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Tuesday, 7 December 2004
Page: 133

Senator STEPHENS (9:36 PM) —The National Water Commission Bill 2004 establishes the National Water Commission and the Australian water fund. It was introduced into the House of Representatives on 18 November 2004. The National Water Commission, as contemplated in the significant June 2004 COAG agreement, will have two key responsibilities: firstly, assessing the implementation and promoting the objectives and outcomes of the National Water Initiative intergovernmental agreement; and, secondly, advising on financial assistance to be provided by the Commonwealth under components of the Australian water fund. Schedule C of the intergovernmental agreement outlines the institutional arrangements of the National Water Commission, the role of which is to provide advice on national water issues and, in particular, to assist with the effective implementation of the National Water Initiative agreement.

The bill gives the National Water Commission the power to make recommendations for the government's final decision concerning the allocation of the Australian water fund. This fund will predominantly be distributed through the Water Smart Australia program and the Raising National Water Standards program. Labor have concerns about this bill and are proposing some amendments, but we acknowledge the important advance that has been made through the cooperation of the state governments and the Commonwealth to produce the National Water Initiative.

Our water supplies have all but reached their limit of our abuse. Australia, like many nations, is facing a desperate future if we do not learn to manage and respect our water. We continue to endure the ravages of drought, and we are facing the significant challenge of climate change influencing the reliability of the resource into the future. As the population increases, our economy advances and the degradation of our river systems continues, our existing potable water supplies are strained, to say the very least.

In my state of New South Wales, we are facing some real challenges. The Nature Conservation Council of New South Wales recently reported that over 50 per cent of wetlands in inland New South Wales have disappeared. The amount of water reaching the sea has reduced by 80 per cent and native bird and fish numbers have declined significantly. Unchecked agricultural run-off has led to increased turbidity, a build-up of small particles of soil and other organic matter that blocks sunlight needed by aquatic plant life. By 2020, drinking water in the major regional centre of Dubbo is expected to be unsuitable for consumption due to increasing salt loads in the Macquarie River in our central west. Any amount of salt in rivers will damage aquatic life and, when used for irrigation, it threatens agricultural production. A decline in native fish species has been compounded by the explosion in the number of introduced species, such as European carp, that thrive in the altered conditions and feed off aquatic plants and the eggs of native fish.

The issues we face in New South Wales are shared right across this country. We are all living with water restrictions and we understand that we can never return to the wasteful practices that were once so common. We must find a way to balance the needs of agricultural production, rural and regional economies, urban demand and the environment. Continued degradation of land and water resources will achieve none of these goals and will add to the crippling burden of uncertainty facing many in the community.

We have a great example of the near ruin of one of our rivers and the return of environmental flows to it—the once great Snowy River. The Snowy Mountains Scheme diverted 99 per cent of the water from the Snowy River and turned it inland to generate electricity and to use on the developing irrigation areas of the Murrumbidgee and Murray valleys. The Snowy River had been reduced to a creek for four decades as a result of this diversion. Then in August 2002, water was redirected from the Mowamba River weir back into the river. At present, it is at six per cent of its original flow. While enough water is now flowing to stop the decline, much more is needed to bring the river back to life. Eventually it is hoped that fish such as blackfish and bass will return. Water is being released from the Mowamba River weir upstream and, after work on the Jindabyne Dam, 21 per cent of the flow will be restored over the next 10 years. It is expected that it will take at least this long before the river returns to working order. I read with interest in the Canberra Times recently the recollections of Mr Eccleston, who is aged 72. He remembers when the Snowy was alive and well. The article read:

Mr Eccleston remembers the Snowy mountain river, when platypuses rippled the surface with mysterious rings.

The swiftly flowing water was so clear it was a magical place for meeting friends and neighbours. Rapids tested the strongest swimmers.

Mr Eccleston despaired at the state of the river and the terrible impact it had had upon the little community of Dalgety. I am delighted to say that Dalgety now has something to celebrate with the Snowy flowing once again. The town held a festival last week to celebrate the river behaving like a river.

The case of Dalgety demonstrates how intertwined we are as people and as Australians with our environment and, in particular, our waterways. Without environmental flows, river systems begin to collapse. The impacts are felt not simply by the ecology of the rivers but in our communities. These effects are economic and social, direct and indirect. Rivers are part of our national identity and we need to do all we can to use our water more efficiently so that we are able to bring life back to our precious waterways.

I go now to the background of this bill and the developing of a national framework for water. The move towards a national approach to managing our water resources took a significant step in February 1994. The Council of Australian Governments agreed upon a strategic framework for necessary water reforms covering water pricing, institutional arrangements, sustainable water resource management and community consultation. Many years later and after much dragging of feet by the Howard government, COAG came together again to attempt the next step towards a truly national water initiative. In June this year, New South Wales, Victoria, Queensland, South Australia, the Northern Territory and the Australian Capital Territory signed the National Water Initiative agreement. The agreement builds on the 1994 COAG strategic framework to provide greater certainty for investment and the environment and to underpin the capacity of Australia's water management regimes to deal with change responsibly and fairly. The National Water Initiative aims to develop a nationally compatible market, regulatory and planning based system of managing surface and groundwater resources for rural and urban use that optimises economic, social and environmental outcomes. It is the National Water Commission that will drive the national water reform agenda.

In Australia, the responsibility for water resources rests with state governments. As such, any national response requires the collaboration of the states and a coordinated legislative approach. Since 1994, significant progress has been made by the states and territories towards more efficient and sustainable water management. However, in the past 10 years many factors have changed. There has been an increased demand for water, an increased understanding of the management needs of surface and groundwater systems, including their interconnection, and an enhanced understanding of the requirement for an effective and efficient water market. It was agreed by COAG that there was a need to refresh the 1994 reform agenda. New South Wales, Victoria, Queensland, South Australia, the Northern Territory and the ACT signed that national water agreement in June 2004. It built on that COAG strategic framework of 1994 to provide greater certainty for investment and the environment. It was a significant step in national water reform.

In September 2004 the Howard government released its long-term water policy, Securing Australia's Water Future. The centrepiece of the policy is the establishment of a $2 billion Australian water fund. Investments by the Australian water fund are to further the objectives of the Living Murray initiative and the National Water Initiative. The primary purpose of the water fund is to direct $1.6 billion over five years to water smart projects aimed at accelerating the implementation of new water technologies and practices. Two hundred million dollars is committed to recovering water for the Living Murray initiative. One hundred and sixty-seven million dollars is being committed to the cost of constructing the proposed Wimmera-Mallee pipeline in north-western Victoria. That pipeline is to replace open channel domestic and stock supply systems that are currently in operation. It will lift the capacity to measure, monitor and manage water resources. The fund will help to implement a nationally consistent system for collecting and processing water related data. There will be $200 million committed to rewarding communities that demonstrate a culture of water wise usage through the Water Wise Communities initiative.

With so much goodwill generated by the June COAG meeting, it was a shock to all state and territory governments when the Deputy Prime Minister, Mr Anderson, released the policy during the election campaign revealing that, of the total pledged for the fund, the Howard government expected the states to contribute $1.6 billion from funds allocated to them under the national Competition Principles Agreement. This is not what was agreed at the COAG meeting in June. The government did not signal its intentions then, preferring to wait until the cover of the election campaign to recant what was a monumental agreement. The state premiers wrote to the Prime Minister to announce that they would pull out of the National Water Initiative because of the federal government's plan to withdraw the competition payments to pay for the water initiative promises. The premiers accused Mr Howard of breaching agreements reached at the COAG meeting and failing to consult on the future distribution of competition payments. They argued that the decision to divert competition payments breaches the national competition policy agreements. They said:

Your decision to fund the water policy by cutting at least $1.6 billion in competition payments to the States means you are effectively robbing the States to pay for your policy. In addition to this you seek additional payments from the States to fund the key projects promised in your policy.

This will put intolerable pressure on the delivery of key services by the States. It will inevitably have an impact on hospitals and schools. This is an unnecessary assault on State and Territory Budgets given the Commonwealth Pre-Election Economic and Fiscal Outlook (PEFO) released on 10 September 2004 showed a cumulative underlying surplus of over $25 billion over the forward estimates period.

Either this government is serious about water reform or it is not. I understand the Prime Minister has written again to the states and territories since the election wanting to revisit COAG arrangements. At this stage we are at a critical impasse in terms of this National Water Initiative. It is a tragedy for our waterways that the political goodwill was squandered so willingly by the government.

The Rural and Regional Affairs and Transport References Committee inquiry into rural water usage brought down a very specific report which urged collaborative action through COAG on the issue of water. We have yet to have a formal response from the government. Perhaps this is an example of actions speaking louder than words. Certainly the state and territory governments are committed. New South Wales, Queensland, Victoria, South Australia, the ACT and the Northern Territory signed the agreement. Western Australia and Tasmania have not because the federal government has tied the national water plan to the $500 million Living Murray initiative. Both the Western Australian and Tasmanian governments believe that the National Water Initiative is too skewed to the Murray-Darling region and does not focus on other problem areas.

The Western Australian government are also rightly concerned that the agreement offers little benefit to Western Australia and is not appropriate for their state. They argue that Western Australia is at a very different stage of the development and understanding of its water resources to many other areas of Australia, which brings with it a different set of priorities, issues, challenges and opportunities. They fear that the National Water Initiative may result in Western Australia having to commit to complex management, monitoring and planning before there is a need for this level of sophisticated management, given their state of development. There are likely to be significant disadvantages for Western Australians in being tied to such a highly prescriptive model or timetable. The Western Australian government feel it is important to ensure that Western Australia retains the flexibility to implement change in a way and time frame suited to its needs.

But none of this matters to the federal government, which is driven by an ideological position on federal intervention. It is truly a disgrace that a government so willing to go on a multibillion-dollar spending spree during the election campaign—a government happy to throw money around at a variety of other ventures—will not put up new funds to address the urgent issue of water in our nation. The New South Wales and Victorian state governments in particular have responded with urgency to the water shortages confronting those states. In 1995 the Murray-Darling Basin Ministerial Council—involving federal and state ministers from New South Wales, Victoria, South Australia and Queensland—announced a cap on diversions from rivers in the basin covering much of south-eastern Australia at 1993-94 levels in an attempt to ensure that adequate water remained in the rivers.

In 1995 the New South Wales government launched its water reform process in order to bring state laws up-to-date with the growing acceptance of the importance of the river systems to the health and sustainability of the environment and the community. This process culminated in the passing of the New South Wales Water Management Act 2000. The Water Management Act brought sweeping changes to legislation that had been in place since 1912. For the first time the role of the environment as a user of water was recognised, ensuring that all decisions taken to manage our river and creek systems and our groundwater resources must consider the needs of the environment. That act was followed this year by the Water Management Amendment Act 2004. This contained changes designed to be consistent with the National Water Initiative agreed to by COAG at its June meeting. So what does the National Water Commission Bill 2004 deliver for us? We are very concerned that there is such a lack of transparency in the processes in this bill. We will propose some amendments to improve the transparency aspects of the bill. We look forward to having the support of the minor parties and the consideration of those amendments in committee.