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Wednesday, 15 October 2008
Page: 9158

Mr BILLSON (11:52 AM) —I commend many of the contributions so far in the debate on this important bill, the Water Amendment Bill 2008. The previous speaker, the member for Boothby, has outlined what is probably my greatest regret about the discussion today, and that is that we have missed almost two years of opportunity to get on with the job while there have been discussions and posturing around the innovative and quite visionary strategy that the previous Howard government had outlined. The Leader of the Opposition, Malcolm Turnbull, was front and centre in that work, and I think very courageously and boldly moved forward with a legislative agenda, a support package and reform initiatives. Maybe if we had had the support of the then opposition, the Labor Party, and, more importantly, of the Labor leaders in the states and territories involved we would be talking about the gains that had been secured to date and what more could be done, not talking about getting started. I think that is the greatest tragedy about this discussion.

Notwithstanding that fact, the opposition has indicated its support for the bill and the reforms. My friend and colleague the member for Flinders, the shadow minister for the environment and water, has outlined some important amendments that emphasise the consequences of action and inaction and particularly highlight the plight of the Lower Lakes and the Coorong area and what is needed to address the dire situation faced by those communities—and, I guess, by our entire nation—with a Ramsar listed wetland on life support and a need for an infusion of scarce water. Many argue that that water is available within the system, but we have not had the wherewithal and the cooperation to bring it in a timely way to that very important part of the Murray-Darling Basin system. We also need to recognise that the flora and fauna that gave rise to that Ramsar listing are under threat in the region, as well as the many businesses that rely upon a healthy ecology in the Lower Lakes and Coorong area in order to pursue their ambitions for a quality of life. So they are very timely amendments and I would urge the government to take account of them.

More importantly, my contribution today is to try to encourage some transformational thinking. Just doing more of the same is not going to cut it; it is not going to bring about the results that we are looking for. Many of the elements of the coalition’s strategy that was stymied by Labor politics nearly two years ago touched some of these things: the need for structural reform and institutional arrangements that actually support our goal; the need for some funding to bring about change and the required transformation in the way we do things; the enormous opportunities for improvements in efficiency; and the nobbling of the market for water that sees it go to its highest and best use and gives people some confidence that they can plan with certainty. It also addressed the bizarre position in Victoria of building a north-south pipeline to take water from one microclimate that is most likely to have the same drought environment and conditions as greater Melbourne and then shift it down to Melbourne, which raises questions about the implications for the longer term. The strategy also recognised the fact that water reform itself needs to be completely systemic. It needs to look not only at the investments we make in infrastructure but at the efficiency and performance of that infrastructure to make sure that those investments are actually building a better way forward, not simply extending what is happening at the moment. Support for voluntary trading and purchasing of water is important, but there needs to be an informed marketplace so people can invest, as they would in other key inputs for their production, with confidence in what they are purchasing and so its reliability and bankability are transparent and understood by all.

That constructive plan was outlined by the coalition when it was in government. Sadly, I have to say—as a Victorian who was an adviser to the former Kennett government’s natural resources minister, the wonderful human Geoff Coleman, who understood the importance of water and water reform for long-run prosperity in those markets and in the rural sector reliant upon water—that Victoria was a leader in much of that work. It recognised the trade-offs between resource security and price; that overallocation undermined everybody’s future prospects; that work was required by governments to make sure that that overallocation, born out of perception of perpetual abundance, was actually weakening the security of the allocations that were out there; and that water trading was an important reform to embrace the fact that the environment is a key entitlement holder to water. I remember vividly the government purchasing water in the marketplace to make sure the Barmah Forest got a drink because its needs had to be addressed, and the government led in that work. It also led in recognising the partnerships that are essential, such as for innovations like the Wimmera-Mallee pipeline—

Mr Forrest —Hear, hear!

Mr BILLSON —that my friend and colleague at the table well recognises—where a partnership between government and water users to improve the distribution and delivery systems was a good outcome for everybody. In some cases in the sandy channels up near the Sunraysia they were getting about four or five per cent efficiency from the water released from channels to the point of delivery where it was being used. The rest of it was just soaking into the sand or evaporating, and that was in nobody’s interest. The piping of much of that system and therefore the recovery of that water meant improved security for those relying upon it for productive purposes, better quality for those using it for stock and domestic applications and also the recovery of some water for other uses, including the environment. This was Victoria’s contribution to water reform—and, boy, we’ve gone backwards, haven’t we? We have seen, for no other reason than political posturing, the Victorian Labor government impede work on water reform that could have been nearly two years advanced. Here we are today talking about actions that could have started 21 months ago and been delivering benefits today.

The issue we need to face when investing in water reform is that we actually carry out the reform. We need to ensure that that investment, whether it be private or public, is delivering the outcomes we hoped for. We have seen a profound change, a change which I think few would contest, in the availability of water due to reduced rainfall patterns. We have seen example after example. The statistics are compelling. There are always arguments about why it is occurring and there is information about much of south-east Australia experiencing a stepped decrease in rainfall and reservoir inflows.

My own community around Melbourne had not a bad August, as I recall, but the rainfall did not translate into inflows. For the water engineers around us, the rainfall coefficient between what falls and what is recovered was nothing like it used to be because the environment was so parched it soaked up a lot of the encouraging rainfall and the inflows to the catchment were nothing like what we might have expected some years ago. There has been a step down in rainfall and reservoir inflows. In Melbourne alone, one-third of its average reservoir inflows have disappeared in the last decade. That presents us all with a challenge. We need to understand that water is not solely a rural issue; it is a very real issue for our metropolitan communities. In my new role as shadow minister for sustainable development and cities, that is something I will be focusing a lot of energy on.

I raise that because it highlights the need for a comprehensive approach to water reform. It means that doing more of the same is not the answer. It picks up some of the work being discussed at important high-level forums like the Australian Davos Connection and the like where really facing up to the full costs and pricing for water, including infrastructure, is something we must do—recognising that at the moment there are institutional impediments for people doing the right thing, where water institutions are encouraged to make more water available because that is directly linked to their revenue. Where do we put the price incentive and the revenue incentive to water authorities to achieve efficiency outcomes so that that becomes a rewarded goal for all of them, including the institutions involved in managing our scarce water resources? It also means making sure that the water market is well informed and that there are not any needless barriers to the operation of that market, but that the water entitlements out there are fundable, that they are real and verifiable. We see enormous fluctuations in the price of water in some irrigation districts at a time of scarcity when it is $1,000 a meg, compared to $60 a meg when we had 100 per cent allocation of water entitlements. That is an example from the Goulburn-Murray irrigation district.

What do we do about activating sleeper water entitlements, a claim to water which has rested, been dormant, held as an asset but not activated and then, when activated, adds greater burden, greater demands? We can look at smaller scale projects. I have long been reminded that enough rainfall lands on Adelaide to meet Adelaide’s entire metropolitan water requirements, that innovation and incentives around stormwater recovery are what is needed. The excellent work of Salisbury City Council is a good example of what is achievable. In my own community on the Mornington Peninsula, Frankston City was recently awarded the Keep Australia Beautiful Council’s Sustainable Cities Award. It was a great pleasure to be there just a week ago to make that presentation. The biggest threat to Port Phillip Bay is when it rains and all the hydrocarbons and E. coli wash off our suburban streets into Port Phillip. There is a pollution risk, but that water itself represents one of the most cost-effective ways of supplementing water availability.

With sewer mining, in Melbourne we have two mega sewage treatment facilities, one in Werribee and one just to the north of my electorate in Carrum in the Eastern Treatment Plant. As people talk about the impact of urban consolidation around cities, they say, ‘But the infrastructure can’t cope.’ It might not cope if we keep doing more of the same—that is, collect waste water and then pipe it tens of kilometres to a treatment facility. If people were able to intervene and recover water at that point and then make it available for non-potable use, that would be a good solution. It would expand and improve the efficiency of the existing infrastructure. All of these things are examples of what we can do. All of them go to the question of looking at reforms and impediments to optimising the efficient use of our water and scarce resources, and other price-sensitive resources such as energy and the like. This is the challenge ahead of all of us.

I was encouraged to hear Wilson Tuckey talk about instrumentation and the need for smart systems and the crucial role they can play, not only in properly recording the timing and volume of flows but also the price associated with them. We need to start thinking about just-in-time water delivery. It happens in every other sector, but we see an enormous loss of water as it is stored for some purpose down the track when really we could be thinking more creatively about making sure we have the volume of water required at the time it is needed and then have pricing reflect that. I have heard many people speak about the government’s intervention in the marketplace and the right of all water entitlement holders to know what is being bought and at what price, so that the market is informed about those interventions.

I have touched on incentives for other behaviours. Even with the initiatives we have spoken about in recent days I am frankly flabbergasted that the Rudd government, which flicks to environment and sustainability talk when that is the purpose of its message, could have overlooked opportunities with the economic security rescue package, particularly with the added first home buyer incentives, and not seek to pursue more sustainable features for housing, particularly for new homes. We know there is very cost-effective, commercially available technology. Why are we not saying that those sustainability features are important and should be rewarded in the added financial assistance? I do not know why that has not featured. It seems very short-sighted.

This is the case even with the National Rental Affordability Scheme, which was touched on earlier in the speech of my colleague and friend the shadow minister for housing, Scott Morrison. He talked about changes that could be made there. Again, why is the sustainability of rental accommodation not a key feature? I do not understand that. It is a missed opportunity. If housing affordability is our goal, the cost of running that housing should be as important, certainly to a tenant, as the cost of actually establishing it, yet you do not hear anything about that.

So my contribution to the debate on this bill is to encourage the government to recognise the systemic reform that needs to be pursued, with demand management efficiency, targeted infrastructure—not just more of the same—and smart systems, pricing signals and encouragement, reward and incentive for those doing all that we could ask of them. A whole-of-system approach needs to be part of this work, and a number of speakers today have already touched on opportunities that seem to have been overlooked. I can assure the House that I will make sure they are not overlooked in my new role as shadow minister for sustainable development and cities. I will seek to make sure that every step we take is a step towards a more sustainable economy, a more sustainable way of living and, hopefully, a nation and a people that treads a little bit more lightly on our earth as we go about our legitimate goal of improving our living standards, hoping and working for our families and making sure that we grow the economy and improve the environment simultaneously, which is what I really think the Australian public is expecting of all of us.