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Tuesday, 14 October 2008
Page: 9028


Mr CRAIG THOMSON (7:37 PM) —I rise to support the Water Amendment Bill 2008. The bill is to amend the Water Act 2007 and give effect to the intergovernmental Agreement on Murray-Darling Basin Reform, signed by the Prime Minister and the first ministers of each of the basin states—New South Wales, Victoria, South Australia, Queensland—and of the Australian Capital Territory on 3 July 2008 at a meeting of the Council of Australian Governments. In particular, this bill enables the Murray-Darling Basin Authority and the Murray-Darling Basin Commission to be brought together as a single entity known as the Murray-Darling Basin Authority. This will ensure that the Basin Plan process can address the provision of water for critical human needs. The bill also strengthens the role of the ACCC.

Costings for the measures under the Water for the Future program were agreed by the Commonwealth government in April 2008, to an overall amount of $12.9 billion over 10 years. The Murray-Darling Basin Authority will retain the fees and charges, if any, that it collects for cost recovery purposes. Further, the bill sets out additional responsibilities of the Commonwealth in relation to the reductions in water availability. These costs, when they are determined, will be mitigated by the Water for the Future program. Total funding for Water for the Future for the four years from 2008-09 to 2011-12 is $6.5 billion.

The Water Amendment Bill 2008 implements the intergovernmental Agreement on Murray-Darling Basin Reform, which was signed by the Prime Minister and the first ministers on 3 July 2008, as I have already said. The bill relies on the Commonwealth’s constitutional powers and a referral of powers to the Commonwealth by New South Wales, Victoria, Queensland and South Australia to enact certain measures. Let us have a look at some of these measures in a little bit more detail. Firstly, there is the transfer of the current powers and functions of the Murray-Darling Basin Commission, as set out in the former Murray-Darling Basin Agreement, to the new Murray-Darling Basin Authority. There is the strengthening of the role of the Australian Competition and Consumer Commission by extending the application of the water market rules and the water charges rules. Finally, there is the enabling of the Basin Plan to provide for critical human water needs.

The intergovernmental agreement and the bill were prepared by a working group of Commonwealth and basin state officials. Stakeholders were extensively consulted on the development of the agreement, including during two briefing sessions held in each of the basin states. Further consultation with key national stakeholders was held prior to the finalisation of the agreement. Stakeholders were not specifically consulted on the development of the bill, as the bill simply implements the policies and reforms agreed through the agreement.

The bill addresses the long-term management of the basin’s water resources and the approaches and mechanisms required to ensure that it is sustainably managed in the future. It will take time for the Murray-Darling Basin Authority to develop and consult on the Basin Plan and for governments, irrigators and communities to adapt to the limits established in the plan. The Basin Plan will be the first of its kind, covering the basin as a whole and addressing its water resources in a single integrated fashion. The plan will commence in early 2011. The Basin Plan will be based on the best available science, taking into account anticipated climate change impacts on water availability and the watering requirements of the basin’s environmental assets. The plan will also need to consider socioeconomic impacts.

This bill goes to the heart of what is one of the most important basic needs that we have as a civilisation—that is, water. Water is a critical need and must be managed effectively, efficiently and sustainably. On the New South Wales Central Coast, where my electorate of Dobell is, we came quite close to experiencing a major water crisis, the worst in modern history in our region. At one stage our dams were nearly down to 10 per cent in their water supply. Thankfully, due to above-average rainfall recently and the community becoming far more water wise and water conservative, the situation has greatly improved. While it has improved, though, the levels are still only a little over 31 per cent, and the health of the Central Coast and its water supply is still in a great deal of danger. There are over 300,000 people who rely on the water supply on the Central Coast, and when your levels get close to 10 per cent you are very close to running out of water. Thousands of householders have taken offers from local councils, the state government and the federal government for rebates which allow them to fit a rainwater tank at little cost, or in some cases even no cost at all. Just because the drought on the Central Coast has eased somewhat, that does not mean we have forgotten how bad the conditions became not all that long ago, nor can we be complacent when our water supply is only 31 per cent. This is obviously a serious and critical situation.

The Rudd government, in the lead-up to the 2007 election, committed $80 million towards a major pipeline to drought-proof the Central Coast region for the future. This money will be used to cover the cost of what is known as the ‘missing link’ pipeline, joining the Central Coast’s major storage dam, Mangrove Creek Dam, which is not in a catchment area, to a smaller dam, the Mardi Dam near Wyong, which is in the catchment area and which, being smaller and in the catchment area, fills to overflowing. During times of rainfall and when the creeks and rivers are flowing, the pipeline will pump the extra water from the smaller dam to the larger structure, which will be used more for what it was originally intended for—longer term storage of water.

Water resources and how we must manage these resources sustainably and effectively are always very much in the minds of the good people of the Central Coast. They have learnt to be naturally conservative, and even when restrictions have been eased consumers still refrain from watering their gardens or washing the family car despite it now being legal to do so. So when it comes to the subject of sustainable management of water resources in the important region of the Murray-Darling Basin, the people of the Central Coast have no trouble relating to the issues and challenges facing their fellow Australians in that region. They have no trouble in having sympathy and understanding the extent of the problems, because we had a small taste of that on the Central Coast. Luckily for us on the Central Coast, with the Rudd government’s commitments the Central Coast water supply is close to being drought-proofed.

These challenges in terms of how we deal with sustainable water management are problems that are being faced by the Rudd government broadly. Our plan, Water for the Future, is the first ever nationwide plan that addresses both rural and urban water. It is a 10-year, $12.9 billion plan to secure the water supply for all Australians.

The plan is to address four key priority areas: taking action on climate change, using water wisely, securing water supplies and supporting healthy rivers. The plan includes $3.1 billion to purchase water in the Murray-Darling Basin to improve river health; $5.8 billion for irrigation infrastructure projects and to help basin communities make an early adjustment to a new cap; and a $1.5 billion investment in improving water security for our cities and towns, made up of a $1 billion Urban Water and Desalination Plan, a $250 million National Water Security Plan for Towns and Cities and a $250 million National Rainwater and Greywater Initiative.

While we have a definite plan to secure the nation’s water supply and management, we find that the opposition are again hopelessly divided on water. They demonstrate a complete lack of understanding and a complete lack of responsibility when it comes to making the hard choices needed to deal with the challenges in the Murray-Darling Basin. They failed in relation the Central Coast. My predecessor—and perhaps this is one of the reasons why he is no longer in this place—chose to try and be political with the water supply of the Central Coast, famously one day saying that he would sink the missing link. This missing link was something that the Labor Party committed to, to make sure that our area was drought-proofed. The situation in the Murray-Darling Basin means that there are no easy options, only hard decisions. The opposition need to stop playing the same political games that got the River Murray and the Lower Lakes into the mess that they are in at the moment.

Those on that side of the House spent 12 years in government doing nothing, and they are so cynical as to walk both banks of the stream when it comes to the River Murray. When they did discover the River Murray it was in the shadow of an election. Suddenly they realised that people actually care about the environment and care about what is happening to the river systems in Australia. In a desperate attempt at the last minute—at one minute to midnight—well after the damage had been done and after that tired old government had been here for 11½ years, they tried to cobble together an agreement.

When downstream in South Australia, the opposition give one message; when they are upstream, they give another. Upstream, in Victoria, they tell their constituents that the Lower Lakes cannot be saved and that the government should stop purchasing water entitlements. Then, in South Australia, they say that the government should purchase more water and that the Lower Lakes can be saved. They cannot continue to walk both sides of the stream. They reason they do that is that they do not believe that climate change is an issue. On climate change they are hopelessly divided, and that has been the problem and why in their 11½ years in government they were unable to deal with these important issues along with other issues relating to the environment.

The task of the new Murray-Darling Basin Authority will be a very ambitious one, given the time frame for the plan to be completed and the level of consultation required before the plan can be submitted for approval by the Commonwealth minister. As specified under the current Water Act 2007, existing state water resource plans will be respected until their expiry, providing certainty and time for irrigators and communities to adapt to the new arrangements. Once these have expired, the Basin Plan will be binding on the state water resource plans that follow.

Let me remind the House that this government does not support compulsory acquisition of water entitlements. We are committed to the purchase of water entitlements from willing sellers, through the market, at market prices. This is the most fair and equitable way of obtaining more water for the environment. Any move away from this market based approach towards compulsory acquisition of entitlements would be wrong. Such a move would also completely undermine the existing, hard-won level of cooperation in the implementation of water reforms and environmental water recovery processes that currently exist across governments, irrigators and local communities. It was this co-operation that led to the intergovernmental Agreement on Murray-Darling Basin Reform.

Purchasing water entitlements from willing sellers allows irrigators to make their own business decisions. Irrigators can choose to sell part or all of their entitlements, allowing them to either leave the industry or reinvest the proceeds into their businesses. It is their choice as to the quantity of water entitlements needed to sustain their business. There is a further strong argument against compulsory acquisition: such a move would not provide any immediate significant additional water for the environment, given that there is so little water currently held in the Murray-Darling Basin storages. State shares of the water in the River Murray system are protected under the revised Murray-Darling Basin Agreement. Under that revised agreement, state shares can only be amended with the unanimous agreement of the ministerial council.

This bill defines critical human water needs as the need for a minimum amount of water, which can only reasonably be provided from basin water resources, required to meet: core human consumption requirements in urban and rural areas and those non-human consumption requirements that a failure to meet would cause prohibitively high social, economic or national security costs.

In order to provide greater transparency and certainty for communities reliant on water from the River Murray system in times of drought, the bill establishes a three-tiered system for sharing water. Tier 1 refers to periods of normal water availability, where the normal state water-sharing arrangements apply. Tier 2 refers to periods of low water availability. In this situation, the Basin Plan will provide arrangements to ensure that there is sufficient water available to meet critical human needs. Tier 3 refers to periods of extreme and unprecedented circumstances in which there is an extreme risk of failure in the ability to supply water for critical human needs. In this situation, the ministerial council will determine the sharing of the available water and contingency measures. Under these new arrangements, the Basin Plan will be required to establish trigger points at which water-sharing arrangements will move from one tier to another. States will continue to be responsible for determining the allocation of water for critical human needs within their state.

The bill also affects the operation of the ACCC. The Water Act 2007 establishes a role for the ACCC within the basin, advising on the development and enforcement of the water market and water charge rules. The Water Amendment Bill provides for a more uniform approach to regulation by extending the ACCC’s regulatory role by enabling the water market rules and the water charge rules to apply to all water service providers that charge regulated water charges and their transactions, not just those entities and transactions within the scope of the Commonwealth’s constitutional powers. The bill also enables the ACCC to determine or approve all regulated water charges in the basin, other than charges relating to urban water. It also enables the expansion of the ACCC’s regulatory role across the Murray-Darling Basin states as well as outside of the Murray-Darling Basin if an individual jurisdiction opts to be included.

Through the intergovernmental agreement, the Commonwealth agreed to take on and bring forward to an earlier date some basin state responsibilities for reductions in available water. This was agreed under the National Water Initiative. As part of the 2004 National Water Initiative governments agreed to a framework for sharing risks relating to reductions in water allocations. Under this framework governments are responsible for reductions attributable to changes in the government’s policy and, from 1 January 2015, responsible for reductions resulting from improvements in knowledge which is to be shared, with entitlement holders responsible for the first three per cent of the reduction and the Commonwealth and state governments jointly responsible for reductions exceeding three per cent of the relevant diversion limit. In the intergovernmental agreement the Commonwealth agreed to take responsibility for a basin state’s portion of responsibility for reductions in the long-term average sustainable diversion limit resulting from improvements in knowledge where the basin state enacts legislation adopting the National Water Initiative risk-sharing framework as modified by the agreement. The Commonwealth also agreed that it would commence this responsibility from the date on which the relevant transitional or interim water resource plan ceases to have effect. These changes are implemented in the Water Amendment Bill.

These changes will not affect the responsibilities of entitlement holders set out under the National Water Initiative relating to seasonal or long-term changes in climate or periodic natural events such as bushfires and drought, or the first three per cent of a reduction resulting from new knowledge. However, they will bring forward the rights of the entitlement holders in respect of new knowledge where the entitlement holder is in an area subject to an interim or transitional plan that ends before the beginning of 2015. Basin states will continue to be responsible for reductions attributable to changes in a state’s own government policies. The practice for referral legislation is that each of the four basin state parliaments must have passed referral legislation and this legislation must have received royal assent and have commenced before the Commonwealth passes the Water Amendment Bill.

The Water Amendment Bill 2008 is a balance of the competing interests of each of the parties to the agreement, and any amendment of the bill may lead to the agreement failing. The government considers that the intergovernmental agreement and the bill will give the government the capacity to meet its major objectives while leaving the day-to-day management of irrigation entitlements with the states. Amending the bill would have the effect of either potentially impacting on the validity of the referral or potentially jeopardising the referral altogether as the basin states may withdraw their reference.

On 23 September this year, the South Australian government introduced referral legislation into the House of Assembly. The second reading debate is scheduled for 14 October, with consideration by the Legislative Council on 28 October. On 23 September the New South Wales government introduced referral legislation into the Legislative Assembly. On 24 September the legislation was passed by the Legislative Assembly and the Legislative Council. The New South Wales legislation received royal assent on 25 September 2008. The Queensland and Victorian parliaments introduced referring legislation on 7 October. We understand that consideration of these bills will take place over the next few weeks. The Queensland parliament is scheduled to consider the bill in the sitting week commencing 10 November and it is expected that the Victorian Legislative Council will also consider the bill in the next few weeks.

This is an important piece of legislation. It is legislation that demonstrates this government’s commitment to the Murray-Darling Basin, but it goes broader than that. This is legislation that shows the commitment of this government to making sure that we continue to work to make our river systems healthy. It is a commitment by the government to show that environmental issues are front and centre of what the government do, that they are given proper priority and that we are taking practical steps to make sure that these issues are addressed. This is important legislation that should be passed unamended and I commend it to the House.