Wednesday, 30 May 2018
Water Amendment Bill 2018; Second Reading
I rise to speak on the Water Amendment Bill 2018. It's my pleasure in this debate to represent the constituents in my electorate of Farrer, who are primarily irrigators in the Murray River, the Murrumbidgee River and the Lower Darling.
It's very easy to talk about the basin plan from a distance away, and I understand that every Australian feels a sense of ownership, belonging and purpose when it comes to environmental water and, indeed, to the farmers who make their living, principally, from that environmental water. Few people have lived with this debate for as long as my constituents and those in the member for Murray's electorate, and I pick those two because I think it's fair to say we have been the most hurt, the most affected and, arguably, the most damaged by water policy that has failed us for so long.
But I am pleased that we have arrived where we are today, and I want to reflect the support of many of my constituents, the communities that rely on irrigation, for the agreement that the minister has made with the opposition to put the basin plan back on track—to deliver, principally, the SDL adjustment mechanism for the southern basin—and also to introduce a note of anxiety about what is commonly described as the '450 gigalitre up water'.
As the opposition spokesperson, the member for Watson, has mentioned many times, those two are inextricably linked, even though the 450 gigalitre up water was added to the basin plan in 2012. So there was a sense of concern about where this plan was heading. Then, when that measure was introduced, there was a sense of alarm. Some of that has abated, but we watch and note with interest. So that is the caution that I observe today, and I want to say that my communities are going to watch the implementation of the expressions of interest around the 450 gigalitres of additional water with great interest, and scrutinising that will be my job on their behalf.
As I said, this bill revisits the disallowance motion that was lodged in the Senate earlier this year. On 7 May, the coalition government reached the agreement, which we are supportive of, with the federal opposition, to deliver the basin plan in full and on time. The agreement will see the implementation of critical amendments arising from the sustainable diversion limit adjustment mechanism and the Northern Basin Review. It will provide certainty to irrigators, communities, investors and the environment alike, and it will allow those communities to look to the future.
As I travelled the electorate earlier this year and talked about the impending disallowance motion and what might happen, I think the most common piece of feedback—apart from the exhaustion that all of us reflect when we've debated water for so long, particularly those farmers who've lost water and are adjusting to a future with less water—was the uncertainty, which can cripple any investment program, particularly those as substantial as those for some of the farms in the Murray and Murrumbidgee valleys. The bill is a key, therefore, to unlocking millions of dollars of investment, not just to deliver those new environmental projects, important though they are, but to add value to the commodities that are now being grown very successfully. There are not just horticultural commodities, and rice, which we're used to. With the price of sheep and lambs where it is, people are actually growing pasture on irrigation, which I certainly haven't seen for many years. There is the introduction of cotton further and further south, with new plant breeding. The expansion of almonds, walnuts and hazelnuts, particularly in the Murrumbidgee, is very exciting.
The successful delivery of the SDL adjustment means that 605 gigalitres less water needs to be recovered from irrigators and communities without comprising basin plan environmental outcomes. As a result, the government has all but completed the task of water recovery in the southern basin. Unlike the opposition, we all stand behind no further buybacks—and that outcome comes as an enormous relief to the communities that I represent. The successful delivery of the amendment also opens the path to recovery of an additional 450 gigalitres, as I mentioned, to achieve enhanced environmental outcomes, with neutral or improved socio-economic outcomes through water efficiency projects.
So, in the southern Murray-Darling Basin, we know that the additional 450 gigalitres is essentially a task for us, and that's why we are so concerned about it. We know there's lots of language around the social and economic impacts, and we see that in the context of the Murray-Darling Basin's investigations, reports and deliberations over the years, which have demonstrated how much our communities have lost.
I don't like looking at agriculture in terms of what's lost; I prefer to look at what is gained. I would never talk these regions down. They do have a bright future. But they have lost a lot of water, and they have expected that that would be it.
So I just want to reflect on what those social and economic impacts have been. I know that you can put substantial dollar figures on these things, and what do they really mean? But I have looked at much of where this information has come from, and it has come from the authority itself. There has been an economic loss of $120 million at the farm gate—I'm talking about the Murray Valley—a 30 per cent decrease in rice production and a 21 per cent decrease in dairy. The average climatic scenario, which is the standard reference point, suggests that taking 20 per cent out of the consumptive pool through water buyback has led to an average increase in temporary allocation market prices of $70 a megalitre. This is close to doubling what would have been the market price, so, if you're buying water, that is an enormous impost. Reducing the size of the consumptive pool by 20 per cent increases prices in average seasons from $130 a meg to nearly $200 a meg. That increases the number of years when rice growers will sell rather than grow from seven years out of 20 to more than 10 years out of 20—I'll come back to that.
Murray Irrigation now delivers on average around 750 gigalitres a year compared with 1,350 gigalitres prior to the millennium drought—a huge drop in water to those farm producers. The decrease in farmgate production flows on to another $77 million loss in value-add and the loss of a total of 678 jobs, with 471 lost in the contraction of irrigation itself and a further 207 lost due to flow-on effects. This represents $21 million in lost salaries across the region. There have been population declines from 2001 to 2016 of 45.6 per cent in the Wakool community, 15.8 per cent in the Deniboota community, 32.5 per cent in the Denimein community, and 20.4 per cent in Berrigan and Finley.
I certainly have always pointed the finger at Labor for these dramatic socio-economic effects. Obviously they are not totally responsible. We in this parliament all had to take the steps that were necessary under the Basin Plan and the Water Act. But the way that the Labor Party recovered water through the horrendous Swiss cheese buyback and the disregard for the fabric of the community itself was really felt in some of the areas that I've just mentioned. As I've always said, if you have to recover this amount of water, why wouldn't you consult with the communities about the best way to go about it rather than launch the sorts of buybacks that perhaps created winners in some individuals—no communities, that's for sure—but created an awful lot of losers?
The problem with an approach where the government is paying for water is that you will have unwilling sellers but you will always have willing sellers, many of whom leave the district and therefore don't provide the jobs and the value-add. I'm concerned that with the price of temporary water as high as it is now and, indeed, the price of permanent water higher than it's ever been—we had a sale of permanent water at a water auction at the Riverina Field Days in Griffith recently, and it made $5,000, which is unheard of and, we suspect, is going to permanent plantings including walnuts or almonds; I think it was almonds—we're creating the haves and the have-notes when it comes to water. Those who have a permanent water entitlement can probably sit back every year and sell it, as some of the statistics I've indicated show, but those who have to buy it in every year are crippled by the uncertainty about the cost, the affordability and even whether they would enter the farm production process in the first place given the increase in those costs. I think that's actually been a ramification of the Basin Plan that no-one really expected. If I go back all those years to all those experts I talked to, I don't think any predicted that the price of temporary water would go as high as it has, and that does sound a note of real concern.
Just to finish with the 450 gigalitres of up water, as I said, it will be my job as the local member of the communities of Griffith, where they burned the Basin Plan, Deniliquin, where they're clearly more affected than anywhere else, and the Lower Darling, where viable, vibrant horticultural producers are looking at adjusting out so that further environmental flows can be delivered down the Darling river, to look very closely at any expression of interest that is released around the 450 gigalitres of up water to make sure that it isn't just about individuals but actually about communities, because if, in this process, we lose community trust then we really have failed. At many points along this road, we have lost community trust, but when I had the strong feedback from my constituents about the fact that the Basin Plan was back on track, and I heard the approval from both sides of parliament for that, I felt a sense of that community trust. As custodians of that we have to be really careful that we don't lose it again. If we launch any sort of approach into the basin that is seeking to capture water and tick a box that says 'socio and economic consultation and effects are neutral or positive' but they actually aren't really—if we do that and we don't do it well—then that trust will fall apart.
I am concerned that within the plan—and certainly intrinsically as part of the 450 gigalitres—there is a flow target at the South Australian border of 80,000 megalitres a day. Anyone anywhere in the southern basin, whether they are farmers or officials in the state or federal departments—perhaps I shouldn't say the federal department, but certainly the state department which is actually out on the basin understanding the day-to-day flow of the system—will tell you that that is completely impossible. We have to be pragmatic about this. If it can't be delivered, we have to acknowledge that it can't be delivered and South Australia has to acknowledge it can't be delivered. The opposition spokesperson on water has to acknowledge that it's unreasonable to place it there. If you have to deliver 80,000 megalitres at the South Australian border, what are you doing to the communities upstream to deliver it? How can you possibly push that water down a system with locks, weirs and the Barmah Choke—and even post the works that will be done at Menindee down the Lower Darling—and not sacrifice the farms and the communities upstream?
Effectively, the New South Wales government can't allow that to happen. The New South Wales government are the keepers of the final decisions on what projects happen on the ground. If there are genuine third-party impacts, they will wear them and they will be responsible. I know that as we get closer to this process from where we are now we will focus very much on what this actually means on the ground for riparian funding, for irrigator allocations, for the price of water and for the communities that depend so much on all of this.
I congratulate the minister for landing the deal that we were most worried about earlier on in the year. I congratulate too my constituents for coming on board and supporting all of us with a Basin Plan that looks to a brighter future.