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Water Amendment (Review Implementation and Other Measures) Bill 2015

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2013-2014-2015

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

WATER AMENDMENT (REVIEW IMPLEMENTATION AND OTHER MEASURES) BILL 2015

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Agriculture and Water Resources

the Hon. Barnaby Joyce MP)



 

 



WATER AMENDMENT (REVIEW IMPLEMENTATION AND OTHER MEASURES) BILL 2015

 

GENERAL OUTLINE

 

The Water Amendment (Review Implementation and Other Measures) Bill 2015 (the Bill) makes the legislative amendments required to implement the Government’s response to the Report of the Independent Review of the Water Act 2007 (the Water Act Review). The Bill also makes a number of minor or technical amendments unrelated to the Water Act Review.

 

Specifically, the Bill includes provisions to:

·         provide for five-yearly reviews of the social and economic impacts of the Basin Plan 2012 (the Basin Plan) and streamline and postpone some Basin Plan reviews;

·         clarify arrangements for accreditation of first generation state water resource plans (expected by 1 July 2019) and provide for future accreditation to be linked to Basin Plan review outcomes;

·         provide increased flexibility for the Commonwealth Environmental Water Holder to trade by allowing investment in other non-water environmental activities and in circumstances where water allocations may be reduced or foregone in continuous accounting water systems;

·         provide for greater incorporation of Indigenous expertise and knowledge in the governance of the Basin’s water resources;

·         repeal Part 5 of the Water Act, removing the power for the Murray-Darling Basin Authority (the Authority) to establish a Water Rights Information Service, which was never utilised;

·         make clarifying amendments to definitions relating to irrigation operators;

·         allow the water charge rules to provide that the Australian Competition and Consumer Commission (ACCC) can extend the period of effect of a determination or approval of regulated water charges; and

·         make minor administrative and technical amendments.

 

Background

 

The Water Act 2007 (the Water Act) provides the legislative framework for managing Australia’s largest water resource - the Murray-Darling Basin (the Basin) - in the national interest, as well as for providing information on Australia’s water resources.

 

The Water Act Review was prepared by an eminent panel of experts chaired by Mr Eamonn Moran PSM QC and was developed following extensive consultation with all state and territory governments and interested stakeholders. The report made 23 recommendations to amend the Water Act and to amend or review its subordinate instruments, in ways that improve its effective operation. The review report was tabled out of session in the Parliament on 19 December 2014. The Government’s response accepts all recommendations made in the Water Act Review, with two recommendations agreed in part (recommendation 9 and 21). The Bill makes the legislative amendments that are required to implement the Government’s response to the Water Act Review’s recommendations.

 

Consultation

 

All Basin States (Queensland, New South Wales, the Australian Capital Territory, Victoria and South Australia), key industry groups, environmental organisations, and Basin Indigenous groups have been consulted on an exposure draft of the Bill.

 

All amendments to provisions that rely on referrals of Basin State legislative power have been approved by referring Basin States (Queensland, Victoria, New South Wales and South Australia). This is required under the Agreement on Murray-Darling Basin Reform of 2008.

 

Financial Impact Statement

Nil. The Bill does not appropriate funds. All new measures are being implemented within existing resourcing of relevant portfolios and within existing Environmental Water Holdings Special Account (the Special Account) arrangements.



 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Water Amendment (Review Implementation and Other Measures) Bill 2015

 

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the Bill

The Water Amendment (Review Implementation and Other Measures) Bill 2015 (the Bill) makes the legislative amendments required to implement the Government’s response to the Report of the Independent Review of the Water Act 2007 (the Water Act Review). The Bill also makes a number of administrative or technical amendments unrelated to the Water Act Review.

 

Human rights implications

The Bill engages the right to an adequate standard of living, including food, water and housing, and the right to enjoy and benefit from culture.

 

The Bill engages the right to an adequate standard of living and the right to health in the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to an adequate standard of living is protected in Article 11 of the ICESCR and the right to physical and mental health is protected in Article 12 of the ICESCR. The Committee on Economic, Social and Cultural Rights, established to oversee the implementation of the ICESCR, has interpreted these articles as including a human right to water, which encompasses an entitlement to “sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic uses”.

 

The human rights implications of this Bill in relation to the right to an adequate standard of living must be considered in the context of the Water Act 2007 (the Water Act). The overall framework of the Water Act supports access to sufficient, safe, acceptable and physically accessible water for personal and domestic uses. This is reflected in the Water Act by section 20, which sets out the purpose of the Basin Plan and is supported through subsection 22(1), which sets out the specific content required to be included in the Basin Plan 2012 (the Basin Plan), such as a water quality and salinity management plan (see Chapter 9 of the Basin Plan). Also, paragraph 86A(1)(a) requires that the Basin Plan be prepared having regard to the fact that the Commonwealth and the Basin States have agreed that critical human water needs are the highest priority water use for communities who are dependent on Basin water resources.

 

The Bill also engages the right to enjoy and benefit from culture in article 15 of the ICESCR and article 27 of the International Covenant on Civil and Political Rights. The UN Human Rights Committee has said that culture may include the use of land resources, including traditional activities such as hunting or fishing.

 

The Bill gives effect to the Government’s response to recommendation 1 of the Water Act Review. Recommendation 1 recommends that the Water Act be amended to include a new section that reflects existing water resource plan requirements in the Basin Plan dealing with Indigenous values and uses (Part 14 of Chapter 10 of the Basin Plan 2012).

 

The Bill supports the right to enjoy and benefit from culture by requiring that the Basin Plan must include requirements relevant to having regard to the social, spiritual and cultural matters relevant to Indigenous Australians (item 22 of Schedule 1). This amendment acknowledges existing water resource plan requirements in the Basin Plan (see Part 14 of Chapter 10 of the Basin Plan 2012). Additionally, the Bill introduces new requirements for the Murray-Darling Basin Authority to engage with the Indigenous community about the use of water resources in the Basin and to include Indigenous persons on the Basin Community Committee (items 23-25 of Schedule 1).

 

Conclusion

The Bill is compatible with human rights because it promotes the protection of human rights.

 

The Hon. Barnaby Joyce MP, Minister for Agriculture and Water Resources



 

WATER AMENDMENT (REVIEW IMPLEMENTATION AND OTHER MEASURES) BILL 2015

 

NOTES ON ITEMS

 

Clause 1          Short Title

 

1.          Clause 1 is a formal provision specifying that the Act may be cited as the Water Amendment (Review Implementation and Other Measures) Act 2015 .

 

Clause 2          Commencement

 

2.          Clause 2 provides for the commencement of the Act:

·       sections 1-3 commence on the day that the Act receives the Royal Assent;

·       item 1 of Schedule 1 commences on 1 January 2020, to allow time for the Basin Plan to be amended to incorporate the required changes;

·       items 2 to 9 of Schedule 1; Parts 2 to 6 of Schedule 1; and Part 3 of Schedule 2 commence the day after the Act receives the Royal Assent;

·       Part 1 of Schedule 2 commences immediately after the commencement of Schedule 1 to the Water Amendment Act 2008 (Water Amendment Act); and

·       Part 2 of Schedule 2 commences when Schedule 1 to the Acts and Instruments (Framework Reform) Act 2015 commences, or on the day after the Act receives the Royal Assent, whichever is later.

 

Clause 3          Schedules

 

3.          Clause 3 provides that legislation specified in a schedule to this Act is amended or repealed as set out in the applicable items of the schedule concerned and that any other item in a schedule to this Act has effect according to its terms.

 

Schedule 1—Amendments arising from review of the Water Act 2007

 

Part 1—Reviews and reporting requirements

 

Water Act 2007

 

Item 1                         Subsection 22(1) (at the end of the cell at table item 13, column headed “Specific requirements”)

 

4.          This item amends item 13 of subsection 22(1) to add a new specific requirement to the program for monitoring and evaluating the effectiveness of the Basin Plan. The amendment provides that, in addition to five-yearly reviews of the water quality and salinity targets in the water quality and salinity management plan, and the environmental watering plan, the program will also include a five-yearly review of the social and economic impacts of the Basin Plan.

 

 

 

5.          The amendment further specifies that the program must provide for the first of each of these reviews to be completed before the end of 2020. This will require consequential amendments to the program for monitoring and evaluating the effectiveness of the Basin Plan (Chapter 13 of the Basin Plan 2012) to include the new requirement for five-yearly reviews of the social and economic impacts, and to delay the timing of existing reviews of the water quality salinity management plan targets and environmental watering plan to 2020. Currently these existing reviews are required to be completed every five years after the commencement of the Basin Plan (that is, from 2017 onwards).

 

6.          This item gives effect to the Government’s response to recommendation 2 of the Water Act Review.

 

Item 2             Subsection 49A(1)

 

7.          This item repeals existing subsection 49A(1) and substitutes a new subsection providing that the Authority must provide advice to the Murray-Darling Basin Ministerial Council on the impacts of the Basin Plan before the end of 2020.

 

8.          Item 2 gives effect to the Government’s response to recommendation 4(b)(i) of the Water Act Review by postponing the timing of this advice from 2017 to 2020. This change is part of a broader alignment of Basin Plan reviews and evaluations aimed at ensuring reviews are conducted, and advice provided, at a time when Basin Plan outcomes can be more fully assessed, noting the commencement of sustainable diversion limits on 1 July 2019.

 

Item 3             Paragraph 50(1)(a)

 

9.          Item 3 specifies that the first of the regular 10-yearly reviews of the Basin Plan should take place during 2026 instead of during the tenth year of the period that starts when the Basin Plan first takes effect (that is, in 2022).

 

Item 4             At the end of Section 50

 

10.      Item 4 inserts a new subsection 50(6) which provides that the review requirements in subsection 50(5) must be complied with before the end of the year during which the review is conducted. For example, for the first 10-yearly review conducted during 2026 (see item 3) the Authority must prepare a report of the review, provide copies of the report to the Commonwealth Minister and the relevant State Minister for each Basin State and publish the report before the end of 2026. Subsequent 10-yearly reviews must also be completed and published before the end of the year in which they are conducted.

 

11.      Items 3 and 4 implement the Government’s response to recommendation 4(a) of the Water Act Review. Reviewing the Basin Plan in 2026 ensures that the review is undertaken at a time when outcomes can be assessed given the commencement of sustainable diversion limits on 1 July 2019.

 

Item 5             At the end of Division 1 of Part 2

 

12.      This item inserts a new Subdivision H to Division 1 of Part 2 of the Water Act. Subdivision H sets out the requirements for the annual analysis of the Basin Plan’s effectiveness (an “annual effectiveness report”) at new section 52A. These requirements include that the Authority must conduct an analysis of the Basin Plan’s effectiveness after the end of each financial year and provide a written copy of the annual effectiveness report to the Minister within six months of the end of the financial year. The annual effectiveness report must then be tabled in each House of the Parliament within 15 sitting days and a copy must be given to each member of the Murray-Darling Basin Ministerial Council.

 

13.      The item gives effect to the Government’s response to recommendation 22 of the Water Act Review by separating the preparation and delivery of the annual effectiveness report by the Authority from the Authority’s annual report. This ensures that there is sufficient time for the Authority to collate relevant Basin State information that, pursuant to section 71 of the Water Act, must be provided within four months of the end of a water accounting period. Section 3.08 of the Basin Plan specifies that a water accounting period is a financial year.

 

14.      Taking the 2018-19 annual effectiveness report as an example, the Authority would receive Basin State information by 31 October 2019, collate the report and provide it to the Minister by 31 December 2019. The Minister would then table the report within 15 sitting days of its receipt and copies would be provided to members of the Ministerial Council.

 

Item 6             Paragraph 214(3)(a)

 

15.      This item repeals paragraph 214(3)(a), which requires that the annual report of the Authority include an analysis of the effectiveness of the Basin Plan. This paragraph is no longer required as a result of item 5, which separates the requirement to report on the effectiveness of the Basin Plan from the Authority’s annual report. Together with item 5, this item gives effect to the Government’s response to recommendation 22 of the Water Act Review.

 

Item 7                         Subsection 253(1)

 

16.      This item reschedules the next review of the Water Act by omitting “2014” and inserting “2024” as the date of the next review.

 

17.      The item gives effect to the Government’s response to recommendation 23 of the Water Act Review. This change is part of a broader alignment of Basin Plan reviews and evaluations. A 2024 review of the Water Act will be informed by the five-yearly audit of the Basin Plan due by 2023 (see Part 3 of the Water Act) and may inform the next Basin Plan review in 2026 (see items 3 and 4).

 

 

Item 8                         Subsection 253(2)

 

18.      This item repeals subsection 253(2) and provides that the terms of reference for the 2024 review of the operation of the Water Act will be determined by the Minister in consultation with the States (see also  item 7 which changes the date of the next review to 2024). The item gives effect to the Government’s response to recommendations 10 and 23 of the Water Act Review.

 

Item 9             Annual analysis of Basin Plan’s effectiveness

 

19.      This item clarifies the application of items 5 and 6 in the first year of its operation and does not amend the Water Act. Item 9 provides that the amendments relating to the Authority’s annual report and the annual analysis of the Basin Plan’s effectiveness apply either:

·       in the financial year that ends on or after the commencement of the amendment, or;

·       if the financial year ends before the commencement of this amendment but the Authority has not provided the annual report to the Minister, in that financial year.

 

20.      For example, if this amendment commences before the end of the 2015/16 financial year, the Authority will provide a report of the analysis of the Basin Plan’s effectiveness in 2015/16 to the Minister by the end of December 2016, separately from the 2015/16 annual report. Alternatively, if the amendment commences after the end of the 2015/16 financial year and the annual report of 2015/16 has not yet been given to the Minister, the Authority will be required to prepare a report of the Basin Plan’s effectiveness in 2015/16 and provide it to the Minister by the end of the December 2016, separate from the 2015/16 annual report.

 

Part 2—Accrediting water resource plans

 

Water Act 2007

 

21.      The following items (10-20) align the accreditation cycle of water resource plans with the 10 yearly cycle of section 50 reviews. These changes are consequential to recommendation 4(a) of the Water Act Review that recommended that the first section 50 review of the Basin Plan be postponed to 2026 to ensure that the outcomes of the implementation of the Basin Plan can be adequately analysed and evaluated.

 

22.      These changes are necessary because, under the current accreditation arrangements, the 2026 review and any subsequent amendments are unlikely to be complete before many water resource plans require remaking (noting that plans accredited as early as 2016 will require reaccreditation by 2026).

 

23.      The new arrangements have a number of benefits:

·       Water resource plans will only need to be remade when there have been changes to the Basin Plan as a result of a section 50 review. This will reduce the regulatory burden associated with having to reaccredit water resource plans simply because they are older than 10 years, even though they remain consistent with the Basin Plan and relevant for state water management purposes.

·       All water resource plans will be accredited against the same version of the Basin Plan. This will improve the consistency of water management approaches across the Murray-Darling Basin.

·       Changes to the Basin Plan as a result of section 50 reviews will be adopted by all water resource plans within three years. This means that changes to Basin Plan water management approaches will be reflected in Basin State water management plans in a timely manner, consistent with adaptive management principles.

 

24.      The new arrangements also incorporate recommendation 5 of the Water Act Review, which recommends that the Water Act allow flexibility for Basin States to nominate a more recent version of the Basin Plan to be used when accrediting a water resource plan other than that specified in section 56.

 

Item 10           Subsection 4(1)

 

25.      This subsection inserts new definitions to assist with the operation of new subsection 48(8) (see item 11) by defining what “affects water resource plan accreditations” and “notifiable instrument” mean. Together, these new terms clarify the process the Minister needs to observe following a section 50 review, and subsequent amendment of the Basin Plan.

 

Item 11           At the end of section 48

 

26.      This new subsection compels the Minister to provide notification that an amendment to the Basin Plan affects water resource plans if the amendment has been prepared by the Authority as a result of a section 50 review of the Basin Plan. The notification must be made by “notifiable instrument”, as defined in new subsection 4(1) (see item 10). The making of a notifiable instrument ensures that it is clear that an amendment has been made as a result of a section 50 review and will cause all water resource plan accreditations to expire after a period of three years. This item also includes a note clarifying that existing water resource plans will generally cease to have effect three years after the Minister has issued a notifiable instrument determining that an amendment “affects water resource plan accreditations”.

 

Item 12           Section 52 (note)

 

27.      This item amends the heading of the note following section 52 to provide for the insertion of a new note.

 

Item 13           At the end of section 52

 

28.      This new note clarifies that an amendment made to the Basin Plan as a result of a review of the Basin Plan under section 50 will be an amendment that “affects water resource plan accreditations”. It also clarifies that, generally, existing water resource plans will cease to have effect three years after the Minister has issued a notifiable instrument determining that an amendment “affects water resource plan accreditations”.

 

Item 14           Before subsection 56(1)

 

29.      This item inserts the subtitle “Matters to which Authority and Minister are to have regard”. This clarifies the purpose of subsection 56(1) in relation to the other subsections of revised section 56. This is necessary due to the increased length and detail of revised section 56.

 

Item 15           Subsection 56(2)

 

30.      This item repeals subsection 56(2) and replaces it with new subsections 56(2) and (2A).

 

31.      New subsection 56(2) clarifies that, subject to subsection 56(2A), the version of the Basin Plan to be applied by the Authority and the Minister when accrediting and making water resource plans is the Basin Plan in effect when the plan is accredited or made.

 

32.      New subsection 56(2A) sets out four specific scenarios and specifies which version of the Basin Plan is to apply in each case. These scenarios are described in the table below.

 

33.      The arrangements applying in the each of these scenarios recognise that water resource plans take a period of time to prepare and the Basin Plan may change during that time. Specifying a version of the Basin Plan that will apply in these scenarios provides certainty for Basin States, subject to the water resource plan being submitted within a specified period.

 

Version of Basin Plan to be applied when a water resource plan is given to the Minister under Subdivision D

Notes

1

Table item 1 provides that if the report of the first section 50 review of the Basin Plan has not been provided to the Minister when the proposed water resource plan is given to the Minister under subsection 63(3), the Basin Plan to be applied at the time of accreditation is the Basin Plan in effect two years before the proposed water resource plan is given to the Minister.

This maintains the current accreditation arrangements set out in the unamended subparagraph 56(2)(b) in the Water Act for the first round of water resource plans (i.e. before the first section 50 review of the Basin Plan, proposed to be conducted in 2026, see items 3 and 4 of this Bill). This recognises that Basin States are already in the process of preparing the first round of water resource plans for accreditation.

2

Table item 2 provides that if a water resource plan is given to the Minister within three years of a Basin Plan amendment that affects water resource plan accreditation coming into effect, the Basin Plan to be applied is the Basin Plan in effect immediately after the amendment is made. A Basin Plan amendment that affects water resource plan accreditation is an amendment arising from a section 50 review (see also items 10 and 11).

If an amendment that affects water resource plan accreditations comes into effect, all water resource plan accreditations will expire after a period of three years, as per revised section 64 - “Duration of accreditation” (see items 17-20).

3

Table item 3 provides that if a water resource plan is given to the Minister within three years of a section 50 review report being given to the Minister and no amendment to the Basin Plan has been made as a result of the review, the Basin Plan to be applied is the version in effect immediately before the report was handed to the Minister.

This scenario recognises that, in the absence of an amendment that affects water resource plans, Basin States may nevertheless wish to review and revise some or all of their water resource plans for state reasons or because the water resource plans cease to continue under state law.

4

Table item 4 allows a Basin State to nominate a version of the Basin Plan when submitting a water resource plan for accreditation, provided the version nominated is not older than the version that would apply under table items 1, 2 or 3.

This item gives effect to the Government’s response to recommendation 5 of the Water Act Review by providing flexibility for Basin States to nominate a more recent version of the Basin Plan to be applied for the purposes of accreditation.

 

Item 16           Before subsection 56(3)

 

34.      This item inserts the subtitle “Minister to have regard to Authority’s advice”. This clarifies the purpose of existing subsection 56(3) in relation to the other subsections of revised section 56. This is necessary due to the increased length of, and detail in the revised section 56. 

 

Item 17           Subsection 64(1)

                       

35.      Item 17 replaces subsection 64(1) with a new subsection that provides that water resource plans are accredited until three years after an amendment to the Basin Plan that affects water resource plan accreditation or until the plan ceases to have effect under the State water management law, whichever is the earlier. An amendment to the Basin Plan that affects water resource plan accreditation is any amendment made as a result of a section 50 review of the Basin Plan (as defined at new subsection 48(8)).

 

Item 18           Subsection 64(2)

 

36.      This item is consequential to item 17 and clarifies that the duration of accreditation is the three year period outlined in new subsection 64(1) (see item 17). The amendment does not otherwise change the Minister’s powers in relation to extensions of accreditation.

 

Item 19           Subsection 64(4)

 

37.      This item repeals subsection 64(4) and substitutes a new subsection 64(4) which provides that an extension or further extension made under 64(2) (see item 18) must not extend the three year period referred to in subsection 64(1) by more than one year. This retains the ability of the Minister to extend accreditation by up to one year. This item is consequential to items 17 and 18.

 

Item 20           Duration of accreditation

 

38.      This item is an application provision only and does not amend the Water Act. It provides that section 64 as amended by the Bill applies to water resource plans that have been accredited before the commencement of this Part of the Water Act.

 

39.      The amendments to section 64 do not have retrospective effect. However, once the amendments to section 64 commence, they will apply prospectively to water resource plans that have been accredited.

 

Part 3—Indigenous matters relevant to Basin water resources

 

Water Act 2007

 

Item 21           Subsection 4(1)

 

40.      This item inserts the definition of “Indigenous person” into subsection 4(1) of the Water Act. An Indigenous person is defined to mean a person who is a member of the Aboriginal race of Australia; or a descendant of an Indigenous inhabitant of the Torres Strait Islands. The definition is required for item 25, which amends the Water Act to require that the Basin Community Committee’s membership include at least two Indigenous persons.

 

Item 22           After paragraph 22(3)(c)

 

41.      The Basin Plan must include water resource plan accreditation requirements relating to the sustainable use and management of the water resources of a water resource plan area (table item 11 of section 22(1)). Section 22(3) of the Water Act specifies various matters that must be included in the water resource plan accreditation requirements. This item inserts paragraph 22(3)(ca), which specifies that the Basin Plan must include water resource plan requirements relevant to having regard to the social, spiritual and cultural matters relevant to Indigenous people in relation to the water resources of a water resource plan area in the preparation of the water resource plan.

 

42.      This amendment is intended to acknowledge the existing water resource plan requirements in Part 14 of Chapter 10 of the Basin Plan - Indigenous values and uses - and therefore does not require any consequential changes to the Basin Plan. For clarity, nothing in this amendment will require specific water entitlements or reduce availability or affect the reliability of existing water access rights.

 

43.      The item gives effect to the Government’s response to recommendation 1 of the Water Act Review.

 

Item 23           After paragraph 172(1)(i)

 

44.      This item inserts paragraph 172(1)(ia), to add to the Authority’s functions engaging the Indigenous community on the use and management of Basin water resources.

 

45.      This item gives effect to the Government’s response to recommendation 20(b) of the Water Act Review.

 

Item 24           At the end of subsection 178(3)

 

46.      To be eligible for appointment as an Authority member a person must have a high level of expertise in one or more fields relevant to the Authority’s functions which are defined by section 178(3). This item inserts paragraph 178(3)(h), which adds Indigenous matters relevant to Basin water resources as a field relevant to the Authority’s functions.

 

47.      This item gives effect to the Government’s response to recommendation 20(a) of the Water Act Review.

 

Item 25           Paragraph 202(5)(c)

 

48.      The Basin Community Committee is established by the Water Act to advise the Authority on matters including engaging the community in preparation of each draft of the Basin Plan; community matters relating to the Basin water resources; and matters referred to the Committee by the Authority. Currently the Committee must include at least one individual with expertise in Indigenous matters. The item amends that requirement to provide that the membership of the Basin Community Committee consists of at least two Indigenous individuals with expertise in Indigenous matters.

 

49.      This item gives effect to the Government’s response to recommendation 20(c) of the Water Act Review.

 

Part 4—Trading by Commonwealth Environmental Water Holder

 

Water Act 2007

 

Item 26           Subsection 86AE(2)

 

50.      Section 86AE(2) provides that the relevant purposes and objectives for managing and disposing of Commonwealth environmental water holdings that were acquired with amounts debited from the Special Account (established by Part 2AA of the Water Act) are those of the Basin Plan environmental watering plan; not objectives that relate to areas outside the Murray-Darling Basin. This item amends paragraph references to reflect amendments to section 106.

 

Item 27           Section 106

 

51.      This item repeals and replaces section 106 with the paragraphs outlined below.

 

Subsection 106(1)

 

52.      The Commonwealth Environmental Water Holder can only trade to meet environmental objectives, not as a profit-making enterprise. Trade is enabled both when water is not required and would otherwise be forfeited or foregone, or when selling water or Commonwealth environmental water holdings would allow the Commonwealth Environmental Water Holder to better protect or restore environmental assets. This is to ensure that the highest priority environmental assets can receive water effectively.

 

53.      The following subsections provide increased flexibility for the Commonwealth Environmental Water Holder to dispose of (sell) water and Commonwealth environmental water holdings and for the use the proceeds consistent with the existing overarching governance framework for the Commonwealth Environmental Water Holder, both in terms of its functions and objectives for trade.

 

54.      Consistent with subsection 105(4) for the disposal of water or Commonwealth environmental water holdings in the Murray-Darling Basin, the environmental objectives are those in the Basin Plan environmental watering plan (Chapter 8 of the Basin Plan).

 

Subsection 106(2)

 

55.      This subsection enables the Commonwealth Environmental Water Holder to sell water that is not required during the water year to meet relevant environmental objectives and cannot be carried over to the next water year (that is, it will be forfeited) or, if by retaining the water, it could reasonably be expected to result in reductions in future allocations (that is, water is likely to be foregone).

 

56.      Allowing the sale of water that could otherwise lead to future allocations being foregone introduces new flexibility to sell water (allocations) and ensure that the Commonwealth’s portfolio of water entitlements is used as effectively and efficiently as possible to deliver environmental objectives.

 

57.      This amendment gives effect to the Government’s response to recommendation 16 of the Water Act Review.

 

Subsection 106(3)

 

58.      This subsection enables the Commonwealth Environmental Water Holder to sell water allocations and use the revenue to invest in environmental activities, and/or purchase water, where this is reasonably expected to provide greater capacity to achieve environmental objectives from Commonwealth environmental watering than retaining the allocations. It recognises that in some circumstances the intended environmental outcomes from the application of Commonwealth environmental water can be more effectively achieved by investing in works and measures that are complementary to environmental water use, and not always by purchasing additional water.

 

59.      Environmental activities can encompass a broad range of investments that improve the effectiveness of Commonwealth environmental watering and could include, for example, fish-ways or carp exclusion screens that support the delivery of water to off-river wetlands. By selling a small volume of allocations in one year to fund the construction of such works, it could improve the effectiveness of larger volumes of environmental water delivered over several years, thereby improving environmental outcomes. Particular environmental activities are not prescribed or defined, which provides the flexibility to respond to changing priorities and invest in the activities that provide the best environmental outcomes possible based on conditions at the time. This provision is intended to enable additional targeted activities that complement, rather than duplicate or replace, natural resource management programmes implemented by other entities. Proceeds from allocation sales will not be used for bridging the gap or supply, efficiency or constraints measures under the sustainable diversion limit adjustment mechanism. As these activities will be funded from other sources, selling allocations to substitute for other funding would not be likely to improve environmental outcomes compared to retaining the allocations. The definitions of supply and efficiency measures under the Basin Plan also preclude them from being funded from the proceeds of allocation sales by the Commonwealth Environmental Water Holder.

 

60.      The amended subsection retains the requirement to use proceeds from the sale of water entitlements to purchase water or Commonwealth environmental water holdings (a key safeguard recommended in the Water Act Review). It also retains the Commonwealth Environmental Water Holder’s ability to use proceeds from the sale of water allocations to purchase water or Commonwealth environmental water holdings.

 

61.      The amended subsection retains a number of other requirements for the use of proceeds from the sale of water and Commonwealth environmental water holdings. Trade proceeds will need to be credited to the Special Account in order to enable the Commonwealth Environmental Water Holder to give effect to his or her reasonable belief at the time of disposal that environmental outcomes would be improved. Funds from the Special Account need to be used in the performance of the functions of the Commonwealth Environmental Water Holder, consistent with requirements for the Account. Water and Commonwealth environmental water holdings in the Murray-Darling Basin must be managed in accordance with the Basin Plan environmental watering plan, meaning that proceeds from the sale of water and Commonwealth environmental water holdings in the Basin must be invested in the Basin.

 

62.      New subsection 106(3)(b) provides that the proceeds of a disposal of a water allocation may only be used for environmental activities if the requirement in relation to the long-term annual diversion limit is satisfied. Subsections 106(5-6) set out the requirements that must be met to satisfy the long-term annual diversion limit condition referred to in subsection 106(3)(b). This is intended to ensure that the Commonwealth Environmental Water Holder’s ability to trade continues to support the Water Act’s object to return the Murray-Darling Basin to sustainable levels of extraction through the sustainable diversion limits under the Basin Plan and does not impact on the achievement of the sustainable diversion limits in the long-term, a key safeguard recommended in the Water Act Review.

 

63.      This amendment, together with the additional subsections 106(4) to (6), gives effect to the Government’s response to recommendation 15 of the Water Act Review.

 

Subsection 106(4)

 

64.      This subsection clarifies that proceeds from trade under section 106(3) cannot be used to pay for fees and charges for holding and delivering Commonwealth environmental water. The subsection is intended to support the environmental objects of the Water Act and Basin Plan by ensuring that these are not compromised as a result of water that has been acquired for the purpose of meeting environmental objectives being sold to meet non-discretionary fees and charges associated with operating costs. The subsection is also intended to limit the potential for adverse market impacts, which may arise if the Commonwealth Environmental Water Holder were required to approach the market with the aim of raising funds to cover its non-discretionary operating costs.

 

65.      The Commonwealth Environmental Water Holder continues to pay all fees and charges for the holding and delivery of environmental water from appropriations made to the Special Account, and not from trade proceeds.

 

Subsection 106(5)

 

66.      Subsection 106(3)(b) provides that the proceeds from a sale of water allocations may only be used for environmental activities if the Commonwealth Environmental Water Holder is satisfied that the long-term annual diversion limit has been complied with in the resource unit where the disposal is to take place.

 

67.      Satisfaction that the long-term annual sustainable diversion limit has been complied with for the purposes of section 106(3)(b) is a decision for the Commonwealth Environmental Water Holder that must be based on information published by the Authority prior to the disposal. Under the Basin Plan, the Authority is required to publish registers of take that record any difference between annual actual take and annual permitted take and a cumulative balance for each sustainable diversion limit resource unit (see Part 4, Division 1 of Chapter 6 of the Basin Plan 2012).

 

Subsection 106(6)

 

68.      This subsection provides that the condition relating to long-term sustainable diversion limits in new subsection 106(5) does not restrict the use of the proceeds of trade under section 106(3) before the sustainable diversion limits come into effect and registers of take are published by the Authority.

 

Item 28           After paragraph 114(2)(a)

 

69.      This item promotes transparency and accountability by requiring the Commonwealth Environmental Water Holder to publish information on the trade of water and Commonwealth environmental water holdings, and the purposes for which proceeds from trades are used, in its annual report.

 

70.      This amendment gives effect to the Government’s response to recommendation 17 of the Water Act Review.

 

Item 29           Annual report of the Commonwealth Environmental Water Holder

 

71.      This item ensures that the reporting requirement inserted by item 28 does not require the Commonwealth Environmental Water Holder to amend previous annual reports. It provides that the requirement of the Commonwealth Environmental Water Holder to include information in its annual report on the disposal of water and Commonwealth environmental water holdings, and the purposes for which proceeds from disposals are used, applies only where the disposal or use of proceeds takes place on or after the day these amendments commence (the day after Royal Assent).

 

Part 5—Murray-Darling Basin Water Rights Information Service

 

Water Act 2007

 

Item 30           Subsection 4(1) (definition of registrable water rights )

 

72.      This item repeals the definition of registrable water rights in subsection 4(1) of the Act. This item is consequential to the repeal of Part 5 of the Act (see items 31 and 32). The term only has effect in relation to the Murray-Darling Basin Water Rights Information Service and is now redundant.



Item 31           Part 5

 

73.      This item repeals Part 5 of the Water Act (the Murray-Darling Basin Water Rights Information Service).

 

74.      The Water Rights Information Service was designed to facilitate the operation of efficient water markets and minimise costs for market participants by providing information about the Basin that is easy to access and consistent. It was intended to be a facilitative mechanism only and was not intended to replace state-based registers. Prime responsibility for water access rights information, including responsibility for keeping information up to date, has and will continue to rest with Basin States.

 

75.      The Water Rights Information Service has not been established and there are no plans to establish it in the future.

 

76.      Each Basin State maintains registers under relevant state water management legislation. Other registers are also operated by infrastructure operators. Several initiatives undertaken by the Commonwealth are also contributing to the availability of water rights information. These include:

·       the Basin Plan water trading rules - these  require certain information to be made publicly available in a central location (via the Authority) to facilitate the operation of efficient water markets and opportunities for trading; and

·       water market information collected by the Bureau of Meteorology - this is made publicly available through regular web-based water market reports. It is also presented in the Australian water markets report (previously prepared by the former National Water Commission, but to be prepared in future by the Australian Bureau of Agricultural and Resource Economics and Sciences).

 

Item 32           Subparagraph 172(1)(a)(ii)

 

77.      This item repeals subparagraph 172(1)(a)(ii), which conferred on the Authority a function in relation to Part 5. Following the repeal of Part 5, this subparagraph is redundant.



Part 6—Miscellaneous amendments

 

Water Act 2007

 

Item 33           Subsection 4(1) (definition of bulk water charge )

 

78.      This item makes a minor amendment to the definition of “bulk water charge” to clarify that bulk water charges means charges that are payable for either or both the storage of water for, or the delivery of water to, the persons described in the definition.

 

79.      This item gives effect to the Government’s response to recommendation 13 of the Water Act Review.

 

Item 34           Subsection 7(1)

 

80.      This item makes a minor amendment to an existing provision relating to the definition of infrastructure operators and water service infrastructure. The amendment clarifies if a person owns or operates infrastructure for the purposes of storing, delivering or draining water (or for more than one of those purposes) for the purpose of providing a service to a person who is not the owner or operator of the infrastructure, the person is an infrastructure operator and the infrastructure is water service infrastructure.

 

81.      This item gives effect to the Government’s response to recommendation 13 of the Water Act Review.

 

Item 35           Subsection 7(4)

 

82.      This item makes a minor amendment to an existing provision relating to the definition of irrigation infrastructure operator and irrigation networks. This amendment clarifies that i f a person is an Infrastructure Operator by virtue of being an owner of water service infrastructure (according to section 7(1)) but their infrastructure is operated by another person for the purpose of delivering water for the primary purpose of being used for irrigation, the owner will also be an Irrigation Infrastructure Operator.

 

83.      This item gives effect to the Government’s response to recommendation 13 of the Water Act Review.

 

Item 36           Subsection 74(4)

 

84.      Subdivision A of Part 2 to Division 4 of the Water Act deals with the allocation of risk from the Basin Plan sustainable diversion limit reductions. These provisions are based on the risk allocation provision of the National Water Initiative as amended by the Agreement on Murray-Darling Basin Reform of 3 July 2008.

 

85.      The Commonwealth must endeavour to manage the impact of its share of the reduction of water access entitlements. The Basin Plan in turn provides that the Commonwealth’s share of the reduction between the baseline diversion limits and the Basin Plan sustainable diversion limits is 100 per cent (see section 6.13 of the Basin Plan). Successive Governments have committed to managing the impact of this reduction by “bridging the gap” between the Basin Plan baseline diversion limits and the long-term sustainable diversion limits, which come into effect on 1 July 2019. The Government is bridging the gap by prioritising water recovery through infrastructure investment and limiting surface water entitlement purchases in the Murray-Darling Basin consistent with the 1500 gigalitre limit legislated in the Water Amendment Act 2015 .

 

86.      The risk assignment provisions are an important safeguard mechanism through which compensation can be paid if, despite the Commonwealth’s endeavours to manage the impact of the reduction, a water access entitlement holder suffers a reduction or change in reliability. This item amends the simplified outline in section 74 to clarify the effect of these provisions. The amended section provides that if there is a reduction in, or change in reliability of, a water entitlement holder’s allocations that is reasonably attributable to the Commonwealth’s share of the reduction in the sustainable diversion limit, and other conditions are met, the Commonwealth will make a payment to the entitlement holder.

 

87.      This item gives effect to the Government’s response to recommendation 7 of the Water Act Review.

 

Item 37           Subsection 92(4)

 

88.      This item repeals existing subsection 92(4) and substitutes a new subsection. New paragraph 92(4)(a) retains the existing provision for the water charge rules to specify the effect and period of effect (previously referred to as “duration”) of a determination or approval of regulated water charges. New paragraph 92(4)(b) provides new flexibility for the ACCC (or an accredited State agency) to extend the period of effect that applies to a determination or approval of regulated water charges as necessary, beyond the period of effect referred to in rule 3 of the Water Charge (Infrastructure) Rules 2010.

 

89.      T his will enable the water charge rules to be amended to:

·       reduce regulatory burden through greater alignment of regulatory processes (especially state regulatory processes relating to water resources outside the Basin, or urban water supply activities that are not within the scope of the water charge rules); and

·       set the regulatory period having regard to issues relevant to a particular infrastructure operator, to the water industry or to the wider economy.

 

90.      This item gives effect to the Government’s response to recommendation 12 of the Water Act Review.

Schedule 2—Technical amendments

 

Part 1—Technical amendments affecting definition of referring State

 

Water Act 2007

 

91.      In 2008 Queensland, New South Wales, Victoria and South Australia enacted legislation referring legislative power in relation to some matters dealt with by the Water Act to the Commonwealth Parliament, under subsection 51(xxxvii) of the Commonwealth Constitution. The Water Amendment Act then amended the Water Act to give effect to the Basin State referral. The relevant provisions of the Water Act supported by state referrals of legislative power (“referred provisions”) deal with the Murray-Darling Basin Agreement, critical human water needs, the water charge and water market rules, and transitional arrangements in relation to the former Murray-Darling Basin Commission (Parts 1A, 2A, 4, 4A, 10A and 11A of the Water Act).

 

92.      The amendments in items 1 to 4 make minor, technical amendments to the definition of “referring State” in section 18B, which aligns the definition with the definitions in the Basin States’ referral legislation. The amendments take effect from 15 December 2008, the date that referring provisions of the Water Amendment Act commenced.

 

Item 1             Subsection 18B(3)

 

93.      Section 18B(3) provides that the initial Basin State reference “covers the matters to which the referred provisions for the State in question relate to the extent of making laws with respect to those matters by including the referred provisions in this Act.” The amendment reinserts the words, “, as originally enacted by the Water Amendment Act 2008 ,” after “including the referred provisions”, which are omitted by item 4 of Part 1 of this Schedule.

 

Item 2             Subsection 18B(9) (definition of amendment )

 

94.      This amendment repeals the definition of “amendment” in subsection 18B(9). The substance of the definition is replicated in the definition of “express amendment” in subsection 18B(9) of this Schedule. This amendment aligns the definition with the definitions in the Basin State referral legislation.

 

Item 3             Subsection 18B(9) (definition of express amendment )

 

95.      This amendment adds to the definition of “express amendment” in subsection 18B(9). The  substance of the previous definition of “amendment” (repealed by item 2 of Part 1 of this Schedule) is inserted into the definition of “express amendment”.

 

Item 4             Subsection 18B(9) (paragraphs (a) and (b) of the definition of referred provisions )

 

96.      Section 18B(9) defines the “referred provisions”. Paragraph (a) defines the referred provisions for a Basin State as Part 1A, 2A, 4, 4A, 10A and 11A “as originally enacted by the Water Amendment Act 2008 , to the extent to which they deal with matters that are included in the legislative powers of the Parliament of the State". Paragraph (b) defines the referred provisions for a State that is not a Basin State to mean Part 4A and 11A “as originally enacted by the Water Amendment Act 2008 , to the extent to which they deal with matters that are included in the legislative powers of the Parliament of the State.” This amendment omits the words “as originally enacted by the Water Amendment Act 2008 ” in paragraph (a) and (b) of the definition. This amendment aligns the definition with the definitions in the Basin State referral legislation.

 

Part 2—Amendments consequential on the Acts and Instruments (Framework Reform) Act 2015

 

Water Act 2007

 

Items 5-8         Various provisions

 

97.      These items are technical amendments to implement the change in name of the Legislative Instruments Act 2003 to the Legislation Act 2003 . Amendments in items 5, 6 and 7 also update specific references to the amended Legislation Act 2003 . These items do not make substantive changes to any of the provisions listed.

 

Part 3—Spent provisions

 

Water Act 2007

 

98.      The following items repeal spent provisions that relate to the application of the Water Act before the Basin Plan came into effect.

 

Item 9             Subsection 68(1)

 

99.      This item omits the reference to “Division 1”. Division 1 of Part 11 is no longer required due to the repeal of Divisions 2 and 3 of Part 11 (see item 13).

 

Item 10           Part 11 (heading)

 

100. This item repeals the current Part 11 heading “Other transitional matters” and replaces it with “Transitional arrangements for water resource plans”. This is because Part 11 will now deal entirely with transitional water resource plan arrangements and no other matters following the repeal of Divisions 2 and 3 (see item 13).

 

Item 11           Division 1 of Part 11 (heading)

 

101. This item repeals the heading “Division 1 - Management of Basin water resources (Part 2)”. While the content provided in Division 1 will be retained (with the exception of section 240, see item 12), it will no longer be necessary to identify it as Division 1 following the repeal of Divisions 2 and 3 (see item 13).

 

Item 12           Section 240

 

102. This item repeals section 240, which allowed for water resource plan areas to be identified prior to the first Basin Plan coming into effect. Following the Basin Plan coming into effect in November 2012 this provision is now redundant.

 

Item 13           Divisions 2 and 3 of Part 11

 

103. This item repeals Divisions 2 and 3 of Part 11. These Divisions provide transitional arrangements relevant to the Commonwealth Environmental Water Holder and the Authority prior to the first Basin Plan coming into effect and are now redundant.