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

I indicate that I will be supporting the Water Amendment Bill 2015, with some reservations. In my first speech in this place, on 27 August 2008, in the middle of the 'drought of the century', I spoke about the crisis that the Murray-Darling Basin was facing, the crisis facing the Lower Lakes at that time, where some commentators declared the environmental disaster in the Coorong and Lower Lakes as reminiscent of the devastation of the Aral Sea in the former Soviet Union. I also talked about a 1999 report that Phillip Coorey, now Chief Political Correspondent for The Australian Financial Review, wrote about in the Advertisera leaked CSIRO report that said Adelaide's water would be too salty to drink on two days out of five by 2020 unless there was a major shift in water management along the Murray-Darling river system. I think it is fair to say that there has been a major shift in water management. It is not perfect, but I do not want the perfect to be the enemy of the good, and that is why I am supporting this bill.

I do indicate that I think that Senator Rhiannon's second reading amendment is not unreasonable—that you need to take into account the science and the evidence in terms of the impact of measures on sustainability of the river system, as well as climate change issues such as climate variability. All these matters need to be taken into account.

Back in 2009, I unambiguously supported reforms to the river system that, as a result of negotiations with the then Rudd government, led to a fast-tracking of $500 million in water buybacks, $200 million for river communities and $200 million for stormwater harvesting for urban areas, which I think was a very sensible and good move. And, in the end, I think both sides of the political fence as well as my crossbench colleagues thought that they were positive measures.

The Water Amendment Bill 2015 is yet another marker in the long, arduous and winding journey of water reform in Australia. It imposes a statutory cap of 1,500 gigalitres on Commonwealth purchases of surface water across the Murray-Darling Basin. The government's rationale for this measure is certainty—certainty for communities, certainty for farmers and irrigators, and certainty for the environment. By legislating a cap, any purchasing activity from the 1,500 gigalitres must be carefully planned and must be for strategic purposes. The government states that this cap on Commonwealth water purchases will bridge the gap under the Basin Plan to 1,500 gigalitres across the Murray-Darling Basin. The balance of water recovery measures will be focused on infrastructure upgrades, efficiency projects and environmental works and measures.

The issue of efficiency measures is a subject close to my heart. We know that, for over 100 years, before the earlier plan started by the Rudd government and continued by the Gillard and Abbott governments, there was not an adequate approach in terms of water reform and that there were some in upstream states who treated the basin as a bottomless well. With little or no thought for those upstream or downstream, some states appeared to simply take what they needed—

Senator Canavan interjecting—

Some states—let's not talk about Cubby Station, Senator Canavan!—took what they needed and exploited this natural resource in an unsustainable manner. South Australia, being at the end of the system, was the first state to become aware of the problem. Reduced water flows because of overuse upstream, particularly in a time of drought, meant that South Australian farmers had to invest in efficiency measures long before anyone else—as long as sixty years ago.

But this incredible foresight turned out to be many irrigators' Achilles heel. When the previous government announced measures to improve on-farm efficiency, many South Australian irrigators found they were ineligible because they were already too efficient. In effect, they were discriminated against because they took action long before anyone else to address unsustainable levels of water use. That is why it is important that the management of water use in the Murray-Darling Basin includes a number of measures.

The cap on Commonwealth purchases is one measure. But where the cap is concerned, and before any Commonwealth money is spent, this question must be asked: is this the most efficient use of government money in the context of the environment and river communities? In order to ensure spending efficiency is achieved, the cap must be monitored. We must ensure we are getting the most bang for our buck and that this 1,500 gigalitre limit on purchases is achieving its intended results, including environmental results. I therefore welcome the fact that the government will be providing regular updates about purchases made through the cap in the Water Recovery Strategy for the Murray-Darling Basin.

Another provision of this bill must also be subject to continued scrutiny: the proposed amendment to the Murray-Darling Basin Plan which aims to increase flexibility in the recovery of 450 gigalitres of water through efficiency measures. These efficiency measures will be funded through the Water for the Environment Special Account. Under the government's proposal, these efficiency measures must result in neutral or improved social and economic outcomes in order to receive funding. Describing the beneficial effect of investment in infrastructure projects, the Victorian Farmers Federation in its submission to the Senate inquiry into this bill stated:

Recovering water through infrastructure investment instead of buybacks also has positive impacts on the supply chain. Where farmers are able to maintain their productivity this helps to protect on-farm employment and jobs in milk factories, wineries, fruit and nut processing plants as well as sustaining jobs in transport and marketing. Keeping jobs in small and medium sized towns is critical to the economic and social survival of regional communities. These long term benefits are also supported by a short term boost to local economies as contractors are employed to construct the infrastructure projects.

Those sentiments from Victoria are very much mirrored by South Australian communities, particularly in the Riverland, who understand the benefits of certainty for their river communities.

The Australia Dairy Industry Council has quantified, in dollar terms, the benefits of water buyback versus investment in infrastructure. According to research it conducted in 2012, water buybacks can actually result in reduced economic activity in the area. Investment in infrastructure, on the other hand, increases economic activity. The one caveat I have in relation to what the dairy industry says is that you need to have a viable river system in the first place, which is why I will be supporting Senator Rhiannon's second reading amendment. You need to take into account the science, because unless you have a viable river system there will not be anything to build on in terms of viable economic communities. We know from the evidence given to this inquiry that economic activity with efficiency measures can make a real difference in sustaining populations and economic activities in communities.

The government must acknowledge and address concerns raised by the Murray Lower Darling Rivers Indigenous Nations that infrastructure upgrades impact on Aboriginal cultural heritage and important cultural landscapes. Many indigenous communities have a long history with the land around the Murray-Darling Basin—in fact, one that extends tens of thousands of years. They are particularly vulnerable to the encroachment of new infrastructure projects on culturally significant land. That is something that of course must be taken into account in the context of how this money is spent.

The Australian Dairy Industry Council has done an analysis of the multiplier effect of investment in infrastructure which shows that such measures can be more expensive per megalitre than buybacks. Furthermore, there are warnings that the aim of 450 gigalitres in water savings may not be met by infrastructure upgrades. The SDL—sustainable diversion limit—Adjustment Stocktake Report published in August this year warned that:

Better engagement is required between the Commonwealth and the states to resolve a number of issues where different views about the performance of various on-farm efficiency driven programs exist …

I therefore urge the government to carefully examine the uptake of infrastructure projects and to monitor not only the water savings but the cost effectiveness of those savings.

What tipped the balance in favour of my supporting this bill was the attitude of the South Australian government. I do not think they could ever be accused of being a natural friend or ally of the federal government, but Minister Ian Hunter and his office have been very helpful to my office in indicating that they do support these changes, that there are sufficient safeguards in these changes for South Australia, that they do strike an appropriate balance and that there are monitoring mechanisms in respect of this. The fact that the South Australian government, given the history of negotiating in respect of this, is satisfied that this bill has appropriate measures to safeguard the health of the river system, the environmental health of the river system and the economic welfare of river communities tipped the balance in favour of my supporting this legislation.

The Murray-Darling Basin is one of our most precious natural resources. It is also the food bowl of our nation and the lifeblood of hundreds of rural communities. It is incumbent upon us to ensure that we manage this precious resource in a responsible and sustainable way.