David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

As I had outlined last night in the debate on the Water Amendment Bill 2015, there are lot of critical bits of information that the general public and, I think, members of this House have not appreciated about the irrigation system and how it works. If you recall, I mentioned high-security licences, general licences and the matter of allocations. People have made a rather erroneous assumption that, when you see dry riverbeds in the middle of a 10-year drought, it is because irrigators have sucked all the water out of the river. That is a popular misconception. We need to put on the record that the irrigation systems in the Murray-Darling Basin are very well-regulated and it is the allocation that represents what water is taken from the river, not the nominal figure mentioned on the water licence.

Throughout the drought, allocations were zero in many years; so no water was taken by irrigators. For many years it was less than 10 per cent. So you might pay $15 million for nominal huge water licences and only get to access to three or four per cent of it. As the rains fall and the flows change, the allocations are distributed appropriately so that there is always an appropriate flow. The fact is that it is a highly altered system. All the weirs and lochs along the whole Murray-Darling Basin have changed the nature of the rivers in the catchment. People have this concept that the Murray-Darling, at some stage of its life, was like the Danube or the Mississippi—a massive river continually flowing. The early explorers and settlers recorded that it was at very many times a chain of ponds.

Irrigation has delivered more water to the environment because irrigation relies on capturing water in times of plenty and regulating it through a series of irrigation. It turns land that is hardly usable, except for low-level grazing, into a highly productive agricultural food bowl. As I mentioned, it is all well and good to develop the food bowl in the north—we totally support that—but there is already an existing food bowl in the south of the country. It is called the Murray-Darling Basin. We need to get the best return, a triple-bottom-line delivery of good outcomes. It is not only the environment that requires water but, most importantly, the food and produce that comes from it.

The Murray-Darling Basin Plan has bipartisan support, but we do not want to throw the baby out with the bathwater, so to speak. About two-thirds of the 2,750 gigalitre water recovery target has already been achieved. As part of it, the 1,500 gigalitre buyback limit is a very sensible piece of policy. The coalition campaigned on this. The irrigators, the communities and the people who produce the food for our nation—and for export to other nations that are crying out for protein and other high-quality produce—require some level of certainty. If there is no water, these communities and all their production simply vanish. Ill-timed and poorly targeted buybacks can potentially cause ruin, turning thriving towns and villages into ghost towns.

The efficiency measures behind the 1,500 gigalitre buyback limit ensure a good outcome. By increasing efficiencies—and there are huge programs going on delivering those efficiencies—we can deliver more water for irrigation and growing crops as well as improving the environmental outcome. The recent audit and stocktake of the sustainable diversion limit has confirmed just that. The independent stocktake has looked at all the measures being undertaken. The latest round of improvements involves $263½ million—so these are not small engineering works; they are massive. These measures are returning 20 gigalitres of water to farmers but are also delivering 77 gigalitres of water for environmental flows. The stocktake has also identified that there is an efficiency dividend of about 500—perhaps 600—gigalitres for agriculture, irrigation of crops and feeding stock. This will deliver for the bottom line. A gigalitre of water turns into millions of dollars of produce, income which can support communities while the produce itself supports the nutrition of the nation and the world. I am very encouraged by this initiative. We are delivering on a coalition promise. The producers and the communities see this as vindication for all their campaigning.

Water is like liquid gold. It is stored in times of plenty and used wisely by irrigators. They pay a heap of money when it is traded, so it is a highly valued asset. Without it, we do not have a food bowl. That is why it is so important that we deliver this efficiency dividend and allow people to do what they do best, as they have done over the generations since we encouraged them to set up there in the late 1800s. I thoroughly commend this bill to the House.

John Cobb (Calare, National Party) Share this | Link to this | Hansard source

As somebody who was very involved in this in the early days, I certainly want to speak on the Water Amendment Bill 2015. The whole issue is about providing water security into the future, and I would like to take time to reflect on the importance of a strategic plan for the Murray-Darling Basin and what it means for all those directly affected. I guess we are all well aware of the debate raging around the best plan for the basin, and that has changed at various times over the years. It is vital that the Murray-Darling Basin Plan be implemented in full, on time and effectively.

In this whole debate on drought, rain and everything else, I cannot believe how often it seems to be forgotten that communities right across the basin, particularly Calare communities, rely on that water source for various reasons. The legislation to cap water buybacks at 1,500 gigalitres will ensure certainty for farmers, for businesses and for the communities along the Murray-Darling Basin who rely totally, in some instances, on that water for the community, for their livelihood and, as it were, for their existence. It is no accident that, before Europeans got here, the kangaroos, the native people and everybody did not stray very far from the rivers except in very wet years. That is why there are more kangaroos in Australia today than there were then, simply because we have put water where the rivers do not. That is why the rivers are such a big deal to everyone.

There are actually three watersheds in Calare. There is the Sydney Basin on the eastern side, around Oberon and down through Lithgow. It is rather surprising to realise that water actually flows through the mountains—not west from them but through them to Sydney. We also have the Lachlan, which is probably the biggest part of the catchment in Calare, and the Macquarie. The Lachlan starts off in my colleague the member for Hume's electorate, flows into Wyangala Dam and down to Cowra, Forbes and Condobolin and out into the member for Parkes's electorate, and ends up in Sussan Ley's electorate. As to where it ends, I am pretty sure I am right in saying Senator Bill Heffernan, or his family, is probably the recipient, if it flows that far. This is something that Senator Wong could never get. She hit the Lachlan harder in her buybacks than any river pro rata in the whole basin. I used to say to her when I was the shadow minister, 'Why are you buying the livelihood of the Lachlan when it actually only gets into the system about two years in every hundred?' About one in 50 years the Lachlan actually runs into the Murray-Darling Basin out of its own borders, as it were. Of course, we also have the Macquarie. We get more irrigation in Calare from the Lachlan. Once again, the member for Parkes is a recipient of the Macquarie, with most of the irrigation. But still we have the Bogan running through us, and that is all part of the Macquarie system. The watershed runs quite a long way, up towards Oberon, and, of course, goes down through Warren, Nyngan and all of those towns until it also—much more frequently than the Lachlan—is part of the Murray-Darling system.

The catchment of the Lachlan is eight per cent of the Murray-Darling Basin and it is enormously important to my electorate. This legislation is integral to the coalition's plan for water security in Australia. It is a plan that will have real benefits for all stakeholders. Farmers in my electorate deserve to know where they stand. They deserve to have certainty and to know that there is not going to be something happening which will make water unavailable. Agriculture is obviously the catchments' main industry—40 per cent of the state's agricultural production, actually. The Lachlan and Macquarie Rivers irrigate land along the rivers, seeing the production of fruit, vegetables, cotton, fodder crops and cereal grains, and there are dairies, feedlots and piggeries that depend upon these rivers. The legislation ensures that these producers will be able to rely on the water source into the future. It is a strategy that will ensure viability today, tomorrow and into the future.

I think it is forgotten sometimes that back in 2007, when we took the emergency measures that had to be taken, without the dam system, those rivers would have been dry. There were quite a few times, I have no doubt, that the Murray would have stopped running without the dam system. I think people have to remember that that was a one-in-100-year situation. You can only go so far in cutting out people's ability to use water simply because at some stage in 100 years there is going to be a severe water shortage. Without storage, there is absolutely no doubt that not only the environment but everybody else will run out of water at some stage. I think the way that nothing has happened about water storage in many years in the Murray-Darling Basin and elsewhere is pretty shameful.

As I said, the legislation ensures the water availability into the future, its viability and its strategic, long-term ability to look after our those communities, be they farming or whatever else. The government is delivering on its pre-election commitment to the Murray-Darling Basin communities by introducing this bill. I appreciate the previous speaker saying that the opposition is agreeing with us on this. But we are determined to prioritise water recovery efforts through investment. The original plan was to get the water savings through efficiencies, through working with the community, particularly with farmers, to be able to make efficiencies, save water and share the savings. That went into Senator Wong deciding she had to buy all the water in Australia rather than do it by efficiencies and savings. But where we are at today—I think we all have to agree that enough is enough. We have to look after the environment: no argument. But we also have to be very aware of the people who depend upon that water for livelihood, for community, for urban issues, for manufacturing, for everything. Water cannot be our master; it must be part of the community.

Mechanisms will be in place to ensure the caps are in force. The government reports progress on water recovery on the Department of the Environment website, and this practice will endure following the passage of the bill. We have a commitment to long-term water viability for everyone. You cannot satisfy everyone up where the water is gathered and you cannot satisfy everyone totally down the other end, so everything has to be a compromise. When something as precious as water, something that none of us can exist without—whether it is for lifestyle, whether it is for production, no matter what it is, at the end of the day we all need it; at the end of the day we cannot go without it. And if you live in a city you are a recipient of the benefits of that water, what it produces and the quality of what it does.

I am not going to say very much more except that this is a necessary piece of legislation, because those who live with it and use it need to have certainty. They need the ability to get water back where necessary when it is spare. The environment, I think, has been well looked after in all this—far better than most people would have thought it would be. As I said, everything has to be compromise between the needs of everybody but at the end of the day none of us is going to exist without water and what it produces. I commend this bill to the House. I appreciate very much the fact that we are agreeing on the Water Amendment Bill. I just hope that in 100 years time when we next have a drought—I think the Lachlan in six years out of seven had no allocation at all. We have to have a future. We have to have water. I commend this bill to the House and I thank the opposition for working with us on it.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I of course support the Water Amendment Bill 2015, which proposes to put a cap on the 1,500 gigalitres of water buyback from Murray-Darling Basin irrigators and water users. I am concerned that this bill was not in fact put into the House some three years ago. We have known for a long time that the outcomes of water buyback in the basin have led to the destruction of many of the irrigator communities in terms of their economies of scale, the capacity of food manufacturers to get sufficient product—whether it is dairying, rice or oilseeds—to be as efficient as they need to be, because in the midst of the worst drought on record we had the extraordinary option taken up by the then minister for the environment, Senator Penny Wong from South Australia, who suddenly realised what a gift the drought had delivered into her hands. Of course we had established the Commonwealth Environmental Water Holder. It needed a bucket of water to be able to release into the environment to sustain and improve the quality of the water related ecosystems across the basin.

The original idea was that all of that water for the Commonwealth Environmental Water Holder would be found through the improvement of the works and measures which deliver the environmental water or from on-farm water use efficiency measures, all of which would have added to the productivity of the basin, not detracted from or destroyed it. But, in the midst of the worst drought on record—when in my area in particular the banks were attacking my irrigators because they had doubled their debt loads as they tried not to send their herds through to the abattoirs or as they tried to keep their crops alive—she put into the system a tender which said, 'If you want to sell your water, go for it.'

Up to $2,400 a megalitre ended up passing not into the pockets of the irrigators who sold their water but to the banks. Over 90 per cent of the funds that were generated by that water buyback on behalf of the Commonwealth Environmental Water Holder went straight to the banks in northern Victoria. Tragically, that left half of my irrigators dependent on the temporary water market, a corrupted market and one that I hope the ACCC deals with urgently. I deliberately say a 'corrupted' market because it is not transparent. If I wanted to step out of Parliament House today, stand up an A-frame in the car park and call myself a water trader, I could. It is impossible to find out who owns the water and who trades the water.

We do know, of course, that two of the biggest speculators are the South Australian government and the Victorian government. The Melbourne Water authority owns 75 gigalitres, which it plays with in the market to make it one of the most profitable water authorities now in Australia, and all at the expense of primary production, at over $220 per megalitre now in the temporary market and going up.

That means that dairy farmers can no longer pay to irrigate. They are stopped at about $70 or $80 per megalitre. It means that you are just left with further speculation and a few primary producers, like almond growers, who have a much smaller value to the economy in terms of their employment generation, export and domestic earnings—they are important; I do not deny that for a second—but who can pay that dollar. They do not generate the income, the billions of dollars of outcomes, that people investing in the dairy industry generate, but those people are being destroyed.

This temporary water market, of course, was accidental. It was never imagined that it would be the outcome, but too much about the Murray-Darling Basin Plan is a comedy of errors. It is accidental. It is a consequence of incompetence and capturing at the time by the Greens, who were the balance of power for the Rudd-Gillard-Rudd governments. We are now bearing the legacy of that.

On the 1,500 gigalitre cap on water buyback from irrigators, I would have hoped that the bill would also, at least in its memorandum of understanding between states, spell it out. But, in fact, virtually all of that water has already been taken from irrigators. There are only about 300 or so gigalitres left to be removed from irrigators.

I would also hope that it is understood that Victoria has already overdelivered on the agreements about its end-of-valley contributions to the Murray-Darling Basin Plan and the Commonwealth Environmental Water Holder. I rechecked this fact with the ex-minister for water and the environment, Mr Peter Walsh, last night, just to make sure that I was getting it right. He said, 'Yes, Victoria has already overachieved in the targets that were set for it in giving up its high-security water to the environment.' I want to make sure that the other states understand that in the scramble for the last few gigalitres to go to the Commonwealth Environmental Water Holder.

The 450 gigalitres which are also mentioned in this bill are a bit astonishing. I understood that originally this bill was not going to talk about the constraints strategy, one of the biggest farces and most destructive elements of the Murray-Darling Basin Plan as it now is configured. People are often aghast when I explain to them what the constraints strategy is. Certainly overseas environmentalists laugh and say, 'You've got to be kidding,' but, no, I am not. The tragedy is that, as a response to a threat from the South Australian Premier—still the same Premier today—to a High Court challenge, the Greens and Labor, in a last-minute, last-ditch effort, threw an additional 450 gigalitres at the lower end of the Murray system, saying, 'Look, here's a series of objectives which need to be and can be achieved.' All of this was in fact described in the bill which then became law early in the following year, 2013.

These outcomes included nonsense like keeping the mouth of the Murray flowing 95 per cent of the years and in every year without the aid of bulldozing, because someone pretended that that was an environmental measure and that somehow that actually reflected on the health of the basin or its sustainability. Most people laugh out loud when they hear that, but the tragedy is that it is now L-A-W. There is also the outcome which is supposed to be reduced salinity in the Lower Lakes, and higher lake levels. I am all for that. I think it is a jolly good idea, but most of the salt contributed to the Lower Lakes comes from South Australia itself, from its own Mallee areas. Let them look at salt interception works, perhaps. Certainly let us look at engineering solutions to achieve the outcomes that are now designated in law for the lower Murray River.

Those outcomes, a number of experts are now concluding, can be better achieved for them with engineering or works and measures outcomes and not with what is currently required by law, which is 450 gigalitres in addition to the sustainable delivery yields identified in the plan. Those 450 gigalitres are to be—so called—recovered. I object to that term—'recovery' implies it was stolen or lost. Those 450 gigalitres are, again, to come from the water resources of the mid-Murray and upper Murray. In pushing it down the system—given things like the natural Barmah Choke and given the fact that most of our cities and towns and our best agricultural land is in the riparian regions of our tributaries and the Murray itself—we are going to see flooding. It is not denied; it is explained very carefully to us that in six out of every 10 years those regions will be flooded by mid- to high-level floods. I want to commend the member for Indi, who read out a letter from Jan Beer, an expert in these matters on the upper Goulburn tributaries, who has identified very clearly what the floods—these man-made, deliberately instigated floods—will do to the environment and the productivity of the various parts of the Murray-Darling Basin involved: all of southern New South Wales and northern Victoria through the Mallee.

What other nation on earth would deliberately, as a political fix—a last-minute, 30-seconds-to-midnight political fix for a particular government—agree to flood and so environmentally degrade whole sections of their river basin without compensation and with only $250-odd million for ameliorating the impacts but overall with $1.77 billion for state agencies to go about implementing this plan? How extraordinary—but that is what we have in front of us. So, instead of saying, 'Let's make it more flexible for'—so called—'recovering the 450 gigalitres', this bill should have said, 'Let's look at how to achieve the objectives now in law for South Australia by all measures, in particular examining environmental works and measures and engineering solutions.' Why was that not in this bill instead? I find it extraordinary that that is not in this bill. I hope amendments in the Senate might address this.

I am also very concerned that this bill does not address the hypocrisy of the current Commonwealth Environmental Water Holder's requirement that if it trades water—as it should and as I believe it wants to, given that it has only been able to use half of the water in its bucket at the moment—back to irrigators, which would reduce the price in the temporary water market and which, as I have just described, is destroying productivity in the basin, the Commonwealth Environmental Water Holder by regulation must spend every cent of that trade on further water buyback from irrigators. So, here we are today with a bill in the House saying, 'I'm going to cap that water buyback.' On the other hand, we have another piece of legislation which says, 'If the Commonwealth Environmental Water Holder trades, it has to spend every cent on further water buyback.' Go figure. I believe the parliamentary secretary is going to address this matter soon as a legislative priority. I certainly hope so, but it would have been rather good to have had it also in this piece of legislation for debate, because of course it is hypocrisy for the Commonwealth Environmental Water Holder to continue to have to buy back from irrigators while we are trying to cap buybacks with the other hand.

We also, of course, have said to you that people across the basin are suffering a fate which must be addressed urgently. I want to quote from an article in yesterday's Shepparton News: 'Deniliquin food producers will demand a re-evaluation of the Murray-Darling Basin Authority plan when federal representatives visit the area this week.' Ms Shelley Scoular of the Southern Riverina Irrigators group is quoted as saying: 'The plan is flawed. The social and economic impacts are hurting our communities.' She said that the Murray-Darling Basin Plan had been a knee-jerk reaction to addressing environmental issues during the millennium drought, which had led to successive federal governments inadvertently putting the food production industry at risk. 'This was never the intention of the Basin Plan, but that's how it's turning out,' she said. That sentiment is echoed across the basin at meetings like the one in Barham a few weeks ago, where 1,000 people came. A succession of speakers—food producers, people from small decimated communities, rural councillors, schoolteachers and local government bodies—all called for a stay on further implementation of the Murray-Darling Basin Plan until it was comprehensively evaluated in respect of all of the unintended consequences, the waste of billions of dollars in poorly conceived and managed spends, and the inadequate consultation which has seen stakeholders treated like mushrooms or insulted as ignorant when they should have been treated as key participants in the process.

There has been a complete failure to understand the need for a balance between strategies that sustain the environment, the economy and human communities. I have to say that in my electorate of Murray half of my irrigators now are dependent on a corrupted water market which, if not fixed sometime soon, will see the $1 billion of federal government investment in the so-called food bowl modernisation simply being spent to shut down half of the irrigation system, destroying billions of dollars of investment in food manufacturing and destroying jobs. There is already 27 per cent youth unemployment in my electorate, a consequence of us losing over 900 of the 1,900 gigalitres our irrigation system was once entitled to. You cannot have that sort of devastation and still have full employment, investment and expectation of a better agribusiness outcome. The 27 per cent youth unemployment is matched by higher-than-national-average adult unemployment. I have food manufacturers now lining up to say to me: 'What is going on? How come state and federal government policies—both previous and, sadly, even ongoing—are presiding over the destruction of agribusiness in the Murray-Darling Basin and the lack of a balance in the triple bottom line?' This can be done better. It must be done better. My agricultural communities have been financially devastated, but so has the economy generally. The mental health consequences and the destruction of the futures of farm children and the broader community should not be tolerated in a nation such as ours.

So I am pleased this bill has finally come to the House, but it is not sufficient. More has to be done urgently. I commend the Senate select committee inquiry that will shine a light in very dark places in relation to this Murray-Darling Basin Plan. We have to act soon.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to speak on the Water Amendment Bill 2015. As Dorothea Mackellar once said, we live in 'a sunburnt country', a land 'of drought and flooding rains'. That is why this water bill is important. We need to try to get the balance as right as we possibly can in this country. We will have at times in this country shortages of water and periods of drought, and at other times we will have periods of flood. The Water Amendment Bill gives effect to the government's commitment to legislate a cap on surface water purchases in the Murray-Darling Basin to 1,500 gigalitres. We hope that the opposition gets on board, and we also hope that the Greens get on board, because they need to realise how important the Murray-Darling Basin is to our Australian economy with the jobs and the wealth that it creates in our nation.

Here are a few numbers. The Murray-Darling Basin—and these are the numbers from 2012 and 2013—accounted for over 50 per cent of Australia's irrigated produce, which included nearly 100 per cent of Australia's rice, 96 per cent of Australia's cotton, 75 per cent of our table grapes, 59 per cent of our hay, 54 per cent of our fruit, 52 per cent of the production of sheep and livestock and 45 per cent of our dairy.

As other speakers have raised in this debate, there is an enormous opportunity in Australia if we are able to balance our water rights in the Murray-Darling Basin, because the potential that we have, through the China-Australia Free Trade Agreement, to increase our agricultural exports is a once-in-a-century opportunity. We have seen China go through enormous change. We have seen them drop their communist and socialist policies and open up their markets, understanding that free markets are the way to lift people out of poverty and to raise prosperity for the nation. That is what they have done. They have gone through an enormous manufacturing cycle. In doing so they have raised the living standards, prosperity and wealth of that country. That gives us, here in Australia, an enormous opportunity to export to them, because it is true that Chinese citizens, the people who live in China, are prepared to pay a premium price for Australian produce. We have seen it where they have had the scares about their own products, like the melamine scare with the baby milk formula; that was just one of many scares that gives great faith in Chinese consumers paying a higher price for Australian produce.

We need leaders in this country that have the vision and the foresight to see these once-in-a-century opportunities and to grab them with both hands, because that is where the future prosperity of our nation lies. So it gives me great disappointment, when I look back over the history of the China-Australia Free Trade Agreement, to see a quote from June 2005—over a decade ago, when the agreement was first being negotiated—of something said on Meet the Press by one Bill Shorten. This was his foresight about the future of agricultural exports. He said: 'What is it that we are going to sell to China in the future that we are not selling them now?' This is quite frankly an unbelievable comment. To think that someone would have such little vision that they could not see the potential of exports to China! To think that, back in 2005, they made such a bald-faced and ignorant comment as, 'What is it that we are going to sell to China in the future that we are not selling them now'! Well, I will tell you—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

If you could just wait a moment. The member for Fraser on a point of order?

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I know the member is a good wet in the party room, but he does seem to be straying a little from the substance of the water bill and I would ask you to ask him to return to the topic of the bill.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Fraser. The member for Hughes is straying a little bit, but I know—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, during this debate on the water bill, many other speakers have raised the China free trade agreement—the issues and the opportunities, and why it is important that the water bill gives opportunity on water, because it is water that creates the opportunity for these people to export and it is done. And this has been discussed quite extensively during other contributions to this debate.

Opposition members interjecting—

Mr McCormack interjecting—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The Parliamentary Secretary might be a little bit excited, but just chill. I want to hear the member for Hughes.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. You would think that any person in this country would understand the opportunities of the future in which we have to export. But we have an alternative Prime Minister of this country who, back in 2005 when the China free trade agreement was first put on the table, wondered, 'What else are we going to sell to them that we are not selling them now?'

Well, I will give you a few examples to show how wrong the current Leader of the Opposition is. Let us take citrus, which mainly comes from the Murray-Darling region; back in 2005, we sold China zero citrus. Apart, perhaps, from a few Chinese tourists who snuck a few mandarins or a few tangelos or oranges or lemons in their backpack to take home with them on the plane, our exports to China of citrus fruit in 2005 were zero—a duck egg. The Leader of the Opposition asked, 'What else can we sell them?' Well, last year Australia sold to China $30 million worth of citrus product—from zero to $30 million—and that was made up of about $13 million worth of oranges, $8 million worth of mandarins and so on in other fruits. That is just the tip of the iceberg, because, once the China free trade agreement comes in, we will see a substantial reduction of tariffs on citrus fruit going into China. This is a golden opportunity.

Here is another example—again, something that the Murray-Darling region produces a lot of: our table grapes and wine. Back in 2005, we sold to China $9.8 million worth of wine. The current Leader of the Opposition asked, 'What are we going to sell them in the future that we are not selling them now?' Well, from 2005 to today, Australia has increased our exports of wine from $9.8 million to $224 million. That is a 20-fold increase. Another $210 million of wine was exported from this country to China—that is the increase. And the current Leader of the Opposition thought, 'What else can we sell?'

But that is only just the start. This is just the tip of the iceberg because, once the free trade agreement with China comes in, tariffs on Australian wine that are currently at 14 to 20 per cent—which, by the way, puts Australian exporters at a competitive disadvantage against New Zealand and Chile, who have much lower tariffs—will be reduced. So we have had that 20-fold increase, even though we have had that competitive disadvantage on the tariffs. Those tariffs of 14 per cent to 20 per cent are reduced to zero in four years—zero. These are the opportunities ahead.

I will mention some of the other reductions. In the dairy industry we are seeing the elimination of a 15 per cent tariff on infant formula in Australia in four years; the elimination of the 10 to 19 per cent tariff on ice-cream lactose; the elimination of the 15 per cent tariff on liquid milk within nine years; and the elimination of the 10 to 20 per cent tariff on cheese, butter and yoghurt within nine years. This will create wealth, opportunities and tens of thousands, if not hundreds of thousands, of jobs in the Australian economy. And it goes on. The current tariff of 10 to 25 per cent on macadamia, almonds and walnuts goes down to zero within four years. We also see with all other fruit—mangoes, nectarines, cherries et cetera—the elimination of the current 10 to 13 per cent tariff within four years. It is the same for fresh vegetables, with the current tariff of 10 to 13 per cent going down to zero in four years.

We produce some of the greatest quality products in the world. This is a once in a century golden opportunity for our nation to grab this free trade agreement—to have faith in our nation's exporters; to have faith in our people—and allow those exporters to get onto that Chinese playing field and compete at least on a level playing field if not with a competitive advantage against other countries. We have that opportunity but, sadly, this is all at risk from a union campaign that is not based on any factual information but is simply based—

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. We all drink water. Water is ubiquitous in Australia. But that surely does not mean that the member can speak about anything in Australia that is touched by water.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I uphold the point of order and will ask the member for Hughes to contain his remarks in the remaining four minutes directly to the bill, please.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on the point of order: it is quite simple—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

No; I have ruled on the point of order. You have had a wide range. Just continue for the last few minutes on the bill.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I will speak on the importance of water to the Murray-Darling Basin. It may be something that the member for Fraser does not understand, but you actually need water, Member for Fraser, to grow things. That is actually how it works. You have irrigation and you grow citrus fruit and other produce. That is how it works. I know that might be a unique concept for you, Member for Fraser. You may have difficulty in understanding the reason that we need to get this Water Act correct.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The member for Hughes should direct his remarks through the chair.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker. Through you, of course, Deputy Speaker, I am trying to make the point to my good friend the member for Fraser that it must be realised that we need water to grow the crops. It is these crops and the livestock that come from that water that drive the wealth and prosperity of this country. If we are going to have increased allocations of water, we can take advantage of the export opportunities that are ahead for this nation. They are all related. You cannot separate the two.

The water allocations and the need for that water are at risk because of an outrageous scare campaign that we are seeing from the unions. It is absolutely outrageous. I would have hoped that more members from the opposition would have stood up in this parliament to talk about the export opportunities that we have in the Murray-Darling Basin and talk about the importance of having the water allocations for those farmers and those growers—because that is where the future prosperity of this nation lies. But, instead, we have simply seen a disgraceful scare campaign that puts at risk those export opportunities for those growers who need that water in the Murray-Darling Basin. That is what we are seeing.

It is a shameful part of our politics in Australia today that we cannot get bipartisan support for this. I would have thought that good members on the other side of the parliament—such as the member for Fraser—would have given this bipartisan support. I am sure he understands the importance of getting this free trade agreement through so that we can give opportunities to these growers. With that, I commend this bill to the House, but I would finally say in conclusion—

Dr Leigh interjecting—

I know the member for Fraser might think this is funny and that this is a joke. But, for those Australians who are out there working long hours on the land—from sunrise to sunset—and are relying on this parliament to do the right thing by them and to open up those opportunities, I call on members of the opposition to have a thought for them and to do the right thing and get behind not only this legislation but also the China free trade agreement.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Mr Deputy Speaker Mitchell, on this day I would, first of all, like to preface my remarks on the Water Amendment Bill 2015 by wishing you a very happy birthday.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Thank you very much.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

I am sure it will be a very happy day for you and for many of the people we represent in this place when this bill has clear passage through both houses of parliament—and I am pleased to hear comment from the other side of the House to that effect.

This bill proposes to cap water buybacks at 1,500 gigalitres and secure a triple bottom line outcome for communities, economies and the environment. Representing almost the entire Murray-Darling Basin watershed in Queensland in this place—with all but the little region around Groom, near Toowoomba, contained within the Maranoa electorate—I have long argued the fact that we talk so often about the Murray-Darling Basin system and yet I see them as two systems. To look at it as one system is wrong.

Part of the Darling system ultimately ends up contributing a long, long way down the Darling into the Murray system. The Murray system, as I like to refer to it, is below the Lachlan and Menindee Lakes. Much of that water is contained in a more European-type climate—more reliable rainfall events, much of it stored from melting snow over winter. However, in my electorate, in the Darling system, it has an irregular rainfall pattern of high-rainfall averages of up to 28 inches per year on the old scale with the Carnarvon Ranges feeding the Warrego and parts of the Condamine system. It flows down through average rainfall areas of nine and 10 inches per year, yet still within the one system—you might say the one ecosystem.

These rainfall events are often of high intensity but very irregular in nature. We need to keep that in mind when we think about the reform of the Murray-Darling Basin water plan—and that is why I am pleased to have been briefed recently on the northern review, which is still underway, that looks at the allocations and what further buybacks may be required to meet the targets that have been suggested as part of the plan.

Water buybacks have already occurred in the Murray-Darling system in my electorate, particularly in the Lower Balonne. Those water buybacks have inflicted damage on local economies that do not have the capacity to create jobs that have been lost as a result of the loss of the water that has been bought by the Environmental Water Holder—the Commonwealth in this case. I particularly witness the towns of Dirranbandi and St George. I say to all of us in this place—and I bring this comment in good faith—we have got to think much smarter about how some of the targets that are still required in the Condamine-Balonne system can be achieved without inflicting further damage on this part of my electorate, because water for those communities is wealth; water creates jobs.

The buyback, which was from water below Dirranbandi, meant the loss of jobs in St George for the crop sprayers; people who were providing the agricultural herbicides, pesticides and materials; and those families who once had jobs on those properties as contractors are no longer there. Sadly, while there is an ongoing process of how some of that money could be going towards Healthy HeadWaters or compensation, I say it has been done in reverse. We should have had a situation where, before an allocation was purchased to meet these targets and the 1500 gigalitre target over time, the community had a plan and funding coming from the Commonwealth under the Healthy HeadWaters program to ensure that any potential job or business losses could be replaced with an alternative that would be sustainable into the long term.

I raise that, because that is my job in this place. That is what the people in the Lower Balonne, the Condamine-Balonne and the RiverSmart organisation tell me. It has been my backyard all my life, and I have worked and lived long enough in the area to know what water means to a community—that is, water security. If you are going to invest hundreds of millions of dollars, and irrigators do, in developing opportunities—whether it is in broadacre cotton or high-value horticultural crops—and they apply for loans, they need the security of the water to go to their banks. Whilst many of them have had to deal day to day with this year by year, they are right now reform fatigued. This has been going on since when John Howard was Prime Minister and John Anderson was Deputy Prime Minister. We started the process of reform to ensure that we could get sustainability in the whole of the Murray-Darling system. I agreed with it—and I know we have some bipartisan support for the process now.

As I know the member for Riverina would be aware, one of the original plans under the previous government came forward and bought people out in their hundreds of thousands—not only from the land and its irrigators but also small businesses who know what water and the security of water means to their towns and their future.

While I support the process at this stage, there is more work to be done in relation to the Lower Balonne. I say thank you to the parliamentary secretary, who has visited the area. He has taken the time to be there, as have some of the departmental people, and visit on-farm works. He has seen some of the work that Healthy HeadWaters has done to bring greater water efficiency and deliver a triple bottom line not only buying water back but storing it or utilising it more efficiently. They are great stories, and that is where the focus should be now in relation to any further buybacks: how we will do it more efficiently without the loss of jobs and how we will deliver a triple bottom line.

I also want to touch on a river that often does not get much comment in relation to the Murray-Darling Basin reform plan. It sits within the northern basin: the Warrego River. We often think of the Warrego River as the river that comes down from the Carnarvon Ranges through Charleville and Cunnamulla, and enters the Darling just below Bourke. When the big floods come through, they come through 30, 40 and 50 kilometres wide; however, as I said earlier, they are very irregular but are of high intensity when they occur. There are allocations on the Warrego River that exist right now where there is cotton being grown at Cunnamulla—once again, creating jobs; water is wealth; wealth creates jobs. It has suffered drought, commodity downturn, structural adjustments, a corrupted well market and all sorts of events that have impacted it and other remote communities; and, more sadly, in the last 20 years, the very loss of the wool industry and what that meant to those towns.

But water can replace some of those jobs if there is security, if there is an ability for those who have those allocations to borrow and know they can do it with confidence and without a government some time in the future wanting to remove or reduce that allocation which delivers the opportunity for them to invest and grow crops. What is happening there now is that there have been high-value horticultural crops grown with some of the water allocation out of the Warrego table grapes. They have been finding it increasingly difficult to remain competitive with those growing table grapes in northern Australia, particularly in Central Queensland, because their table grapes hit the Christmas market earlier than those around Cunnamulla. Once again, it is typical of agriculture. You have to be flexible and be able to move into other industries, not remain locked into something as if it will always be there as the only opportunity in that use of the land.

The people who are growing cotton there have said to me that they would like to participate in the Healthy HeadWaters program. It has not been on the radar or out there as a participants in the Healthy HeadWaters program. I understand there is not a great deal of water that needs to be recovered in relation to the health of the Warrego River, but nevertheless I call on our government and have spoken with the parliamentary secretary and the Northern Review Committee on this very subject. The Warrego, as limited as the water there could be recovered—and it may be only a small quantum in relation to the total amount—has a great opportunity to invest in Healthy HeadWaters that will deliver a triple bottom line to those irrigators, few as they are, at Cunnamulla and perhaps as far up on the Warrego, if there could be some trading upstream to create new opportunities, as Wyandra or perhaps even Charleville.

I put that on the Hansard today because I have spoken once again with the people there and have had correspondence with the people there. They would like to participate and they, just as much as any other producer or irrigator across the Murray-Darling Basin, where they have had an opportunity have taken it up. Others have decided not to take up the opportunity of Healthy HeadWaters. Some have exited and sold their water entitlement completely, but that is where I spoke a bit earlier of the impact that that can have in relation to Dirranbandi and the impact that has had on the towns of Dirranbandi and St George. So I throw that on the table for the minister and the parliamentary secretary so the northern review process, which is still underway, can include the Warrego and provide an opportunity for those on the Warrego who have entitlements to deal with that under the Healthy HeadWaters program, which could bring a triple bottom line and contribute to what the government seeks to do in a bipartisan way in this chamber to deliver a sustainable Murray-Darling Basin river system.

In conclusion, whilst we talk about the Murray-Darling Basin system in terms of overland flows, there is also an issue of groundwater buybacks on the inter Darling Downs. One of the things that some have been looking at in relation to the sustainability of the underground water that they use for their irrigation is once again the whole issue of security and knowing that there is not going to be change after change after change as has happened in the last 10 to 15 years. They need security and they need certainty. They, like so many of the producers and irrigators across my electorate, are prepared to work with the government, but they also want their voice to be heard. I have to say these people in irrigation are not out there to destroy the environment; they are there to work with the government. They are there to work with the authorities. They are there to work with the review process. But they really want their knowledge and their understanding, which often dates back generations—the knowledge of the river system, the flow systems, where water will flow. It is quite different to understand what it is like living in Dirranbandi, Goondiwindi or Cunnamulla and understand intimately—because it has been your life—the river flows and the irregular nature of the seasons. To look at a desktop model here in Canberra about wanting a certain amount of water and how we can get it—I know there is a lot of science behind it, but let's make sure the knowledge of those who have been out there as irrigators, as families, as small businesses for decades and decades is taken on board and fed into the system, particularly in relation to the Darling system in my electorate, which is so fundamentally different from the Murray system below Menindee Lakes and the Lachlan.

I support the bill and hope those comments can be taken on board by the minister. I look forward to continuing to work with the minister on this issue.

Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

I am pleased to speak today on the Water Amendment Bill 2015, the main purpose of which is to impose a statutory limit of 1,500 gigalitres on Commonwealth surface water purchases—otherwise known as buybacks—across the Murray-Darling Basin. This bill, its history, its future and indeed the future of all water policy in the parliament are very important to me as the member for Farrer in so much of the Murray-Darling Basin. I represent a large portion of the New South Wales Murray River and a large portion of the Darling River, and for all of the time that I have been a local member water has been the No. 1 issue for me. Whenever the inflows into the system reduce or there are changes in government policy, there is a response, and that response is often powerful and passionate. It always reflects one thing: the determination of the communities that I represent to continue to farm, to continue to be users of water and growers of food, and to represent and fight for irrigated agriculture. It is something that I have always done. I know it is something the member for Riverina, sitting here next to me, has always done. I know it is something that we will both always do in our respective electorates. This bill has quite a bit of history attached to our time in opposition and my time when the Water Amendment (Water for the Environment Special Account) Bill 2012 was introduced. At the time, a lot of conversations were had between members of the then opposition, and I advocated very strongly for a cap on buyback because we had seen the non-strategic, non-targeted buyback by the Labor Party and the effect it had had on basin communities. That is the main subject for discussion today in this bill, and it is important to reflect on what Labor's policy did to the communities that I represent. It divided communities; it tore communities apart. Effectively, it said: 'Here are government dollars to buy your water to take you out of production. It doesn't matter where you are; it doesn't matter what you are doing; it doesn't matter what your own investment on-farm has been.' And you, as the farmer, were then always under pressure during times of drought—which we were in—from your bank, from your lender. They would say: 'Suddenly your balance sheet has been transformed with this asset that is water. We'd like you to sell it, and we'd like the money so you can pay off debt. And that's all right, because you can still carry on your farming enterprise. Perhaps you can go to dry land; perhaps you can buy temporary water. But overwhelmingly, this is money that you owe.' The effect of this on agriculture and on communities was devastating, because there was no pattern. Many people came to me at the time and said: 'If the government had said, "We want this much water—let's work with you on how we strategically obtain it," then of course we would have been very unhappy about that, but we would have worked with the government.' But instead the Labor Party in government just said, 'There's the tender—go for it.' And communities were crippled as a result.

Going back to the Water Amendment (Water for the Environment Special Account) Bill 2012 and leading up to its introduction into the House, the conversations I had with my colleagues and with the now Prime Minister were around: 'Let's fix this buyback issue so that future governments can put some confidence into basin communities.' In part, I explained what we would do in my remarks at that time. I said:

We will also move an amendment that says that expenditure on farm infrastructure works cannot be used for buybacks, and the total amount of buybacks will be capped at 1,500 gigalitres. That means that the gap that exists between the water that is being bought back now and 2,100 gigalitres, which is a baseline figure that people will, reluctantly, as a second-best solution, accept, is all that can be bought in a market buyback. We will cap the total amount of buybacks at 1,500 gigalitres and we will require that actions to remove constraints and those needed to achieve this potential 450 gigalitres—

that, of course, was the constraint strategy—

recovered under this account must satisfy an improved or a neutral socioeconomic test—in other words, no socioeconomic disadvantage.

They were my remarks then, and I am very proud that the amendment I foreshadowed three years ago is coming to fruition in the House today in this current amendment to the Water Act.

Every season is different in the Murray-Darling Basin, and this season is not shaping up to be a great one. So I am grateful that this buyback legislation is here, and I urge my colleagues in the Senate to pass it. I commend the work of the parliamentary secretary in advocating the necessity of passing this bill in the Senate and, obviously, I look forward to hearing Labor's position, having no idea what that might be.

In being here today to talk about the Water Amendment Bill 2015 and its importance and, again, the underpinning of confidence in irrigated agriculture that I know that it presents, I will make a couple of further remarks. Firstly, we have had an independent review of the Water Act. It was conducted in 2014 and the final report was published in November 2014. In relation to the issue of a cap on water buybacks, the report notes that a number of submissions raised the commitment made by the Australian government in the 2014-15 budget to limit water purchases to 1,500 gigalitres and suggested that this limit should be legislated in the act. Other submissions indicated a concern that the 1,500 gigalitre cap could impede the Australian government's ability to bridge the gap. The panel noted that it is a decision for the Australian government as to whether this commitment should be legislated. We resisted those who said otherwise, and here it is. I also note, as does the Bills Digest on this measure, that the Department of the Environment website indicates that the government is still considering its response to the recommendations of the review. I know that further legislation is expected, and indeed is listed, for introduction in the 2015 spring parliamentary sittings. There is more, I believe, that needs to be done and that my communities believe needs to be done. I want to mention that this bill today is putting in place this buyback cap, but more can still be done.

The history of why we have a Murray-Darling Basin Plan is well known, and I think it is understood that we recognise that the basin is the lifeblood of so many communities. It is the food bowl of our nation. We need to use its resources sustainably to ensure the survival and prosperity of the environment for future generations. This plan is about governments working with the people of the basin to make sure that our farmers and communities are viable and sustainable for the long term. Our government's key difference in approach—I have reflected on the cap, which is something Labor would never have done—is that investment infrastructure is our primary method for recovering water to improve the basin environment. We have already secured over two-thirds of the 2,750 gigalitres of surface water we need to meet the sustainable diversion limits in the basin plan, and the cap we are introducing today is not a target, but a cap. It is a ceiling—a limit set in legislation. We will stand by it and we will continue to prioritise funding that invests in our community's future.

There have been many concerns expressed by speakers today, and that is appropriate. The circumstances in the New South Wales Murray, particularly around the towns of Deniliquin, Barham, Wakool, Finley, Jerilderie and Berrigan on the New South Wales side of the border, are not particularly happy ones at the moment. Very strong statements have been made to me over the last couple of weeks. I am pleased that I have taken those statements and the distress that many farmers are feeling right here, right now, to both the parliamentary secretary and the Minister for the Environment, and I thank them for the very understanding hearing which I have been given and their undertaking to continue to focus on what more can be done.

It is interesting. As I said, I have talked about an area in the New South Wales Murray—and time will not permit me to talk more about the Menindee Lakes and the lower Darling, important though they are—because there is, I think, something of a crisis in the New South Wales Murray when it comes to water allocations. The opening general security allocation for the season at the moment is zero. The planes are waiting on the tarmac to sow rice. The farmers are anxious and waiting for an allocation that allows them to start their program for spring and summer, but, with a zero allocation, that is not possible. Farmers are calling me and saying, 'We don't understand why, with such large reserves of environmental water in the dams and storages in the upper Murray, our allocation is zero. While we recognise that "general security" means just that—you can't guarantee the amount of water you'll get—can we be certain that the Environmental Watering Plan is working?'

This is a big project. It is a project that needs strong, focused explanation to the people of the basin. I know, and it is often said, that farmers are environmentalists. Of course they are. When they see environmental water being used to good effect and they see a positive return for the environment where they are, they give that a tick. They understand that. When they are not so certain about the watering in a particular area or they hear—and often it is anecdotal, I know—feedback that says it has happened but it is not really working, they quite rightly get angry and upset. We therefore need to make sure that not only do we have a meaningful Environmental Watering Plan but we have a strong engagement with communities, a focus on how that plan should look and a reflection back from communities about how it might be changed to ameliorate local effects and about what local people actually think of it.

I have met the Commonwealth Environmental Water Holder, a gentleman called David Papps. I have had some really good conversations with him. I know that he was in Deniliquin, in my electorate, yesterday. I look forward to him being part of that ongoing explanation, and I recognise too that he is constrained by the Water Act.

We probably do need more. We need something that allows communities who are starting the season with a zero per cent allocation but who by the good graces of government have significant infrastructure investment, both on and off farm, to be able to use water. The other thing that has been explained to me and that I have seen since the plan started to take effect a few years ago is the temporary water market. I mentioned previously how you might sell your permanent water. You might pay off debt. You still have your land and you still have your farm; you can buy water and grow crops. In theory that would be really good, except that the price of temporary water is so high at the moment that, when you do the sums, you actually would not do that at all. You might do nothing. Is the market working effectively? I am not sure that it is working as effectively as it needs to, and I know that there are adjustments that will need to happen as this very big, comprehensive, ambitious Murray-Darling Basin Plan happens. But I also want to make very clear that the local concerns that I am hearing are demonstrating a strong level of unhappiness.

On Friday I am going to bring Neil Andrew, a really good person—I am delighted that he is now Chair of the Murray-Darling Basin Authority—to these areas to have a look. We will go down the Edward-Wakool system. We will talk to landholders. We will meet landholders, and we will receive the explanations that I know people want to give to the authority.

There were some comments by an Italian fruit grower in Menindee recently mentioned in the Barrier Daily Truthand, as I said, I have no time to talk about Menindee, but I would love to do that another time. He talked about all of his fruit-growing years in Menindee and looked back with happiness on what life had given him. He said: 'Some years the water was there; some years the water wasn't. When the water comes down from Queensland, everyone is happy. When the water doesn't, everyone is a traitor.' I think that picks up the real difficulty of managing so many diverse interests across an area as wide as that of the Murray-Darling Basin Plan. But I want to end where I began and say that I believe passionately in the rights of those who have irrigated agriculture enterprises to continue to farm, to continue to grow food, to continue to be prosperous and to continue to be happy.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

I am delighted to thank all of the honourable members who have contributed to the debate on the Water Amendment Bill 2015. To that effect, I table the replacement explanatory memorandum for the bill.

Let me begin by making the broad point that in March of this year we announced that we would enshrine in legislation our election commitment to capping surface water purchases in the Murray-Darling Basin at 1,500 gigalitres. In keeping with that commitment, we introduced the Water Amendment Bill in May and have consulted with communities and affected parties and with the states since that time. The passage of this bill, House and Senate willing, will therefore be a significant milestone in our journey to reform and to protect the Murray-Darling Basin and to provide security for farming communities, regional communities, the environment and general water use.

Against that background I want to particularly acknowledge and thank my parliamentary secretary, the member for Paterson, for his outstanding work to date. I also want to especially acknowledge the two members at the table now, the member for Riverina and the member for Farrer, for their contribution to this bill and to the cap as well as other members in this chamber—the members for Murray, for Parkes, for Mallee, for Barker, for Calare and for New England—who have worked assiduously on behalf of their communities to ensure that there is security for their community, security for the river and security for farming activities, because at the end of the day this bill and the broader Murray-Darling Basin Plan are about ensuring that we have stability, security, a great environmental outcome and, above all else, the ability for communities to plan and operate on a long-term basis with regard to both water for critical human needs and water for the critical task of providing agricultural security as well as environmental security over the coming decades.

The Murray-Darling Basin Plan therefore represents the culmination of more than two decades of water reform, two decades mostly of bipartisanship, which I would say has been led by the coalition and championed by people such as John Anderson, Mark Vaile, John Howard and Malcolm Turnbull. I know that the defining task of my first term in this place was to work towards precisely this water reform, and there have been two decades of cooperation between all basin governments. This bipartisan support and ongoing cooperation between basin governments is essential for the implementation of the Basin Plan and for bringing the security for the river and for the farm and agricultural community which is the cornerstone of this legislation.

The Australian government is therefore committed fundamentally and absolutely to implementing the Basin Plan on time, in full and on budget but, most importantly, with the triple-bottom-line focus that supports and maintains healthy, viable communities, the environment and agriculture for the future. The Basin Plan sets out a water recovery target of 2,750 gigalitres across the basin. The plan also includes a mechanism to allow the sustainable diversion limit to be changed up or down by five per cent, provided that economic, social and environmental outcomes are maintained or improved. Successive governments have committed to bridge the gap to the sustainable diversion limits through a mix of investments in irrigation, infrastructure upgrades and water purchase. I know from my time as parliamentary secretary that our goal subsequently became—and this is something which I have absolutely supported—to ensure that we are replumbing rural Australia rather than engaging in a buyout of rural and regional Australia. If we can improve productivity, if we can improve water efficiency, then we are laying the dual foundation for the protection of the river and the sustainable agricultural production and improvement of that productivity in the basin for the next 100 years.

This bill therefore legislates the government's commitment to bridge the gap in a way that provides certainty for basin communities and industries, while optimising economic, social and environmental outcomes. It does so by legislating our commitment to prioritise, as I have said, investment in infrastructure by placing a 1,500-gigalitre limit on surface water purchases in the basin. The Australian government, as part of this broad national plan, has committed more than $12 billion to implement the Basin Plan through a range of programs in the basin through to 2024. As part of this grand strategic plan which is actually being implemented on the ground each and every day, the Australian government is investing $2½ million on average every single day from now through to June 2019 in water infrastructure, infrastructure which I have myself been fortunate enough to see in places such as Mildura, where you can witness the transformation of open, leaky earthen channels into closed pipes, which save enormous volumes of water and increase the security for farmers.

This legislation before us today firmly cements, therefore, the coalition's commitment to investment in productive agriculture, particularly through our on-farm and off-farm infrastructure investment programs. It must be remembered that the 1,500-gigalitre limit is not a target. It is a ceiling, and I repeat that for the purpose of the communities up and down the basin. The Australian government's obligation to comply with the 1,500-gigalitre limit will not override or reduce its obligations to manage the reductions to the sustainable diversion limits. This is because both of these obligations will be required under the Water Act itself. Not only does the government have an existing statutory commitment to manage the reduction to the sustainable diversion limits, but we have made good progress, and I repeat and report that to the Parliament of Australia. As at 31 July 2015, 1,952.9 gigalitres has already been recovered towards the overall 2,750-gigalitre recovery target under the Basin Plan. This leaves a remaining recovery task of around 797 gigalitres. Of the total 1,952.9 gigalitres recovered to date, 1,164.6 gigalitres has been purchased, leaving 335.4 gigalitres of 'headroom' before the 1,500-gigalitre limit will be reached. But I make this statement clearly and consciously: our aim is to do this without reaching the cap, and the recent stocktake gives increased confidence to this effect.

Therefore, I also want to report to the House that the independent SDL adjustment mechanism stocktake report released on 27 August provides just this further confidence that the Basin Plan gap can be bridged without reaching the 1,500-gigalitre limit. We will obviously keep this under review, but the recent news is good news. The stocktake found that a supply contribution of 508 gigalitres is plausible and basin ministers have committed to continue to work towards a total supply contribution, in fact, of up to 650 gigalitres. The greater the supply contribution from the adjustment mechanism, the smaller the remaining water recovery task to implement the Basin Plan.

In completing this remaining water recovery task, the government is focused on supporting industry efforts to modernise irrigation infrastructure, saving water that helps ensure the health of the environment and the wellbeing of communities throughout the region. We know that upgrades to irrigation infrastructure improve on-farm water efficiency and productivity and deliver triple bottom line outcomes for rural communities, economies and the environment. Where we can be engaged in the great task of replumbing rural Australia for greater productivity as opposed to buybacks, we will be and we should be.

I now turn to the Senate Environment and Communications Legislation Committee report into the provisions of the Water Amendment Bill 2015. The explanatory memorandum, which I have just tabled, was revised to clarify issues raised by various stakeholders in their submissions and evidence to the committee. I thank the stakeholders, those that have made submissions and the committee for their report I know that the committee heard from a range of parties with a strong interest in the implementation of the Basin Plan and gave everyone a fair hearing.

There is a diversity of views on how to best implement the Basin Plan; there always will be. This is the history of riparian management, not just within Australia but within almost every jurisdiction in the world. Despite these different views, I know that we all agree on the importance of restoring Australia's largest and most productive river system to health. Real progress is being made. Fundamental progress is being made. The beneficiary is not just the river, not just the environment but also the agricultural community, which is fundamental to our economic production in Australia, but also our sense of national self and identity. We also recognise therefore that a healthy river is necessary to support our basin communities and associated industries, now and into the future.

I know that the committee heard from some groups that the bill could override the government's obligation to manage the reduction to the sustainable diversion limits. I would respectfully but categorically say this is not true. Our statutory responsibility to manage the Commonwealth's share of the reduction to the sustainable diversion limit is enshrined in the act itself. The government is managing this reduction by bridging the gap. The legislated limit confines one method available to the government to bridge the gap—surface water purchase—and does so in a way that is consistent with our water recovery strategy. We will reach our targets. The legislated 1,500 gigalitre limit deals with how the gap will be bridged, not whether the gap will be bridged. Our commitment is clear, our intention is absolute and our ability to reach that target is on track and will be delivered. The government is unwavering in its commitment to deliver the Basin Plan on time and in full and to do so by bridging the gap to the SDLs. The bill provides for the limit to be in place for the full term of this Basin Plan, delivering the certainty that is very much needed by the communities of the basin. This approach will also ensure that the benefits from ongoing investment in infrastructure based water recovery are continued and realised.

On the issue of how progress against the limit will be tracked, the Department of the Environment will ensure that all water recovery is very clearly, publicly and regularly reported, providing transparency on the purchases contributing to the 1,500 gigalitre limit.

This legislation delivers triple-bottom-line outcomes for the basin. To ensure the prosperous future of basin communities and businesses, we need to make certain that the health of the environment is sustainable for the long term. In turn, we also have to provide certainty to the community that, in recovering water for the environment, we will prioritise our investment in modernising irrigation infrastructure, ensuring this significant agricultural sector is efficient, productive and viable into the future. We are supporting the best farmers in the world.

The government is steadfast in its commitment to deliver the Basin Plan on time and in full and to do so in a way that optimises economic, social and environmental outcomes.

Ultimately, the bill reflects this commitment by: (1) continuing to work toward bridging the gap to the sustainable diversion limits in a way that minimises social and economic impacts; and (2) providing greater flexibility for the recovery of an additional 450 gigalitres of water in a way that maintains or improves social and economic outcomes.

The Abbott government welcomes the bipartisanship of the opposition and thanks the opposition for joining with us in supporting the communities of the Murray-Darling Basin through this bill. I particularly want to thank the parliamentary secretary, the Member for Paterson, for his leadership and work in driving this bill. He has reached a point of tremendous success in his career and he has done a tremendous job for the community and for the country.

Similarly I thank the passionate advocates for their communities, the basin members who have spoken unfailingly on behalf of their own towns, their own farmers, their own communities. These are the members for Farrer, Murray, Riverina, Parkes, Mallee, Barker, Calare and New England. I also want to thank the Commonwealth Environment Water Holder, the Murray-Darling Basin Authority and especially the outgoing CEO, Rhondda Dickson and the departmental leaders, David Parker, Tony Slatcher, Mary Colreavy and Bruce Mayall. With that, I commend the bill to the House.

Question agreed to.

Bill read a second time.