Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

As the Senate is probably aware, there is currently a four per cent limit on permanent trade out of water irrigation areas, which was agreed to by all states and, I believe, the then Commonwealth government—the previous government—in the context of the National Water Initiative. One of the issues in terms of water reform is looking at the gradual lifting of that cap, and this issue has been discussed at the COAG meetings between the Prime Minister and the premiers. As Senator Xenophon may be aware, it is the Commonwealth government’s view that water markets and those who rely on them—that means irrigators as well as other users—are best served if the markets enable water to go to where it is most valued. However, we do recognise that there are significant concerns in certain communities about the four per cent. Certainly we have received representations from the Victorian Farmers Federation and others, some of whom do raise concerns about any lifting of the four per cent cap.

At the most recent COAG meeting it was agreed by first ministers that governments would look to raise the cap to six per cent next year as an ambition. Obviously there are issues there which are being worked through. Senator Xenophon may recall that after the cabinet meeting in Adelaide on 14 August, when the cabinet received a briefing on the situation in the Murray-Darling Basin, the Prime Minister indicated that the Commonwealth would continue to actively pursue reforms that were necessary to ensure the lifting of the cap and its implementation on a consistent basis.

If I could just interpose there on that point, one of the issues on which we do need to try and move forward is that of the cap not being applied consistently across states, and we are keen to see that reform progressed. As I said, we do recognise that there are some concerns amongst regional communities about the four per cent cap being lifted. Of course, this reform is being considered in the context of a very difficult time for our irrigation communities—whether they be in South Australia, Victoria, New South Wales or elsewhere—and obviously the discussion about the four per cent cap is being dealt with in that context.

My advice is that consultations are being held in relation to the staged lifting of the cap and have been held in Berri, Griffith, Deniliquin, Mildura, Shepparton and Swan Hill. We do take seriously the need to engage with regional communities on this issue. As I said, though, our view as the Commonwealth government is that we do believe that communities will ultimately be best served if water is able to be traded to where it has most value. I again reiterate the Prime Minister’s indication after the 14 August cabinet meeting that the Commonwealth will continue to actively pursue reforms necessary to ensure the lifting of the cap and its implementation on a consistent basis.