review. Was it not in there because it wasn't finished?

Dr Coleman : No, the scenario was completed: it was completed in January.

Senator PATRICK: So why did we end up waiting until 29 November, almost a year later, before that was presented publicly?

Mr Binning : So there are two driving factors. The first is: when the NBR was completed and we went through the formal consultation process, there was the usual final peer review et cetera prior to making the final recommendation to the amendment. I think we would also concede that we were a little tardy in the formal publication of that in our process of verifying that all the bases of the decision was there to be published. We identified that that report wasn't publicly available, and so we made it publicly available prior to the decision.

Senator PATRICK: I might stop at the modelling. I've probably got five more minutes of questioning in total, if that's alright. I want to move to air traffic.

CHAIR: Yes, then Senator Hanson-Young.

Senator PATRICK: I want to move to air travel.

CHAIR: Air travel as in aeroplanes?

Senator PATRICK: As in aeroplanes used by the Murray-Darling Authority. Over the last 48 hours, the finance minister has provided me with details about flights—the way in which the Commonwealth purchases tickets. What that has shown us is that, despite a lowest cost available policy, in 2016-17 Qantas seems to have had $201 million dollars worth of Commonwealth travel by officials and Virgin had $61 million. So there's quite a big disparity between the two airlines. I can see that there could be quite valid reasons for that. If you divide the costs by the total number of tickets, which was also provided to me, on average Qantas is costing $377 per ticket and Virgin is costing $261 per ticket.

CHAIR: You'd need to know the base science principles there. You need the control base there. That could be anything.

Senator PATRICK: I accept that that there are variations but it's across a sample of 799 tickets.

CHAIR: That doesn't matter. Thank God you're not leading in medical science.

Senator PATRICK: In my experience, whenever I book travel my instructions are always the lowest.

CHAIR: Stick with me down the back in 19C and it's always cheaper.

Senator Ruston: Sadly, Senator O'Sullivan, I think you'll find that Senator Patrick is in 29D. That's what gives him the right to be judgemental.

CHAIR: There are only two or three of us who travel economy.

Senator Ruston: Oh, no, there are a few of us.

Senator PATRICK: Could you help me by providing—because the finance minister didn't provide me with the details of the MDBA—for 2016-17 the split between your travel spend on Qantas and the travel spend on Virgin?

Senator Ruston: Do you want Rex added into that as well?

Senator PATRICK: No, I don't.

CHAIR: You and I've just been bush. That's going to be heavily contingent on the routes, and the Murray-Darling Basin would have a myriad of service providers up and down the basin.

Senator PATRICK: I understand that but, fortunately for us, there's a policy that would help us untangle that.

CHAIR: Do you sleep?

Senator PATRICK: No, I don't. I try not to. Plenty of time to sleep when you're dead, I have to say.

CHAIR: You need to get a life—seriously!

Senator Ruston: I think he needs to get a girlfriend.

CHAIR: You and I will plan something.

Senator PATRICK: Single senator for anyone who's after some company! The Department of Finance has a list of reasons. If, for example, Qantas is the only option then the fare will be the lowest fare and will be recorded with a code 1. If, for example, someone decides they want lounge access for some reason, it's a code 7. So, in actual fact, there is the ability to look through it and, if you have a situation where all of your codes against the bookings are code 1s, we know that, irrespective of whether it's Qantas or Virgin, there is no issue. If there is a disparity, I would ask that you provide the committee with the reasoning behind that.

If I may be indulged by the chair, it turns out that I was provided with information about the Department of Agriculture and Water Resources. So the same question would stand. I have it somewhere on my desk here, but the difference between Qantas and Virgin across the Department of Agriculture was of the order of $4 million versus $1 million for Virgin. Unless you could explain the reasoning behind that, perhaps you could take on notice to see why there might be a disparity. I understand there could be differences, but it turns out there's only one agency across all of government where Virgin dominates over Qantas—and I just don't understand that.

CHAIR: Just to understand that: with all other things being equal—the route of service—are the people in your department meant to get a competitive price, with all other things equal? Is that how it works?

Mr Quinlivan : We use a booking agency, which provides a service to the whole of government. It books fares on the basis of the principles that Senator Patrick has mentioned. When I need to go from point A to point B I certainly don't make that choice; it's made for me by the booking agency, which finds the best fare of the day at the time of—

CHAIR: And I imagine that the booking agent's been through some sort of contestable process.

Mr Quinlivan : That's right. It was a whole-of-government procurement process. Nevertheless, the question may raise some worthwhile answers. I'm happy to look at it.

CHAIR: I'm with you. We sit down the back. I wish to Christ everyone was down the back; it's great.

Senator Ruston: The only reason we don't, Senator, is so we don't have to sit next to you!

CHAIR: That's right. I understand. It's Bob Katter, Pauline, myself and him. That tells you something!

Senator PATRICK: I don't like sitting at the front because there are too many politicians! I asked this question also of the authority and of the department, and I've asked this of every agency that I've come before this week. In respect of the Chairman's Lounge and Virgin's The Club lounge, which are invite-only lounges, I get the reasons that people would accept that invitation, for work related reasons. In circumstances where the invitation is the result of the official position—so, if you have one because you've got a $150 million business in the background, that's fine; I don't want to know about that—how many people within the MDBA or indeed the Department of Agriculture have accepted an invite to the lounges? And in circumstances where they have only one—say, the Chairman's Lounge—could I have a breakdown of their travel, Qantas verses Virgin, as well, please?

Mr Quinlivan : Okay. I can I do that. I'm pretty confident that in our case the answer would be four, for both lounges.

Senator PATRICK: I have come across one official who said there is one, and actually they don't have both. I'm just interested in what happens at the very top levels of an organisation when someone has access to or has accepted an invitation to one lounge only—what that does to their travel.

Mr Quinlivan : I think the question is probably more for the airlines that make the invitations.

Senator PATRICK: Well, yes, and no.

CHAIR: No, I think my office influences; I think my office from time to time expresses—

Mr Quinlivan : No, sorry: we're talking about club membership here. I'm saying that those invitations are made and accepted.

Senator PATRICK: And I have no problem with that.

Mr Quinlivan : I think it's the question of the invitation rather than acceptance that's at issue.

Senator PATRICK: Sure. It's on my register of public interest that I've been invited and have accepted membership of both of those lounges. So, I'm not skewed in whichever way I go. I'm flying back to Adelaide tonight on a slightly later flight, and it's cheaper, and that's the reason I'm going on that flight. There's no criticism of senior officials taking that; there are really good reasons that judges, for example, may not want to sit amongst former litigants or something—I don't know.

CHAIR: You want to be careful going to those lounges over the next couple of years!

Senator PATRICK: So, there's no issue with that. I'd just like to know, in the instance that they have only one but not the other, a breakdown of their Qantas versus Virgin flights. There are not many people, so that shouldn't take much effort.

Mr Quinlivan : And my point would remain. I think that's more a question for the airlines than for us.

Senator PATRICK: As to why they do only one?

Mr Quinlivan : Yes.

Senator PATRICK: That's clearly an invite arrangement. But imagine a situation where someone's got only one: does that influence their travel choice—when it shouldn't, by policy?

Mr Quinlivan : No, I agree with that.

CHAIR: So that the senator is not frustrated: is this the sort of information you would keep? Is this your push-button stuff? Or would you have to go—

Mr Quinlivan : I will ask the individuals.

CHAIR: Some of his earlier questions to take on notice are much broader than half a dozen people. About your travel, whether it's Qantas or—would you have that?

Mr Quinlivan : In that case it'll be a question of what's the policy and procurement practice and is there any evidence or record—

CHAIR: But you're going to ask the travel agency to provide that?

Mr Quinlivan : That's right, but there may be exceptions to the policy. We'll investigate.

Senator PATRICK: The Minister for Finance has provided that data, so it's clearly collected.

Mr Glyde : From the MDBA's perspective, we can provide you with the spend on Qantas compared to the spend on Virgin, and I think we can provide the other airlines. And, as Mr Quinlivan said, I can easily answer the question in relation to the Virgin Club and the Chairman's Lounge. There's one person in the MDBA who has access to those—

Senator PATRICK: I don't want them identified.

Mr Glyde : and that's me. It's in my conflict of interest disclosure, and I'm a member of both.

Senator PATRICK: There's no task for you, then, Mr Glyde.

Mr Glyde : Full disclosure.

Senator PATRICK: There could be potential savings for government if there's a skewing in the policy, for some reason, and my rough guess is probably $30 million.

Senator HANSON-YOUNG: I just want to close that loop on the question in relation to the royal commission. Mr Glyde, are you suggesting that you don't have a response to the proposition put out by the royal commission in their issues paper about the legal question of the requirement under the Water Act?

Senator Ruston: Would you like me to give you the government's position?

Senator HANSON-YOUNG: No, I'd like the MDBA—

Mr Glyde : I'm in the same situation as Mr Thompson has outlined to be able to say the government is still considering its position. We're still considering our position and seeking legal advice in that regard.

Senator HANSON-YOUNG: You are still seeking legal advice?

Mr Glyde : Considering our position.

Senator Ruston: Could I just clarify the question. The question is actually in relation to the second issues paper by the commissioner, in relation to the legality of—

Senator HANSON-YOUNG: Paragraph 2, page 5.

Senator Ruston: Let me just have a look at it.

Senator HANSON-YOUNG: Where it reads:

… the Commissioner is of the view that there is force in the proposition …

CHAIR: Which page are you on?

Senator HANSON-YOUNG: Page 5, Chair.

Mr Quinlivan : What paragraph, Senator?

Senator Ruston: What's the number?

CHAIR: Page 5 has got (a), (b), (c) or C.

Mr Quinlivan : We're aware of that—

Senator HANSON-YOUNG: The top paragraph states:

In short, the Commissioner is of the view that there is force in the proposition that the Water Act, properly defined, requires environmental considerations to be paramount, and that economic and social outcomes are irrelevant to the determination of an ESLT—

environmentally sustainable level of take—

and hence to the setting of a Basin-wide SDL.

Do you agree with that proposition?

Senator Ruston: The government is still taking advice on that. I thought you were talking about the legality of the plan. Yes, the government is still taking advice in relation to many of the propositions that have been put forward by the commissioner.

Senator HANSON-YOUNG: You're taking legal advice in relation to that proposition?

Senator Ruston: We're certainly taking advice, yes.

Senator HANSON-YOUNG: And, Mr Glyde—

Mr Glyde : In the same situation, Senator.

Senator HANSON-YOUNG: Taking legal advice?

Mr Glyde : Yes, considering our position.

Senator HANSON-YOUNG: When would you expect to have some understanding or some clarity in relation to that?

Mr Glyde : I don't have a date for that.

Senator HANSON-YOUNG: Would you anticipate having that advice prior to any response or submission as invited by the commission?

Mr Glyde : As Mr Thompson has said, we are considering our position in relation to the South Australian royal commission—

Senator HANSON-YOUNG: But—

CHAIR: His previous answer would have guided you, Senator. He says he doesn't know.

Senator HANSON-YOUNG: Sure, but—

CHAIR: So to ask him, 'Will it be before Christmas?'—

Senator HANSON-YOUNG: Chair, I'm really trying to be very clear about what the government's position is and what the MDBA's position is because the MDBA is meant to be independent. That's why I'm asking—

Mr Glyde : And what I'm saying is that we are in the process of considering our position and seeking legal advice.

Senator Ruston: But can I clarify that the government does consider that the Basin Plan was developed consistent with the requirements of the Water Act?

Senator HANSON-YOUNG: Sure. But that's not directly the proposition that's been outlined to you.

Senator Ruston: No, but I would just like to put on the record, for your information, that that is the position of the government.

Senator HANSON-YOUNG: That's the position of the government. But you don't have a position as to whether the SDLs are consistent with the Water Act?

Senator Ruston: No but, similarly, we do believe that there is a sound legal basis for the SDL adjustment mechanism in the Northern Basin Review.

Senator HANSON-YOUNG: So you do have legal advice suggesting that?

Senator Ruston: I'm saying to you the government believes that there is a sound legal basis for it. I don't have the legal advice, if there is any; however, that is the position of the government.

Senator HANSON-YOUNG: On what basis have you made that?

Senator Ruston: I'm just providing you with the position of the government.

Senator HANSON-YOUNG: Is that position based on legal advice that you've already obtained?

Senator Ruston: I am not aware of the specific advice that forms that basis. I am just advising you of the position of the government.

Senator HANSON-YOUNG: Minister, could you take on notice on what basis that position has been formed?

Senator Ruston: Yes, of course.

Senator HANSON-YOUNG: And whether any legal advice has been sought in developing that position?

Senator Ruston: Yes, of course.

Senator HANSON-YOUNG: I go to some issues closer back home, specifically in relation to the Murray mouth. Of course, section 5(c) of the plan itself outlines—and you'll know this, because I'm sure you all know the Murray-Darling Basin Plan backwards—ensuring that the mouth of the River Murray is open without the need of dredging in at least 95 per cent of years, with flows every year through the Murray mouth barrages. Mr Glyde, could you please inform us as to how often the Murray mouth has been dredged since 2012?

Mr Glyde : I might ask Mr Reynolds, who has responsibility for that program and can give you the accurate information.

Mr Reynolds : Dredging at the Murray mouth has been pretty much continuous since 2012, with some short periods when either there were high flows or conditions where the actual operation of the dredgers was not possible as a result of high swells and the like. While the Basin Plan has a target for keeping the mouth open without dredging; it's important to note that that's once the plan is fully implemented, and we have the ability to pass larger flows through the system so an implemented constraints strategy would need to be in place.

Senator HANSON-YOUNG: Isn't there a target specific to 2019?

Mr Reynolds : The ability to do that is still contingent on having access to the water and having the ability to pass significant flows through the system. That's going require implementation of the constraints management system. It's also important to understand that there's been a steady build-up of sand in the mouth over many years and it will take some period of time to reset that, including the likely need for at least a number of significant flood or large flow events, which we haven't had since 2012.

Senator HANSON-YOUNG: Can you just state for the record what the target in relation to 2019 is meant to be?

Mr Reynolds : Sorry, I don't have that at my—

Senator HANSON-YOUNG: Is it 95 per cent?

Mr Reynolds : That target in schedule five is a target that's associated with recovery of the 450 gigalitres of up water. Clearly that has not happened yet and is a program to be rolled out over time.

Senator HANSON-YOUNG: S, that 450 gigalitres is linked to the recovery target of ensuring that the Murray mouth is open 95 per cent of the time?

Mr Reynolds : Schedule 5 is a number of targets associated with additional benefits of recovering that up water.

Senator HANSON-YOUNG: And you're saying we're not going to be able to meet that by 2019?

Mr Reynolds : Without having that water recovered and implementation of the constraints strategy and other things, we won't get that result. I just need to clarify that I understand that the requirement is 2024 as opposed to 2019.

Senator HANSON-YOUNG: What is the 2019 target, then?

Mr Sharma : For 2019?

Senator HANSON-YOUNG: The intermediate targets for 30 June 2019.

Mr Sharma : The 2019 target—there is no such target as 2019. Targets are based upon either the 2,750 GL water recovery or the 3,200 water recovery. Within the Basin Plan, once you go to the 750 target, then the SDL offset was that we would be achieving the outcome part of it. So I'm not sure exactly of the question about the target—

Senator HANSON-YOUNG: 'Schedule 7—Targets to measure progress towards the objectives', as outlined.

Mr Sharma : The targets were primarily to drive the SDL adjustment offset part of it. Initially we had some site-specific flow indicators which were used for developing the Basin Plan. Once the Basin Plan was developed and the number was agreed, the SDL adjustment process was to achieve the outcome part of it. Schedule C talks about achieving the outcomes.

Senator HANSON-YOUNG: You're not very convincing. There's an intermediate target, isn't there?

Mr Sharma : Maybe I can take that question on notice.

Mr Glyde : I think we're struggling to figure out what you mean by the 2019 target and how it relates to the work that we're doing. From the sound of it, I'm not sure that I understand it. If we take it on—

Senator HANSON-YOUNG: I'm asking about how we are going in relation to the intermediate targets up to 30 June 2019, as they relate to the Murray Mouth and the Coorong?

Mr Glyde : I think we're struggling because we don't understand the—

Senator HANSON-YOUNG: Because it's not getting any better?

Mr Glyde : No. We just completed at the end of last year an evaluation of the outcomes of the plan over the first five years. I would hope that in that we would be reporting on progress with these sorts of things. I think we're struggling a bit to understand what you mean by the 2019 target, because it seems to be something that Mr Sharma is not aware of. That possibly would suggest we're wasting your time and we should come back to you with an answer on notice.

Senator HANSON-YOUNG: I'm happy to put some of these questions on notice.

Mr Glyde : My apologies for that.

Senator HANSON-YOUNG: Let's go back to the requirements of ensuring that for 95 per cent of the time = the Murray Mouth will remain open. Are we going to meet that?

Mr Reynolds : Once the plan is fully implemented and we have all of the water recovery and we have an implemented constraints management strategy that will enable us to achieve high flows across the border into South Australia and through the mouth, then our expectation is that we'll be close to that target or achieve that target. I guess it's a very dynamic system. We have some limited capability to model exactly what happens there, and we will have to adaptively manage that over time. But with the full water recovery and the ability to produce the larger flows that are required to scour sand from the mouth, that's the expectation.

Senator HANSON-YOUNG: Up until now—we're at mid-2018, and the plan has been in place since 2012—the Murray Mouth has had to continue to be dredged. Is that correct?

Mr Reynolds : Correct.

Senator HANSON-YOUNG: How many years have we got left to fix this?

Mr Reynolds : Full implementation of the plan is through to 2024. Recovery of the efficiency measures water is on that time frame, as is implementation of a constraint strategy. To get scour of sand from the mouth so that we don't need to dredge, we need flows in the order of 70,000 or 80,000 megs a day for an extended period. At the moment, we can only get that on the back of a natural flood. With a constraints management strategy in place we would be able to increase the peak of smaller floods to get that sort of flow at the Murray Mouth. Under those conditions, we will be able to scour a lot more sand from the mouth, and then the need for dredging would be greatly reduced, and, ideally, we won't need to do it at all.

Senator HANSON-YOUNG: When will we start to see positive impacts?

Mr Glyde : In terms of the opening of the Murray Mouth?

Senator HANSON-YOUNG: I visit there regularly and it's dredging all the time.

Mr Reynolds : We are dredging all the time. If we get some natural large flooding events, that will certainly make a big difference. Whether we get those or not, it is in the lap of the gods as to how much rain we get. Certainly, our ability to regulate flows to achieve the sorts of flows that are required to scour significant amounts of sand requires implementation of the Constraints Management Strategy. That is likely to continue on through till 2024.

Senator HANSON-YOUNG: Has there been any degradation of the condition of the Murray mouth since 2015?

Mr Reynolds : There is a build-up of sand. Sand fluctuates in the mouth. It depends—when we get storm events, more sand comes in; then we dredge and remove some of it. We're regularly moving dredges around to make sure that we hit the connectivity targets that have been set for the mouth—the exchange of sea water into the Coorong. We have managed to maintain those targets or maintain connectivity above the target levels throughout that period, but that's required dredging to do so.

Senator HANSON-YOUNG: In the original immediate targets, as outlined in the plan originally, between 2012 and 2019, should it have been that the conditions were improving, not getting worse?

Mr Reynolds : In terms of the measures we have for the connectivity at the mouth, we've been maintaining that above the threshold levels.

Senator HANSON-YOUNG: Except for the mouth being open?

Mr Reynolds : The mouth is open. It requires dredging to keep it open. The measure of the openness of the mouth is what we call the diurnal tide ratio. That measures the amount of fluctuation in water level inside the Coorong in comparison to the natural tide. There are threshold levels that have been established for that that are considered to be effective in keeping that connectivity open, and we've been above those threshold levels throughout that time.

Senator HANSON-YOUNG: Do you think we can meet that target of the Murray mouth being open 95 per cent of the time without securing the 450 gigalitres of water?

Mr Reynolds : I would expect we would need most of that water to be able to do that.

Senator HANSON-YOUNG: Most of it? All of it?

Mr Reynolds : The target has been set on the basis of recovering all of that water.

Senator HANSON-YOUNG: So we'd need that water in order to reach that target of keeping the Murray mouth open?

Mr Reynolds : It's likely.

Senator HANSON-YOUNG: When should we see the 450 gigalitres?

Mr Morris : That's probably a question for us because the department is responsible for recovering the water. We have until 2024 to recover that additional 450 gigalitres in efficiency measures.

Senator HANSON-YOUNG: So we've got to wait till 2024 before we even know if the Murray mouth might stay open?

Mr Morris : The Basin Plan, as agreed by all the states and the Commonwealth, was that we recover 450 gigalitres by 2024, and that's our plan and our target.

Senator HANSON-YOUNG: Minister, are you concerned by reports that the Victorian state government are still not committed to giving South Australia the extra 450 gigalitres?

Senator Ruston: I think we've still got a long way to go until 2024. It's pleasing to see that all of the states are back at the table now, after a period of some uncertainty following the disallowance of the Northern Basin Review. I think it's just incumbent on all of us, whether we're from New South Wales, Victoria, Queensland or South Australia, or the federal government, to work together. As you well know, Senator Hanson-Young, it's our state that stands to gain the most from the delivery of this plan in full, so, therefore, it stands to reason that it's our state that stands to lose the most if the plan isn't delivered. I consider it my absolute No. 1 priority in this role to make sure that all states come along on the journey so that we deliver the plan in full.

Senator HANSON-YOUNG: Are you happy to wait till 2024 to secure that 450 gigalitres?

Senator Ruston: It's a process over time. We've already identified today the process that's currently and imminently about to occur in relation to the putting out of an expression of interest statement in relation to projects for the 450 for the efficiency measures, or efficiency water. The best thing that we can do is to start now and work our way slowly towards reaching our targets in 2024. Certainly, the evidence that we got from the Ernst & Young report and other evidence that we've received at Minco suggests that, to do so in a systematic way will reduce the potential for negative socioeconomic impacts on the communities. As you know, that's one of the obligations that we have with this extra 450—to deliver it with no negative socioeconomic impacts. We're probably going to require the whole six years to get it done, but that's not to say that we're not going to do anything until the eleventh hour. We've got six years to do it in, so we shall.

CHAIR: Senator, as you manage yourself between now and when we adjourn, I need to let you know that the adjournment will be spot on time and brutal because I've got an economy-class airfare for five past 5. So, if you need to separate things on notice versus—

Senator HANSON-YOUNG: I have a stack of questions I'll put on notice. That's fine.

CHAIR: Thank you.

Senator HANSON-YOUNG: I just want to finish by making sure I'm clear to Mr Reynolds. I'd like a breakdown of how often Murray Mouth has had to be kept open with dredging since 2012, and I'd like to know, in relation to those other intermediate targets, as originally outlined in the plan between 2012 and 2019, how many of those have been met or not met in relation to the Lower Lakes, the Coorong and Murray Mouth.

Mr Reynolds : I'll take that on notice.

CHAIR: While we've got a tiny pause, I need to table—

Senator HANSON-YOUNG: I'm finished.

CHAIR: You're finished? All right. If you have no objection—I assume you haven't—we've got two emails here: one by Mr Phillip Glyde, dated 18 February 2018, at 9.03 pm. This is one of the staff memos. It looks like the first. The second staff memo—again, for the Hansard: Mr Phillip Glyde, dated 15 March 2018, 5.47 pm. With no objections, they are so tabled.

Mr Thompson : Chair, can I just confirm a response I gave to Senator Hanson-Young earlier about Mr Papps's letter to me. My office has done a quick check of when I first received that letter, and it was on 12 February, when the letter was public—so, after it was in the public domain was when I first became aware of it.

Senator HANSON-YOUNG: Thank you.

CHAIR: Mr Quinlivan, again, it's the end of a big week. A lot of people here have given up their Friday. Through you, we want to thank them for, in some cases, weeks and months of effort. I know everyone loves estimates and looks forward to it, but, nonetheless, it's trying. To you, Minister, thank you for your cooperation. To our secretariat and Hansard—always a first-class job. We'll now adjourn so that some of us can go to our economy-class flights. The others can go straight to the pub! Safe travel!

Committee adjourned at 15:52