Tuesday, 27 November 2012
Water Amendment (Water for the Environment Special Account) Bill 2012; Second Reading
It gives me great pleasure to speak on the Water Amendment (Water for the Environment Special Account) Bill 2012 because it allows the opposition to place on the record the background, the history and the reality behind the Murray-Darling Basin Plan and this current bill as proposed by the government. Let me begin with context. The House will, over the coming days, face two significant issues. One is the Murray-Darling Basin Plan, which has been a source of much debate and has been categorically mishandled by the government, in our judgement and in my view in particular. We will also face this complementary legislation with regard to the special account which will allow the government of the day to acquire and take steps to improve infrastructure in such a way that there are no additional buybacks to achieve on a voluntary basis between nought and 450 gigalitres of additional water. It is about giving government an option. It is, in our judgement, about categorically excluding additional buybacks as part of the special account. That is the government's apparently stated position. That is our categorical position, and it is what we will do in government. Those two issues are before the House.
The context is this. In January 2007, the Howard government laid on the table grand plans for reform of the Murray-Darling Basin in a way which had not been seen since Federation, but we did so from the position that we had to achieve fairness between upstream and downstream users. We also did so on the basis that we would allocate funds with an overwhelming focus on a once-in-a-century replumbing of rural Australia. In reality, that means sharing the benefits between farmers and the environment, between irrigators and the environment, between agriculture and the environment and, above all else, between communities and the environment. Our plan, our vision, our approach, our allocation and our commitment were to do so through upgrading on-farm infrastructure and general agricultural infrastructure in terms of the pipes, the channels, the transport mechanisms, between the river and the farm itself. Those were the two critical areas.
For five years, much of that work has been shamefully neglected by the government. This plan for a once-in-a-century replumbing which allowed us to produce food through greater efficiency, which allowed us to deliver to rural Australia a grand, once-in-a-century national efficiency dividend, has largely been ignored by the government. At the last minute, they have now apparently rediscovered the essential tenets of what was laid out in 2007 by John Howard, by Malcolm Turnbull and by the coalition. That in turn built on much of the work of John Anderson from an earlier period, something with which I am proud to say I had some very early involvement during the period of 2001 to 2004 and 2004 to 2007 in different ways. But that was always a plan based on funding upgrades of infrastructure, of piping, of channelling and of lining of dams, and improvement of irrigation approaches. Those are the things which we set in place, which we funded, the vast bulk of which has been sat upon.
That funding has not been used by the government for the purpose for which it was intended. Instead, we have seen a wholesale buyout of farms and farmers, of rural communities. Much of it has been non-strategic. Much of it has been buying for the sake of buying, and much of it has contributed to the great stress in rural Australia which has accompanied the formation of the Murray-Darling Basin Plan. Against that background, at the last minute, at the last second, the government has rediscovered infrastructure—on-farm infrastructure, interfarm infrastructure and now, I am pleased to say, something which we have advocated and I myself have been personally involved in, environmental infrastructure—as a means of making grand and significant savings without harming rural productivity.
Our approach to the Murray-Darling Basin and our approach to this legislation is very clear. Other than the remaining 249 gigalitres and other than the fact that all of this adds up to a maximum of 1,500 gigalitres of buyback, the time for buyback is finished. The time for infrastructure investment, for modernising our farms, for giving farmers the opportunity to be efficient and for sharing the benefits, where there is public investment for public benefit, is upon us. It is sad that this government, which had made major commitments at a much earlier time, has failed to deliver. The upgrade of the Menindee Lakes, which has been promised at successive elections and which will no doubt be promised again, is an example of work promised and not delivered. Those promises, Minister, were express, clear, absolute, in writing and undelivered. There is no question about that. This government embarked upon a wholesale buyback, a wholesale buyout of rural capacity, and it is only now that the recognition has arrived that the right way forward is through the once-in-a-century replumbing of rural Australia, which we always intended as the heart, the soul, the essence of any fair Basin Plan.
We have made it clear that we will look at this Basin Plan and accept it and support it. I recognise that there are some who may not be in a position to do that because they have their concerns, and I am deeply respectful of that. But as a coalition our view is very clear that this plan has finally, belatedly, after five years, adopted the critical elements which we believe are necessary to ensure that there is long-term sustainability both of our farms and our farming and rural communities and of the river and the downstream communities. We also—this brings me to this legislation—are willing to be supportive, but there are some critical amendments which are fundamental.
Let me go specifically to the Water Amendment (Water for the Environment Special Account) Bill 2012. This bill establishes a special account to acquire additional environmental water for the Murray-Darling. The Prime Minister and the Minister for Sustainability, Environment, Water, Population and Communities, who is at the table, announced this bill in Adelaide, with a promise that it would recover up to an additional 450 gigalitres of water for the environment. They gave a commitment that water would only be recovered in an economically neutral way via 'on farm infrastructure projects'. We intend to hold them to account on that.
Under the plan—the broader Murray-Darling Basin Plan—2,750 gigalitres would be returned to the environment. That is the process which we envisaged, which we imagined, which we began but which we always planned against the constraint of protecting upstream communities and downstream communities and doing it overwhelmingly through funded infrastructure where the benefits were shared. The parliament has now passed a bill to allow that figure to adjust up or down by a total of 710 gigalitres if certain criteria are met, and this particular bill seeks to put aside money to pay for additional water to allow the 2,750 gigalitres to increase by up 450 gigalitres. The bill appropriates $1.77 billion until 2024. Only $55 million is included in the forward estimates. So, as is usually the case, it is a sleight of hand. Three per cent of the required funds appear in the forward estimates, in the budgetary life of this government. The rest are for future governments to find. The government are accountable for three per cent and they leave the bill for others. Yes, they allocate it by law, but it is always another government at another time in another place that has to find the money. So it is effectively a blank cheque they have written, but they have done it again with a sleight of hand—$55 million out of $1.77 billion is allocated during the forward estimates period, during the accountable period for which this government is responsible. That adds up to three per cent. That is what has been actually funded in the life of this government's budgetary cycle.
As we go forward, we support the use of on farm infrastructure as a genuine means of making progress. We support steps which will not weaken social or economic living standards and will not cause social or economic detriment. The challenge here is that we wish to know whether the physical constraints will be met. There is a small amount of money to try to alter the height of bridges. We have our doubts—deep doubts—as to whether that is legitimate and reasonable and realistic. Having lived through the pink batts program, the green loans program and the phantom credits program, and having seen the citizens assembly and cash for clunkers promised, I know that their record of making grand environmental promises and not delivering is almost perfect.
So let us note this: there are real constraints. Delivering more than 2,750 gigalitres of water to the environment undoubtedly requires removing a number of physical constraints in the system. Whether that is lifting bridges, whether that is moving roads, whether that is easements on private land or whether that is changing water operation rules, the government has to indicate how it realistically believes that can be achieved through the amount which they have allocated. I doubt that they can do it.
One example is that flows between the Hume dam and the Yarrawonga weir, which I know well from my own history, are limited to a maximum of 25,000 megalitres per day. We are advised that lifting the water recovery target to 3,200 gigalitres would require flows of 40,000 megalitres per day. So, against that background, there are some significant issues for the government to address.
In particular, we want to ensure that there is deep, strong protection against social and economic detriment. The government has said that it would only recover more water in ways that are neutral in social or economic terms, but these commitments are not in the bill. They are not express, they are not clear, they are not absolute and they are not adequate. Our report in the Senate makes that point clear, and, having studied this myself, I also believe that there are critical amendments which we will have to make.
The other critical element is about restricting further buybacks. Labor has spent $2 billion on water buybacks, yet only $500 million on infrastructure projects that can deliver water back to the basin—$4 on buybacks for every $1 on infrastructure. Our approach was precisely the opposite—$4 on infrastructure for every $1 on buybacks. They have reversed the order of things for ideological reasons and only now, after five years, have they discovered that the right way forward is to increase productivity rather than reduce production in the Murray-Darling Basin. I am advised that, as at the end of May 2012, the government had spent just 15 per cent of the $4.6 billion allocated toward projects to deliver water into the basin.
I also, as I mentioned at the outset, want to give the example of the Menindee Lakes. And I note that the minister looked quizzical at first, but the government promised $400 million for the Menindee Lakes in 2007. It made another promise in 2010. Five years later, and the best advice we have is that just $21 million has been spent on re-engineering the Menindee Lakes, which have a potential of up to 100 gigalitres a year of savings which could be shared with the river and done so in a way which would reduce the loss of water through evaporation. All of the $21 million has been spent of different consulting and other reports. Not a single drop of water, to the best of our knowledge, to the best of our ability, to the best of our awareness, has actually been saved. After five years and a pledge of $400 million, there has been a failure to deliver real infrastructure and real water savings.
I now want to foreshadow the coalition's amendments ahead of the steps to be taken during the consideration in detail stage. We will make some critical amendments, and they are in two fundamental areas. The first is that we will seek to remove the ability to use the funds in the special account to purchase water access rights. That is entirely consistent with what the government has pledged and promised, and with what the Prime Minister and the minister have said. The government has argued that this special account is not about water buybacks but is about achieving water recovery through on-farm efficiency upgrades. Indeed, in announcing this special account, the minister at the table stated that:
Now, the extra 450 gigalitres is acquired through the sorts of on-farm infrastructure projects that we've run to date.
The only problem with that, of course, is that there have been very few real on-farm infrastructure projects, as opposed to what we had always envisaged. The amendment from the coalition will ensure that this commitment to end the buybacks for the remaining additional water is reflected in this legislation. We also expect that the government will resist the pressure from the Senate to make it mandatory. This is a voluntary program that the Senate recommended, headed by one of the government's own senators, be a mandatory program to achieve exactly 450 gigalitres of additional water, not anywhere between nought and 450. I would ask the minister, in good faith, to acknowledge that. The government say that their ability to purchase water rights will only be used when related to improving water efficiency on farms. They are effectively saying 'trust us', even though there is not much trust, given the record to date. We will put that trust to the test of legislation.
There are a second series of amendments which we wish to make. These amendments clarify that any water recovered through this fund is only to be recovered in a way which is neutral or beneficial with regard to socioeconomic outcomes, and we do this through three steps in terms of the package of amendments. Firstly, our amendments will insert into the objects of the bill that neutral or beneficial socioeconomic outcomes must be achieved. Secondly, our amendments will limit the amount of water that can be bought back in total, in globo, in absolute figures, to 1,500 gigalitres across the entire plan, consistent with the government's announced water recovery strategy. I want to particularly pay tribute to the member for Farrer, Susan Ley, for this amendment. She has fought for a 1,500 gigalitre cap, supported by other members of the coalition, namely the members for Murray, for Mallee and for Riverina. However, this 1,500 gigalitre cap, which we seek on total buybacks, is the member for Farrer's work, and she should be acknowledged for that. Thirdly, our amendments will require that the secretary of the department report on how any water recovered achieves a neutral or beneficial socioeconomic outcome in the annual report required under this bill.
Let us be very clear, our intention is to accept this bill and our commitment is to support the Murray-Darling Basin Plan. But our commitment in government, if we are elected and if these amendments are not passed, is to ensure that there is the exclusion of buybacks for any part of the additional 450 gigalitres. Our commitment in government, if elected, will be to ensure that there is a neutral or beneficial socioeconomic outcome from any attempt to achieve the 450 gigalitres or any part of that. Our commitment in government will be to put in place an absolute cap of 1,500 gigalitres on buybacks, consistent with the government's announced water recovery strategy. Those amendments are what we will seek now, and they are absolutely the commitment as to what we will do in government.
In summary, we have approached this through a position of good faith. The plan which was placed before the parliament yesterday is radically different from what was placed on the table shortly after the election. That is a tribute to the work of many members of the coalition and, to the extent that the government has accepted those elements, that is appreciated. Senator Joyce, Senator Birmingham and the four members whom I have noted previously have all played a critical role in achieving those changes. The plan for Australia going forward should be a once in a century replumbing of rural Australia, not a buy-out of our farms and our farmers which is what we have seen to date. Having said that, our amendments are on the table. They are about protecting upstream communities whilst guaranteeing downstream communities real access to sustainable flows over the coming century. For those reasons we seek not to oppose this bill and we support the Murray-Darling Basin Plan, but we expect that the government will treat our amendments in good faith.
I take this opportunity to speak in support of the Water Amendment (Water for the Environment Special Account) Bill 2012 that is currently before the House. I understand that yesterday the minister who is in the chamber here tonight tabled the Murray-Darling Basin Plan in this place. The tabling of that plan saw the culmination of a very long, difficult and exhaustive process that began about five years ago when this government came to office in November 2007—a process that has two very important outcomes. Firstly, it provides a high level of certainty for Murray-Darling Basin communities and for the environment within the Murray-Darling Basin area. Secondly, it transfers responsibility for basin communities, and the environment therein, from the states to the federal government. It effectively overcomes 100 years of bickering and disputes between the states, and it was a Labor government that finally brought that together. It was the minister who sits in the House before us tonight who did that. It was not members opposite, as the previous speaker would have you believe, who should get the credit for what is before us tonight. It is the minister who sits at the table who has worked through this process from day one and who has finally delivered something that we can put to the parliament that both is credible and will provide the certainty that I referred to. It is indeed an historic moment for Australia as a whole to have reached this point, and it is an historic moment in terms of water reform within this country.
Having tabled the plan, I understand that it may be disallowed by the parliament if members in this place choose to take that position and move a disallowance motion. We were told by the minister today in question time that the Greens have already lodged a disallowance motion in the Senate. I find that incredibly disappointing. I find it disappointing because if the plan is rejected we then have nothing and we go back to where we started from, and that is the uncertainty that we face until this plan gets through parliament. There will be no certainty for communities within the Murray-Darling Basin, no certainty for the growers and irrigators who rely on the waters from the Murray-Darling system, and no certainty for the environment. I say to members in this place, and to any members in the other place who might be taking note of this debate, surely the plan that is currently before the parliament is better than what we have, because what we have is effectively nothing.
For South Australia, transferring responsibility from the states to the federal government and having a basin-wide plan is important because South Australia, being at the end of the system, is very much reliant on the goodwill of the upstream states. As we have seen in the past, when the water system diminishes so does that goodwill. The basin plan sets a long-term average sustainable diversion limit reduction of 2,750 gigalitres. The government has committed to acquiring an additional 450 gigalitres in permanent environmental water entitlements and an easing of flow restrictions. For South Australia and for the environment that is a much welcomed additional commitment by the federal government because it means a lot for South Australia. For South Australia it means more water for environmental assets, including the iconic wetlands and river red gums along the system within South Australia. For South Australia it means more water for the Lower Lakes. It means lower salinity levels in the Lower Lakes. It means lower salinity levels in the Coorong, particularly the northern lagoon. It means less likelihood of the Murray mouth requiring dredging. It also means about two million tonnes of salt will be flushed out to sea each year.
As a South Australian I visited that part of the river system on several occasions, and I particularly visited at the height of the drought when the local environment was at its worst. There was no water flowing through the mouth and there was a dredging machine operating continuously for about two or three years prior to that, simply to try to keep little bit of water flowing through it. I saw the lakes. There were jetties in the lakes which were actually jetties on sand, because as far as you could walk out it was simply sand—there was no water in the lakes. The people who had moved down there to change their lifestyles and live in that part of the region were living in a pretty dry and barren area. The native vegetation around the place was almost all gone. In addition to that, we saw the emergence of acid sulphate soils and many of the local creatures of the area dying, including the turtles.
That was the perilous state that the lakes system had reached at the height of the drought because we did not have a plan. I have been there since and I can tell members that the situation has changed immensely. It has changed because we have had good rains over the last couple of years, the water has started flowing again, the salt has been flushed out of the lake system and the environment has regenerated. We were told earlier this year, when we went out there, that had the drought continued for a few more months the damage probably would have been irreversible. That is how close we came to what we would refer to as a tipping point. Fortunately, it was reversible and the local environment has regenerated.
All of the changes that the 3,200 gigalitres can bring to that part of South Australia are based on science—science that has been prepared for the Murray-Darling Basin Authority and, in turn, peer reviewed by the Goyder Institute for Water Research on behalf the South Australian government. That peer review modelling was enough for the South Australian government to say, 'We will withdraw our proposed High Court action against the plan if we don't get more water'. The South Australian government was originally looking for an even higher figure than that, but the South Australian government was prepared to accept the science, which is the very science that underpins this plan and the plan that the minister is now putting to the parliament.
This bill sets out the process and the mechanism by which the additional 450 gigalitres will be secured. The government amendments also make clear that the additional 450 gigalitres is not just an ideal figure put in the bill for the sake of having a figure there but it is a clear target firmly committed to by this government and by the minister. In support of that clear target and commitment, the government is prepared to commit $1.775 million over the next decade, place it into a special account and use it for the purpose of acquiring the additional 450 gigalitres of environmental water that is being sought. I believe that that is as firm a commitment as any government could be expected to make.
I have heard the members opposite speaking on this matter, and I understand that not every sector is happy with the proposed plan as it currently stands. But I have also read some of the reports that come from some of the rural communities and some of the environmental communities, and it is interesting that we have a mixed bag. Some people speaking up on behalf of the farming sector believe that this is a pretty fair plan. Similarly, some who speak up on behalf of the environmentalists feel the same. At the same time, there are people at the extreme ends of both of those arguments that argue that 3,200 gigalitres is not the right figure. Some environmentalists argue that it ought to be higher; some farming communities say that it is already too high.
The fact is that only time will prove exactly who is right. Right now, in the absence of time, we have a responsible plan being put where nothing else exists, and it is a start of a process that is not only based on good science but that will be open to continuous reviews if the need arises. So, as the need arises I am sure that this government or future governments will be able to make minor adjustments to it. As we have seen in other legislation, we have already provided the flexibility of five per cent movement up or down in terms of the sustainable diversion limits of water from each individual area.
Given that the minister is here, I would like to commend him in leading the debate on this issue. It is clear to me that the minister has listened to the communities in the Murray-Darling Basin system as part of his determination of this plan. As a supplementary member of the Winsor inquiry into this issue I also went out and spoke to community members right along that system. And I picked up on what they were saying. And it is clear that the minister has taken note of what they are saying. That is clear because he has done two very critical things. First, he has extended out the time frame, which enables the transition to take place over a longer period, and therefore has less impact on any local communities. Second, he has ensured that the additional 450 gigalitres will be taken from irrigation efficiency measures and not through the purchase of water entitlements. And they were two very clear messages that were being sent out to the committee that I was a part of.
But perhaps the most important message that was being sent out to the committee was that people along the entire system wanted to have a degree of certainty. The speaker who preceded me—the opposition spokesman for the environment—was talking about farming communities. I well understand the difficulties that farming communities have experienced over the last decade. I understand because I have been out there, I have seen their farms and I have spoken to the people. Their hardships are very real; there is no question about that at all. But their hardships were brought about, I suspect, for two critical reasons. The first reason was the drought, and as a result of the drought there was insufficient water in the system. Had we had a plan in place 10 years ago, they might have been better off because the water that was in the system would have been better managed and that in turn would have meant that they had more reliability and might have been able to get through the drought a little better than they did. At the height of the drought many farmers had access to zero water. They had no water at all. And if they wanted to grow crops they had to go and buy the water that they needed—and buy it at a very high price. It was a price that, quite frankly, I doubt that many of them could have afforded. Because they got themselves into debt—both because they could not grow produce and because what they did grow came at a very high price—they find themselves today in a really difficult situation.
The second reason for the hardship is the high Australian dollar. There is no question at all that that is affecting exports, including the exports of the growers along the Murray-Darling system. If we are going to provide them with any kind of support I think the best thing we can do for them is to say to them, 'You can now look to the future with a degree of certainty,' because if they have certainty they can plan accordingly. And if they plan accordingly they are more likely to get through difficult times much better. As I said, at the height of the drought a lot of farmers found it incredibly hard because for a lot of them it was the first time that they had been faced with such severe consequences and such severe situations.
I now return to where I started in terms of the importance of this legislation to South Australia. For South Australia this is important not only to the people in the Lower Lakes, down at the Coorong and the Murray mouth area, but also to the growers in the South Australian Riverland. They, like growers across Australia, went through hardships. Unlike growers in some parts—not growers in all areas, because I believe there have been very responsible growers right across the system—they made investments in water efficiencies in the late sixties and around 1969. Unlike farmers in some areas, they did not increase their water entitlements; they stuck to their entitlements, so they have done all they can to make the system sustainable.
The reliance now is on what happens upstream, because at the end of the day South Australians consume about seven per cent of the total amount of water that is taken out of the system. So, in effect, South Australia's contribution to fixing or breaking the system is much less than it is for others. But for South Australia, at the end of the system, this plan means a lot. It means security for the state in terms of the water supplies we need at the lower end, and it means security for the growers who rely on the waters of the Murray for their living. I commend the plan to the House.
I thank all members for listening quietly. I have taken a view that the deferred division should not be proceeded with until the member for Makin, who was speaking at 8pm completed his speech, so I did not interrupt the member. The debate is adjourned and the resumption of the debate will be made an order of the day for a later hour.