Nick Xenophon (SA, Independent) Share this | Hansard source

I present the explanatory memorandum and I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Emergency Water (Murray-Darling Basin Rescue) Bill 2008 empowers the Minister to address the current crisis affecting the Murray-Darling Basin and ensures its environmental and economic sustainability by providing all the necessary powers to conduct an interim federal takeover of the Murray-Darling Basin.

The Minister will be empowered to make determinations on any matter necessary to give effect to its objects, including determinations about how best to allocate, share and manage Basin water resources and, importantly, determinations regarding all processes that may adversely affect Basin water resources.

In this respect, the Minister will also be responsible for determining the share of water that is needed to maintain essential system functions and water quality, the share of the remaining non-flood water to which a Basin State is entitled and, the share, if any, to be granted to the environment as a clearly identifiable and inalienable entitlement to a water allocation in the water resource plan area.

The effect of this will be to treat the Basin States and the environment as separate and distinct shareholders of Basin water resources.

The determinations of the Minister with respect to the sharing regime are critical to realising the intended purposes of the bill especially in terms of sustaining and protecting the environment.

The bill will enable the Minister to differentiate between what can be referred to as ‘tradeable’ and ‘non-tradeable’ water when giving effect to an Interim Basin Plan.

The bill will further ensure that when making a determination with respect to an Interim Basin Plan, the Minister has regard to factors which are critical to the sustainability of the Murray-Darling Basin including, the principles set out in the National Water Initiative, critical human needs and environmental needs and obligations amongst others.

The second important feature of the bill relates to regulating water trade.

The bill addresses this in several ways. Firstly, it prohibits persons or agencies of States from limiting or impeding the transfer or sale and purchase of water access entitlements, water access rights and water allocations among Basin States. The practical effect of this is to open up, with the approval of the Minister, the trade in water.

Secondly, it proscribes any State or Territory from acting in a manner inconsistent with an Interim Basin Plan or a determination made under the bill. Again, this will ensure that science, need and national policy, rather than local interest will determine the health of the system. This is vital if we are to have one river system with one set of rules.

Thirdly, the bill prohibits constitutional corporations from undertaking activities that impede the flow of water from the Murray-Darling or taking part in activities that divert or significantly intercept water from the system. Since the 1970s, the High Court of Australia has opened up the scope of the corporations power.

As is well known, the recent WorkChoices decision confirmed that the power now extends to directly regulating the business activities (including things done in preparation for, and in the course of, trade) of constitutional corporations. The bill directly empowers the Minister to prohibit future activities by corporations that would undermine the planned use of the waters from headwaters to the Murray mouth. This is vital because the rivers must run in the national interest, not any single corporate interest.

Fourthly, the bill allows the Minister to acquire, on just terms, a proportion or all of a water access entitlement or a water access right in a water resource plan area, or any land associated with an acquired water access entitlement or an acquired water access right if appropriate, for the purposes of maintaining the reliability of water access entitlements and water access rights or returning water use to sustainable limits.

The Basin is over allocated. The decisions of the past now threaten the very future of the rivers and the communities that adjoin them.

The Commonwealth Constitution gives power to the Parliament to acquire property on ‘just terms’. This bill empowers the Minister, subject to the guarantee of just terms compensation, to acquire some or all of the water licences to enable the rivers to be managed responsibly. In the same way that land is acquired ‘on just terms’ for other infrastructure, so it should also be acquired for the river systems.

Fifthly, the bill addresses the issue of taxation schemes that are detrimental to the management of Basin water resources by requiring the ACCC to inquire into the effects of arrangements in the Income Tax Assessment Act 1997 on the water market and on the nature of irrigation practice and investment. This will ensure an independent and transparent process.

One of consequences of the promotion of agricultural schemes, through the taxation system is that large organisations, which have little or no regard for sustainable agriculture, is the further depletion of our water resources. This bill provides a mechanism whereby the Parliament and the Australian people can scrutinize these schemes.

Finally, the bill deals with States that fail to comply with an Interim Basin Plan by reducing their share in the Basin water resources by ten times the quantitative effect of that failure to comply with an Interim Basin Plan.

It also enables the Minister to apply an injunction against a Basin State that continues to fail to comply with an Interim Basin Plan.

For decades the Commonwealth has used its financial power to bring about policy changes on the part of the States. It is regrettable that the States have been eager to demand more funding but are less enthusiastic to comply with national needs.

A failure on the part of the States to comply with the Interim Basin Plan is a failure to manage this precious resource, our river system. Under this plan, there will finally be consequences. The choice, however, remains with the States. It is a provision of the bill that should never be called into action.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.