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Rural and Regional Affairs and Transport References Committee
10/09/2012
Management of the Murray-Darling Basin system

LA NAUZE, Mr Jonathan, Healthy Rivers Campaigner, Australian Conservation Foundation

TALUKDAR, Miss Ruchira, Healthy Rivers Campaigner, Australian Conservation Foundation

[17:04]

Evidence was taken by teleconference—

CHAIR: I welcome you to the hearing. Do you want to make an opening statement? Then we will proceed to questions.

Mr La Nauze : I will make a short statement if that is okay. I would like to begin by acknowledging the traditional owners on whose land we meet—both where you sit today, Senators, and where we sit here in Melbourne. I also would like to thank you for this additional opportunity to inform your inquiry. The day is near when Tony Burke will ask you to support a Basin Plan, and there are a number of issues I urge you to consider before deciding whether to allow his plan to pass. More than that, I urge you to take up these matters with the minister before that day, for, as we all know, once he tables that plan there will be no opportunity to amend it within your house or the other house.

I trust that you have received the document I emailed in advance. I will come to that in a moment, but first I would like to propose two tests for the Basin Plan: does it deliver a healthy river, and does it represent a good and proper use of taxpayers' money? You would have to say the latest version falls short on both counts. But, not wanting to throw out the baby with the bathwater, I suggest it could be amended relatively simply to provide a good outcome.

Firstly, the proposed SDL adjustment mechanism needs reworking. The parliament should be aware that, as it is currently drafted, this mechanism will result in the Commonwealth spending hundreds of millions if not billions of dollars returning water to irrigators instead of to the environment. It turns the water reform process on its head. New investments in certain categories of water-saving measures—the authority calls them 'supply measures'—will be used to increase the amount of water available for consumptive use rather than for the environment. This includes the reconfiguration of water storages such as the Menindee Lakes and investment in environmental works and measures. So even where the environmental outcome is manifestly inadequate, as it would be under the current 2,750-gigalitre plan, public money would be spent increasing water for irrigation instead of making more water available for the environment. The mechanism can also be used the other way around, to recover extra water for the environment, but only through what the authority calls 'efficiency measures'—that is, expensive upgrades to irrigation infrastructure, whether on farm or off farm. It effectively rules out extra buybacks, putting the brakes on water reform and constraining the hand of future governments.

The adjustment mechanism is not all bad. Fundamentally it is meant to encourage innovation. There are probably ways we can manage the river better and achieve more with less, but the adjustment mechanism should harness that innovation in order to achieve a healthy river and optimise value for money. To do this, it needs to work on three simple principles: (1) adjustments should result in 100 per cent of the MDBA's hydrologic targets being achieved unless, despite all efforts, it turns out a target is impossible to achieve due to constraints; (2) all publicly funded water recovery should go the environment; and (3) water should be recovered through the most cost-effective and socially beneficial methods, including buybacks.

I now want to turn to the tables I emailed you.

CHAIR: Before you do that, would you be kind enough to agree to table the document you have given us today.

Mr La Nauze : Yes, sorry. I was hoping that would be taken as given.

CHAIR: Thank you very much. Consider it so done.

Mr La Nauze : The tables I emailed you summarise the environmental outcomes of the 2,750-gigalitre scenario. You may remember that I presented a similar document in April. Today's version incorporates data on the impact of system constraints. As with the earlier version, I just want to emphasise that it is not my own analysis; it is simply a summary of the Murray-Darling Basin Authority's hydrologic modelling.

I think the most interesting thing this table shows is that we have been told a giant fib about constraints—specifically, the notion that you cannot deliver a drop more than 2,750 gigalitres of environmental water down the river without flooding a town or a bridge somewhere. You may have heard that argument already this afternoon. I would not be surprised if you hear it repeated later this evening. Table 1 summarises how many targets are achieved overall. But, to be fair, it breaks those down into which targets the authority considers achievable under current operating constraints. If you look at the top row, in blue, you will see that of the 112 targets 91 are considered achievable yet only 57 were achieved. That is 37 per cent of achievable targets unmet—not because a town or a bridge got in the way, but because 2,750 gigalitres is not enough water to keep the river healthy.

The impact of constraints is tiny compared to the impact of the authority refusing to recover enough water for the river. Have a look at the bottom row of that table. A handful of targets—eight per cent in total—are described by the authority as difficult to achieve under current operating constraints. Now, in case you are wondering, the authority did not come up with these constraints itself. The information came directly from the hydrologic models provided by state governments. They reflect the way state governments currently manage the basin.

The second table, which you may be more familiar with, shows how constraints play out in terms of specific ecological targets. For example, in Gunbower Forest—it is the second row on page 4—flow target No. 4 is associated with keeping red gum and black box healthy. It requires at least 60 days of winter flows above 40,000 megalitres a day, but it only needs to occur at least once every four years. Current constraints—and I can describe them in more detail later, if you are interested—mean this can only be delivered if dam releases are piggybacked on top of high tributary inflows. So it is considered achievable under certain limited circumstances but not all the time.

On the other hand, target 5 is associated with waterbird breeding. It only requires flows of 20,000 megs a day and is not impacted by constraints at all. But it needs those flows to carry on for a longer period. This target is not achieved, because under the 2,750 scenario the Commonwealth Environmental Water Holder will not have enough water—will not own enough entitlements, essentially—to keep the water up to the wetlands for a long enough period. Gunbower is listed on the Ramsar    convention for its globally significant wetlands and the thousands of colonial nesting waterbirds that they support. If the Environmental Water Holder does not have enough water to keep those wetlands full for long enough, it is well documented that those waterbirds will abandon their young to an unpleasant death. That is the kind of outcome you get for 2,750.

The way the adjustment mechanism works at the moment, if we subsequently figure out that with some fancy engineering you can achieve the same outcome with less water, the Commonwealth will spend vast sums of money on concrete and steel and the result will be more water for irrigators whilst waterbirds are abandoning their nests. The proposed basin plan must be changed so that this kind of perverse outcome is not possible. At the very least, a credible plan would meet all 91 flow targets described by the authority as achievable under current operating constraints, and the adjustment mechanism should harness innovation so that the remaining 21 targets are achieved by the time the plan is fully in force in 2019. If Minister Burke proposed something along those lines, you just might be able to say that the plan would deliver a healthy river and represent a good and proper use of taxpayers' money.

That is the opening statement I prepared. I would also just let you know, Senator Nash, that I have in front of me a presentation I recently sat through from the Environmental Water Holder which does contain some information on their utilisation of their entitlements over the past four years, which we could come to if that is of interest.

CHAIR: Thank you very much for that. Are you happy to take some questions now?

Mr La Nauze : Certainly.

Senator EDWARDS: Miss Talukdar, you have been corresponding with me via email over the last couple of days making reference to a report which you are looking to publish this week. What is that report?

Miss Talukdar : In 2011 all South Australian MPs and senators signed a pledge to agitate for a healthy river and a basin plan that returns the Murray to health. So this year, with just a few weeks remaining for the plan to be tabled, we have looked at all public speeches by MPs and senators from South Australia since the release of the draft plan. We would like to publish a report giving South Australians an indication of what senators and MPs have been up to, and the kinds and the range of ways in which they have been showing support for a healthy river and a good basin plan. That is what the report is going to be about.

Senator EDWARDS: So is this a witch-hunt or a name-and-shame? What are you looking to do? I do not know a South Australian senator, of the 12 of them, that does not want a good outcome. They have been working very hard to achieve a good outcome for South Australians.

Miss Talukdar : On the contrary: it is not a witch-hunt at all. You would know that at this point in time the mood in South Australia is that people want a good plan. It is a good time for people to know the range of ways in which their senators and members of parliament have been taking action for a good plan. This is exactly what the intention of the report is.

Senator EDWARDS: So, in that report, you will be covering the work that has been done by all senators in relation to the Murray-Darling Basin inquiry—the one in which you are participating now?

Miss Talukdar : We will include it. We have written to every senator and MP and asked them: 'Apart from what we have found in terms of public speeches by the senators and MPs, is there anything in addition you would like us to include?' So we would include being on the panels of committees and the other kinds of public things that senators and MPs have done, once we have heard back from their offices.

Senator EDWARDS: Many of the senators that I know have had numerous—countless—meetings with industry groups; they are bodies which are participating at all levels in this. I note that your organisation has never requested a meeting with me, although just about everybody else in South Australia that has an interest in the Murray has.

Miss Talukdar : We did meet with you last year but, yes, we have not met with you since the release of the draft basin plan, I believe.

Senator EDWARDS: I am interested to know whether your report is actually going to pick champions of the river or be looking to admonish senators for their—

Miss Talukdar : We are not looking at picking winners and losers out of this report. The intention is to, again, remind South Australians that all their senators and MPs have signed a pledge, and to show some of the ways in which senators and MPs haven't been living up to that pledge, specifically since the release of the draft plan.

Senator EDWARDS: With respect, I guess South Australians senators answer to South Australian electors and not the Australian Conservation Foundation, and putting in a submission to you people about what work has been done so that you can sit in public judgement on it is somewhat curious. In fact, I feel that if I were to give the emails which you have sent me to another senator from Western Australia who is sitting alongside of me, he might think that you have been verballing me.

Miss Talukdar : ACF has a significant supporter base in South Australia and we are accountable to our supporters in South Australia, in Adelaide, and, as I said, we have written to all South Australian MPs and senators and asked them: 'Please tell us the additional measures you have been taking, which we would like to include in this report.' This report is for the information of the South Australian public. ACF has a big supporter base in South Australia, as we do in the other states. We are a nationally focused environmental organisation, and South Australia and Adelaide are critical in the Murray-Darling Basin reform.

Senator EDWARDS: I cannot see how you are going to be objective in your assessment of senators' participation in this debate, given that you have not been involved in any of the discussions with either the ministers, the shadow ministers, the parliamentary secretaries or the shadow parliamentary secretaries in trying to get a result here, which is really where it is all done, rather than political grandstanding with press releases out there in the media. So I would probably, if I were you, rethink your policy and get around to see these senators rather than trying to verbal us in the weeks leading up to what we are all trying to do and that is get a result. But, anyway, I am not here to give you advice.

Miss Talukdar : Thanks for that, Senator. Just a quick mention, though, that we have regularly been meeting MPs and senators from all sides. Yes, I admit that we have not met you since the release of the draft plan, but we have been meeting MPs and senators from all sides on the issue.

Senator HANSON-YOUNG: I have some questions in relation to the adjustment mechanism. Surely, if there was a way of being able to adjust up the amount of water to be returned to the river as time went on and we were able to overcome certain constraints, that would be a good thing. Why are you so down on the adjustment mechanism as it is currently presented in the latest edition of the plan?

Mr La Nauze : There are two main reasons. Firstly, if the current version of the plan were adopted it would say: 'The outcomes that you achieve for 2,750 gigalitres, which I have summarised in that table, is all you need to do for ever and a day. That is the best you need to achieve and if you can find more efficient ways of achieving those outcomes that enables more water to be used for irrigation or other consumptive uses, then that is fine.' That does not incentivise the improvement of the ecological outcomes. Secondly, it gives states a right of veto over any water recovered through buy-backs above and beyond that level of environmental outcome or the levels set in the first version of the plan. That is constraining future governments even where the science shows that you need more water and that constraints have been overcome. The situation may be that the there is quite strong community support in a local region for water to be bought back. Essentially that water could only be recovered through infrastructure works. There is only so much water you can save out there. It is a fixed sum. I do not know how efficient we can get but you can only save water that is being wasted, and you can only save it through very expensive means.

Senator HANSON-YOUNG: So it is actually not designed to be able to recover more water as you go along; it is still capped at a very low rate—is that what you are saying?—not just for now but once the plan fully takes place from 2019.

Mr La Nauze : That is correct. If the adjustment mechanism allows adjustments provided they meet the same or better outcomes as is in a benchmark-model run, the authority currently proposes that benchmark-model run to be the existing run at 2,750 gigalitres. The minister is making noises in public about potentially upping that to 3,200. Certainly we are looking forward to seeing the results of such a model run. Potentially that would start to get it into a more acceptable level of environmental outcome. But either way, if it still had a level of failure in it—I would expect it would—you would expect that an adjustment mechanism would require you to address that failure before returning water back to consumptive use.

Senator HANSON-YOUNG: So do you think 3,200 gigalitres would meet these targets and put them into the green boxes as you circulated in your table 2?

Mr La Nauze : I suspect it would be insufficient. In fact, unless things have changed at the authority it will not make any difference to that first page, because in all their previous discussions about 3,200 gigalitres the additional water has all been in the southern basin. So you would likely see some improvements in areas like the Mid-Murrumbidgee River Wetlands and the Lower Goulburn floodplain. You would probably see some substantial improvements in Hatta Lakes and down in Chowilla, the Coorong and the Murray mouth. However, I do not think you would see all those red squares eliminated; no.

Senator HANSON-YOUNG: So, even at $3,200 that is not sufficient. What is your view on the existing increase to groundwater extractions under the current plan?

Mr La Nauze : I think Jim Stubbs covered that fairly well. I was watching on line before. The original proposal by the authority in the guide to the basin plan is the only groundwater proposal I have seen that has not meet with a degree of outcry from groundwater experts. I am not going to pretend to be a groundwater expert. The latest version of the plan has come back somewhat but it seems to be more like a wage-bargaining exercise than something that has been based on science.

Senator HANSON-YOUNG: Okay. What is your view on this constraint strategy being released 12 months after parliament is expected to sign off on the plan? Is it really worth it by that stage?

Mr La Nauze : I think the constraints management strategy is absolutely essential. I am not as worried about the delay; what I am worried about is the way that it is written into the plan—it does not actually drive the systematic assessment of those constraints, an assessment of the feasibility of overcoming them and then actually ensuring that they will be overcome where that is physically possible. It leaves that option open but it does not drive it. But I think some simple wording changes to the constraints management strategy in the plan would enable that, as well as realigning the adjustment mechanism to work in the way that I said. So it actually requires the overcoming of constraints and achieving a better environmental outcome before you start to return any water for consumptive use.

Senator HANSON-YOUNG: If the draft plan were to be introduced into the parliament as is, with the current adjustment mechanism, with the cap on the amount of water to be returned to the river, the significant emphasis on irrigation infrastructure and a figure of 2,750 or 3,200, do you believe it is something the parliament should pass?

Mr La Nauze : No. That represents a very substandard environmental outcome, one that would certainly not meet the definition of an environmentally sustainable level of take under the Water Act; and it would potentially allow that outcome to remain the same whilst we poured billions of dollars into returning water to the consumptive pool. It would be quite a perverse outcome.

Senator HANSON-YOUNG: Thank you.

CHAIR: Thank you very much for your evidence. I have to say that, given that the 2,750 gigs is a political compromise, that the groundwater extraction estimation does not include the connectivity between the river water and the groundwater and that the science is saying that at a mid-shot we might lose a minimum of 3,500 gigs of run-off by 2050 if we get a 1½ to two degrees increase in temperature and a 15 per cent decline in rainfall, from the two per cent of the Murray-Darling Basin where 38 per cent of the run-off comes from, we might all be wasting our time anyhow.

Mr La Nauze : Can I just offer a quick comment there. I think you have hit on a very important point. The authority, in the version of the plan they released last year, said, 'Look, we've decided not to consider the potential impact of climate change; we will do that between now and 2015 and factor that into the 2015 review.' The latest version of the plan ditches the 2015 review, and therefore any consideration of climate change. The adjustment mechanism does not allow for the incorporation of any of the scientific uncertainties that the authority has identified and that the CSIRO has emphasised.

CHAIR: Thank you very much for your evidence.

Senator HANSON-YOUNG: Thank you.

Mr La Nauze : Thank you.