Nola Marino (Forrest, Liberal Party) Share this | Hansard source

Most people have no idea of the hardships inflicted on people in the Murray-Darling Basin by federal and state Labor governments. I will give a brief history to show where Labor failed so badly. The National Water Initiative was pioneered by Deputy Prime Minister John Anderson in 2004, triggered by the New South Wales Labor government's attack on New South Wales groundwater licensees. The New South Wales government had invited a cross-section of people to assist in the drafting of water management plans. However, in 2003, when these plans were published in the government gazette, they bore no resemblance to the plans as drafted and recommended to the New South Wales minister. The plans as published provided for a 49 per cent across-the-board cut to all groundwater licences in New South Wales without compensation.

As most irrigated properties in the New South Wales Murray-Darling Basin are not viable without water, the value of the land is also dependent on that water. Many farmers faced bankruptcy as their farms dropped below the value of the mortgage on their land. Whilst the water-sharing plans were challenged in the courts, Deputy Prime Minister John Anderson stepped in to insist on the irrigators. One of the outcomes was the 2004 National Water Initiative, which amongst other things enshrined the concept of permanent tradeable water entitlements that cannot be compulsorily acquired without compensation on the whim of a state government.

Remember that state governments by the late 1970s had virtually ceased major maintenance and renewals on government owned irrigation schemes, many of which had been constructed by hand by soldier-settlers in the 1920s. Irrigation assets had been actively allowed to deteriorate past the end of their useful lives, and government owned schemes often had water losses of up to 48 per cent as well as financial losses under state government management. As a result, the Keating government pressured state governments to transfer these loss-making irrigation schemes to local grower-irrigator ownership to reduce the pressure on state government finances.

In 2006, a group of irrigator owned schemes formed the Bondi Group to promote a greater awareness of their work to improve water efficiency and how these schemes operated with the NWI. The majority of the Bondi Group members owned and operated what had been loss-making schemes when they were under government control. The irrigators—the farmers—actually turned these into financially sustainable systems. Harvey Water in my electorate was a member of the Bondi Group. Others were Ord Irrigation and Gascoyne Water from WA; Coleambally Irrigation, Murray Irrigation and Western Murray, amongst others in the Murray-Darling Basin; Clyde Water Trust from Tasmania, the oldest continuously operating irrigation scheme in Australia, established in 1832; North and South Burdekin boards from Queensland; and Pioneer Valley in Queensland, the newest irrigation scheme in Australia, which in 2006 was and still is in the process of being transferred to irrigator ownership. The Bondi Group met with the then parliamentary secretary for water, Malcolm Turnbull, in 2006-07, focusing on the latest ideas in water efficiency being introduced by those irrigator owned schemes such as total channel control and new channel lining technology. Harvey Water and Coleambally in particular were recognised worldwide for their groundbreaking work in irrigator funded water-saving infrastructure upgrades.

The Bondi Group was proud of the progress their members had made in infrastructure upgrades and water saving—improvements that would never have been made if they were still in state government ownership. These were practical water savings being made at a time when state governments were in general not even doing routine maintenance and renewals.

In January 2007, Prime Minister John Howard delivered what is known in the water industry as the Australia Day Speech, setting out a $10 billion national water plan. The then Minister for the Environment and Water Resources, Malcolm Turnbull, in the second reading speech on the Water Bill 2007, stated:

This Water Bill is the first water reform program introduced into this parliament in 106 years. It is truly a nation-building bill, not only for this generation but also for the generations to come. It will ensure the sustainability of one of Australia’s great natural assets. It will underpin our nation’s water resources and it will secure the future for the industries, the communities and the environments that rely on them.

While the Howard government focused on providing better outcomes not only for the environment but also for basin communities, the incoming Labor government decided to take a wrecking ball to those basin communities. The Labor government guide to the Murray-Darling Basin Plan was prepared without public consultation, largely in secret by the members of the Wentworth Group. The guide was met with shock and distress by basin communities. Even ABARE felt compelled to raise serious concern about the guide. ABARE calculated the gross value of irrigated agricultural production based on a figure of 3,500 gigalitres, or a cut of 29.1 per cent of total water use. The ABARE report found such a move would cut production by 15 per cent, or $940 million each year. The worst-hit areas would be the Murrumbidgee, Gwydir, Goulburn and Murray regions of New South Wales, with at least 88 towns across the basin affected in some way.

An inquiry into the impact of the Murray-Darling Basin Plan in regional Australia made a series of recommendations that, needless to say, Labor totally ignored. There were also a series of Senate inquiries on problems relating to the Murray-Darling Basin that exposed Labor's underlying problem. The problem was that the Labor government had absolutely no idea at all about irrigation and had no clear understanding of the nature of water entitlements or allocation, or the difference between high-security water and low- or general security water.

Let me explain the differences and the impact that lack of understanding would have on Labor's buyback. Water entitlements under the Water Act come from the definition used by irrigator owned schemes across Australia. It means the right of access to a certain maximum number of megalitres of water in an irrigation year. It is the right to the water, not the water itself. One water entitlement equates to the right to access one megalitre. Water allocation under the Water Act again comes from the definition used by irrigator owned schemes across Australia. Allocation is the percentage of volumetric water actually available in an irrigation year. For example, if you held 100 water entitlements and the allocation announcement was 40 per cent, you would be entitled to take 40 megalitres of actual volumetric water in the irrigation year.

The definitions were drawn from the privatised irrigation schemes because similar concepts under state law all use different terminology, while privatised schemes throughout Australia use consistent terminology. Irrigation allocation in the basin is prioritised based on different levels of security. For example, town water has the highest priority and has 100 per cent allocation. Water for industrial and commercial use has the next level of priority. High-security irrigation water, usually acquired for permanent planting, is next. General or low-security water has the lowest priority and is used for annual crops. Supplementary water covers a range of different levels of security and in some cases is water only available in flood events. In other cases it relates to water entitlements that are being cancelled in the future. In some instances the concept of separate environmental priority water has been introduced. These water entitlements are converted based on a specific formula from high- or general security water. It is not a one-for-one conversion.

So why was a sound understanding of these concepts so important? Because the water target is not the total number of water entitlements but the allocation that needs to be available in any given year. During the peak of the drought, allocation announcements in the Murray for the general security water were often nil, and in the Murrumbidgee allocation for general security water was usually less than 10 per cent. On the other hand, the high-security allocations in the Murrumbidgee were usually 85 per cent. In many circumstances it was generally believed that there would never be an allocation for supplementary flow. So what was the focus of the Labor buyback? To buy water entitlements for the lowest price possible, focusing on general security water. There are many examples of millions of dollars being wasted in the Labor buyback, and one of the best known is the Toorale Station debacle.

The Labor minister at the time announced that Toorale Station had been purchased for $23.75 million and that Labor believed it would return about 20,000 megalitres of water to the environment in an average year. However, Ross's Billabong only held about 10,000 megalitres. More importantly, the water entitlements were supplementary flow entitlements that flow naturally into the land depression in a flood year. The water entitlements are listed on the Department of the Environment's website as 9.720 gigalitres of unregulated river special additional high-flow entitlement. This 'recovery' is not shown in the table because there is currently no long-term diversion limit equivalent factor available to estimate the long-term average annual yield recovery volume for this entitlement.

So $23.75 million dollars of public money were spent without one drop of water effectively being able to be credited to the Labor buyback program. The Labor buyback program focused on water for the lowest possible price for entitlements, not on volumetric yield—the actual water. Nor did it take into account the cost to infrastructure assets as water entitlements were sold away from expensive irrigation infrastructure.

The Labor government was creating a massive stranded assets problem for irrigator owned schemes and state government infrastructure operators. Minister Wong treated the local communities concerned with contempt, decimating the Gwydir community in 2009 with the purchase of 240 gigalitres of general security Gwydir water entitlements for $303 million from Twynam Agricultural Group. At that stage, the New South Wales Labor government finally issued a carefully drafted notice in the Government Gazette of the State of New South Wales that embargoed the purchase of water entitlements by the Commonwealth whilst leaving open water trading by irrigators.

New South Wales was embittered by the fact that almost all of the buyback had focused on New South Wales, as the Victorian Labor government had largely stymied buybacks in their state. The socioeconomic damage and stranded asset problem at that stage was almost entirely happening in New South Wales. The embargo lasted for almost four months whilst negotiations raged between the Commonwealth and New South Wales. The outcome was a change in Labor government policy on the buyback approach, if not the buyback itself. More lessons were learned the hard way when Commonwealth environmental flows caused serious flooding in the Murrumbidgee in 2010.

A great deal has been learned over the years since the introduction of the Water Act in 2007. The Water Amendment Bill we see before the House refocuses government policy on water saving through infrastructure upgrades and efficient water use, in accordance with the original intention of the National Water Initiative 10-point plan. New methods of delivering water more efficiently by water shepherding and the award-winning Computer Aided River Management system, CARM for short, developed by Water for Rivers, has been developed to meet the new challenges. Water efficiency now is not just a goal for the irrigation community but is also a goal for environmental water holders, as it should be, so that everyone in the basin treats water as the precious resource that it is. It is certainly worth more than gold in my view, and in a country like Australia the importance and quality of water cannot be underestimated. On that I conclude my remarks.

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