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Thursday, 18 November 2004
Page: 2

Mr ANDERSON (Minister for Transport and Regional Services) (9:06 AM) —This is something that really deserves headlines. I move:

That this bill be now read a second time.

I must say that I immensely delighted to be presenting this bill this morning. I think it represents an enormously significant moment for the nation at a time when in Western civilisation we sometimes are a little removed from the basics of life. It is important to stop and remember that without water we can achieve absolutely nothing. As I said in this place yesterday, we of all nations on earth have an enormous interest in using our water wisely. We are the driest inhabited continent on earth, with the most unreliable rainfall. We have five per cent of the world's land mass but only one per cent of the river and water basin runoff. Despite all of that, we also are the heaviest users of water per head of population in the OECD. So it is my great pleasure to speak to this bill this morning. This bill establishes a new national institution dedicated to advancing the sustainable use of water in Australia.

The bill establishes the National Water Commission as an independent statutory body, with two key functions:

assessing the implementation and promoting the objectives and outcomes of the historic National Water Initiative intergovernmental agreement of earlier this year; and

advising on financial assistance to be provided by the Commonwealth under the Australian Water Fund.

I want to provide some further context for each of these interrelated roles for the new commission, but first let me make a few comments about the wider context of the use of water in Australia.

Water in Australia

As I have said, Australia is the driest inhabited continent on earth, with a very high per capita water usage by international standards.

Further to that, it is interesting and somewhat concerning to me that the reality is that our water resources do not match the patterns of either our production or our urban settlements. Just over a quarter of the continent accounts for around 80 per cent of Australia's total run-off—predominantly Tasmania and the northern parts of Queensland, Western Australia and the Northern Territory. By contrast, the most intensively irrigated river basin—the Murray-Darling Basin—comprises nearly 14 per cent of Australia's area but accounts for only six per cent of run-off.

Add to this picture the diverse nature of our water resources. As the preamble to the National Water Initiative puts it:

Australia's water resources are highly variable, reflecting the range of climatic conditions and terrain nationally. In addition, the level of development in Australia's water resources ranges from heavily regulated working rivers and groundwater resources, through to rivers and aquifers in almost pristine condition.

A further layer can be seen in the pattern of Australia's water use. Agriculture uses around 70 per cent of total water used in Australia. It is important to note that farmers are of course not the end users of that water. Those who wear natural fibres and consume food—and that is all of us—are the final users of the water that farmers use. That ought to be remembered.

It is also relevant to make the point that Australian farmers using that 70 per cent of consumed water produce enough food and fibre—depending on how you cut the numbers up—for somewhere between 70 million and 90 million people, many of whom of course are not in Australia. By definition, there are only 20 million Australians, so a great deal of that product is exported. That water is used to feed and clothe us and many of our fellow human beings in other countries. It is also terribly important in an economic sense. At its heart lay very many of Australia's jobs and much of our economic wellbeing.

Over and above that 70 per cent of water use, there is domestic consumption and industrial activity—important as well for people's wellbeing and jobs. We are a nation of water lovers, despite our bush heritage, and water provides important amenity value to many Australians for recreation and tourism. Water also has inherent ecological value, and I am delighted that that is so widely acknowledged in Australia today. I also acknowledge its cultural value to some Indigenous communities.

Against this background, there are several factors converging in Australia now to place enormous pressure on some of our major water resources. These factors include: drought, our fast-growing cities, dryland salinity, continued growth in irrigated agriculture, and climate change. Moreover, we have an obligation to future generations of Australians to be wise stewards of those water resources which are not yet showing signs of stress or overuse (for example, those in Northern Australia).

Taken as a whole, this picture of Australia's water resources simply underscores the need to improve our national effort in managing these resources, and that is why water reform remains so critical.

National Water Initiative

Turning to the National Water Initiative, of which I have to say I am immensely proud, let me say at the outset that the Australian government supports an effective National Water Commission because it is critical to driving continued reform of water management and water use in Australia.

Truly national water reform commenced—haltingly and, as I think it turned out to be, with some severe limitations—with the original COAG Water Reform Framework agreed by Commonwealth and state governments in 1994. Governments have extended those commitments and raised them significantly by signing the National Water Initiative in June 2004. In particular, the establishment of investment certainty for water users was identified as being a fundamental requirement for the realisation of National Water Initiative objectives.

It is worth noting that for over a decade now the cause of national water reform has enjoyed strong bipartisan support at the federal and state political levels. I note the entry into the House at the last election—and indeed into the chamber this morning—of the member for Kingsford Smith, a man whom I pay tribute to who has a real interest in these matters. I look forward to constructive debate and interaction with him on these matters in the future.

This bill reflects a coalescing of the views of almost all stakeholders—irrigators, scientists and environmental groups—around the need to refresh the original COAG agenda through the National Water Initiative.

One of the things that environmentalists, scientists, farmers, bankers and government leaders have come to recognise in recent times is that, for a resource to be properly used, you need to attach an appropriate value to it and those who use these resources will use them much more wisely if they have a value. That implies a need for investment certainty based on a clear understanding of property rights in terms of what they are, how far they extend, what they are not and their limitations. Certainty is very important in this. To give a simple illustration: a farmer who wants to move from open flood irrigation—which is very wasteful of water, inefficient economically and environmentally unsatisfactory—to a much more high value production system using expensive drip irrigation technology will be thwarted in that objective if they cannot say to their banker that the investment is secure, because they cannot be sure that some government agency will not come along and remove the water before they have recovered their sunk costs. It is a point that needs to be made and it is vitally important that it is understood.

In my private life outside of this place I am a farmer, but I regard myself as an environmentalist as well. I am passionate about finding the right balance between environmental sustainability and the use of natural resources to feed and clothe people everywhere. They are important passions that I believe many Australians share. Getting that balance right is important, but you cannot expect farmers to be able to produce efficient, high-quality produce year in, year out unless they have clearly established ground rules and investment certainty.

Returning to the matter before us, the introduction today of the National Water Commission Bill 2004 indicates the government's very strong commitment to getting on with the job. I know that the recently appointed CEO of the interim commission, Mr Ken Matthews, is already going through the process of meeting with state officials to update them on the establishment of the commission and indicate the partnership approach which he intends to bring to the commission's operation. The government stands ready to receive from state and territory governments their nominations to fill their three commissioner positions, as agreed in the National Water Initiative. There will be seven commissioners in total.

The government's intention is that the National Water Commission will be a key driver for national water reform. To achieve this, the bill assigns several key functions to the commission, including to:

evaluate governments' progress in implementing the outcomes, objectives and actions under the National Water Initiative and report to COAG on their progress;

conduct the scheduled 2005 assessment of commitments under the national competition policy water reforms, which was to have been undertaken by the National Competition Council; and

undertake an initial stocktake of Australia's water resources and water management arrangements.

Australian Water Fund

The Australian Water Fund is also an important part of this. The National Water Commission's role in advancing water reform is not restricted to the functions I have just outlined. Importantly, the bill also assigns to the commission a central role in relation to the Australian Water Fund.

The government has pledged $2 billion over five years to establish the Australian Water Fund. This is in addition to the $200 million previously provided to recover water for the Living Murray Initiative—which is, of course, part of the $500 million package put together jointly with the relevant states—and significant resourcing for the Natural Heritage Trust and the National Action Plan on Salinity and Water Quality. The significance of this decision is that there are now major additional national resources available to help advance the objectives and outcomes of the National Water Initiative.

In developing the fund, the government has recognised that progress needs to be made at several different levels; hence there are three quite distinct funding programs all aimed at achieving practical on-the-ground outcomes.

Firstly, $1.6 billion will be invested over five years in the Water Smart Australia Program to accelerate the uptake of smart technologies and practices in water use across Australia.

The government has identified a number of projects that would be funded subject to a number of conditions such as contributions from state governments and the private sector and provision of appropriate due diligence—in other words, evidence that projects are appropriate and viable. These projects include:

securing the long-term future of South Australia's water supply;

assisting New South Wales and Victoria with structural adjustment for over-allocated ground water systems. We have a situation where farmers have done nothing wrong—they have used licence entitlements given to them by governments, in some cases for over many decades—and they are now expected to bear much of the cost of restoring balance to those systems. The community has benefited from the use of that water in terms of jobs, economic performance, food, fibre and all those things. There needs to be fairness in a reasonable apportionment of the bearing of the costs of restoring those systems to sustainability. That is the Australian way. But it is more than that. I think it is an incredibly important principle of justice and fairness;

developing a viable Wimmera-Mallee pipeline project to replace the world's largest open channel water supply system with a network of pipelines. That system, which covers a huge area of Victoria, loses each year through evaporation and seepage the equivalent of 100,000 Olympic swimming pools, not to mention the other environmental downsides of open channels. The Speaker is well aware of this. He has a passionate interest in it, as does the member for Mallee. They have both been very strong advocates of the need to do something about this; and

investing in water savings and efficiency measures in the Macalister Irrigation District to recover water for stressed rivers.

There are many other projects before us. I want to pay tribute to the Pratt Water Group. They have done a lot of work, with help from the state government and from us, in looking at efficiency savings in the Murrumbidgee River. There is a preliminary report out and a major report due in the next little while. We will look very closely at how we can progress that. Early indications are that very significant water savings can be made by the deployment of better technologies—water that can be used for a split between increased environmental flows and more efficient and reliable production.

Investment under the Australian Water Fund will be made on the basis that it is consistent with, and helps to achieve, the principles, outcomes and actions of the National Water Initiative and the Living Murray Initiative. State and territory governments which have signed up to, and are implementing, the NWI, as well as local authorities and private proponents, will be eligible to make bids.

The second program to be funded from the Australian Water Fund will see investment of $200 million in the Raising National Water Standards Program. The program will lift Australia's national capacity to measure, monitor and manage water resources over the long term. Investment under this program will assist in achieving the outcomes of the NWI and will support projects such as a nationally consistent water accounting system. That is terribly important. We do not have a national system at the moment. We know surprisingly little about what water exists, where it is, who owns it and where it might be being transferred to. We also need to work with communities to conserve rivers with high environmental values.

Let me emphasise very strongly the following point about this. Some remarks by the globally known environmentalist David Suzuki were passed on to me recently, and I think they bear repeating in this place. This is something I feel very strongly about. He made the observation that, time and time again around the world, where they have been environmental issues, we have learnt qualitatively and quantitatively—I am paraphrasing, but that is effectively what he said—that the shortest, quickest and most effective way to solve an environmental problem is to consult with the people who live in the area, face the problem and are committed to that area. That is to say: exclude the people who are at the coalface of these issues at your peril; you will not get the solutions. Include them, work with them, develop information with them, consult them and ensure that they are treated fairly if changes have to be made and you will achieve the objectives that we are all after much more rapidly, much more efficiently and, I think, much more fairly.

I note that we have some water users in the gallery, and they would know exactly what I mean by that. Proper consultation is very important. Farmers are often in the firing line, but I have not met a responsible farmer yet who, if confronted with new information that goes to the heart of the sustainability of their operation, will not say: `This matters. I am a custodian of my land, my water and whatever I am using for future generations, and I will respond.' But, if you bludgeon them from outside, if you purport to know all about their circumstances and set yourself up as an expert from arm's length, from a capital city somewhere, and tell them what to do without first establishing agreement on the facts and on the parameters of the problem, they will fight you every inch of the way. That is normal human nature; of course they will. So working with people becomes very important indeed.

I commit the government to consult properly, to work with people rather than against them and not to shirk the tough decisions when they have to be made. I sincerely hope that the state governments will join me in that attitude. I place on record again the fact that I think I have been able to work well with the state ministers, particularly those in New South Wales and Victoria who have faced particular difficulties in this area. Their cooperation to this point in time has helped us to achieve more than we would ever have achieved without that cooperation.

The commission will make recommendations on projects put forward under these programs of the fund for the government's final decision. The commission will also administer these programs of the fund.

The third program is the Water Wise Communities program, which will invest $200 million over five years to promote a culture of wise water use in Australia. Everywhere I go in this country, urban Australians, country Australians and remote- and coastal-living Australians say to me: `We need to use our water wisely.' People are passionate about it—they are interested in it—and I think that is tremendous. Let us capitalise on it. Let us take it forward. That is what the Water Wise Communities program is about. Community organisations will be provided with grants of up to $50,000 allocated on a competitive basis to deliver on-the-ground results that increase water use efficiency, improve river or ground water health or improve community education on water saving.

The Department of the Environment and Heritage, under the stewardship of my good friend and colleague Senator Ian Campbell from Western Australia, will pick this up with great enthusiasm and great competence. Senator Campbell will work in conjunction with the Department of Agriculture, Fisheries and Forestry, under Warren Truss.

The Australian government's intention is that, by combining the reform evaluation role and the program delivery role, the National Water Commission will play a key and constructive part in improving water use and management in Australia.

National Water Commission

Lastly let me say something about the way in which the government expects the commission itself to operate.

As mentioned earlier, the bill allows for commissioners to be nominated by the Commonwealth and by the states and territories. The bill also requires the commissioners to act in the best interests of the commission—it certainly does not envisage a disparate set of commissioners each representing and advocating different sectoral or government interests. The cause of water reform needs to rise above that, and so does the commission. In the same way that our rivers do not respect state boundaries or even regional boundaries, the commission must ensure that it does not pay undue heed to sectoral, state based or regional differences. It must act in the interest of coherent national approaches to water management on this continent.

The bill also provides that the commission meets at least eight times per year, and with a full and ambitious work program.

By placing this body in the Prime Minister's portfolio, the commission will be able to bring to water issues the profile and significance which that entails. The Prime Minister has identified water as one of his top personal priorities for this term of government. I think members will know that it has been absolutely a top personal priority for me.

The National Water Commission will be instrumental in ensuring that water issues in Australia continue to capture the public's imagination and energy in working towards practical water solutions. The importance of water to securing Australia's economic and environmental future demands no less.

I present the explanatory memorandum to this bill and regard it as a very proud moment.

Debate (on motion by Mr Bevis) adjourned.