Simon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | Hansard source

I thank all of the contributors to the Water Amendment Bill 2015, which is focused on putting in place a statutory limit of 1,500 gigalitres on the Commonwealth purchase of surface water across the Murray-Darling Basin. The bill further amends the Murray-Darling Basin Plan 2012 to provide an increased level of flexibility in the means to recover the 450 gigalitres of water through efficiency measures that can be funded under the Water for the Environment Special Account.

If I were to leave this Senate tomorrow—which is not my intention, for the benefit of anybody listening; I am sorry to disappoint you, Mr Acting Deputy President Gallacher—I would say that one of my, if not proudest, achievements would be the role that I played, along with many, many others, in relation to water reform in Australia. This was particularly so in 2007, when I joined this place as a member of the then Howard government, when I saw the passage of the Water Act. This was a groundbreaking piece of legislation and a major reform initiative of the Howard government in its final year in office. Then, in 2012, as one of the then opposition spokespeople on water matters with particular responsibility for the Murray-Darling Basin, I saw the bipartisan support for the adoption of the Murray-Darling Basin Plan that the Water Act provided for. Similarly, we saw bipartisan support for the establishment of the Water for the Environment Special Account. Today we see yet another step in the progress around water reform in Australia with, once again, bipartisan support for this piece of legislation.

I thank the Labor Party for the constructive way in which they worked with the Howard government and have worked with the Abbott government in this important area, just as we were willing to work constructively with them on this important reform when they were in office. I also acknowledge the constructive approach that many on the crossbench take to this matter as well.

It stands as a permanent record of disappointment that when the Basin Plan was adopted, a plan for the first time ever for a national approach in law to the management of the Murray-Darling Basin with the setting of sustainable extraction limits, the only party that opposed that plan was the Australian Greens. That remains a blight on the record of the Greens, who were the enemy—and appear to remain so—of good policy. It may not have delivered all they wanted, but this was very good policy and it is making a marked difference to the environment.

It is important to remember that just what that Basin Plan provides for. The Basin Plan sets in place a long-term average sustainable diversion limit for extractions from the basin of 10,873 gigalitres per annum. That represents a reduction of some 2,750 gigalitres per year from the 2009 baseline diversion level. To convert that into English for anyone who is listening, it means that there will be a substantial reduction in magnitude of around 20 to 25 per cent of the water to be extracted from the Murray-Darling Basin in the future. That water will go back to preserve the environment and to ensure the overall health of the basin.

Our side of politics has always been particularly concerned about not just the delivery of a healthy river system but also ensuring the health of river communities and the economies that those communities rely upon. That is why the Water Act has as its object the optimisation of the social and economic impact on communities as well as the environmental impacts. That is why, in opposition, we devised a policy that would see a cap on the level of water recovery undertaken by buyback.

It is very important to recognise that you can recover water by different means. You can recover it by simply going into the market and buying it back. You can recover it by undertaking major infrastructure projects that upgrade river systems and make them more efficient. You can recover it by making environmental watering activities more efficient. You can recover it by investing with farmers on their farms to make their use of water more efficient. All of those ways will get you licensed water holdings or water offsets to go against the Basin Plan targets.

As a coalition of parties, it has firmly been a view of the Liberal Party and the National Party that the most economically and socially responsible way for those river communities to recover water against the Basin Plan targets is to invest in infrastructure wherever we can. That is why in opposition we came up with the policy for a cap on buybacks of water licences of 1,500 gigalitres. I am delighted that today the government will hopefully see that cap put into legislation. By putting it into legislation, river communities can have the confidence that governments will have to invest in infrastructure to meet the Basin Plan targets that have been set.

As a government, we are already doing that. We are pumping some $3.9 billion into the infrastructure of Murray-Darling Basin communities, investing around $2.5 million per day between now and 2019 to make farms, irrigation systems and environmental watering activities as water efficient as possible. Through all of that, we will be getting contributions that will get us towards the Basin Plan targets. I am very, very pleased that we are on track to see those Basin Plan targets met in full and on time by 2019, as was our election commitment.

There have been a number of contributions to the debate which I will touch on quickly. Firstly, there was the contribution by Senator Rhiannon, who seemed to suggest that somehow this legislation will undermine meeting the sustainable diversion limits. I want to be very clear that this legislation in no way changes the statutory responsibility the Commonwealth has under the Basin Plan to see those sustainable diversion limits achieved and enforced. This legislation is only about how we bridge the gap to those new sustainable diversion limits, not whether or not they exist or what they are. They exist in law. They are not being changed in law. We are simply looking at how they will be achieved.

Already around two-thirds of those targets have been secured. The government is committed to seeing the remainder secured in full and on time. The recent SDL adjustment mechanism stocktake report, which was released on 27 August, provides confidence that the gap to the Basin Plan targets can be bridged in full and on time without breaching this 1,500-gigalitre limit on buybacks. It found that a supply contribution of 508 gigalitres is plausible, and basin ministers remain committed to working towards a supply contribution of up to 650 gigalitres.

Senator Rhiannon also asked questions about some of the definitional aspects around long-term annual average quantities of water used and what that means. This issue has come up in Senate estimates a number of times. For the benefit of Senator Rhiannon and the Senate, the Department of the Environment calculates the amount of water taken or accessed under purchased entitlements or recovered entitlements as a long-term average annual yield at the time of purchase. This is used to translate entitlement volumes—the actual volume of water on a water licence or entitlement—into long-term diversion limit equivalents to allow for meeting the basin plan. Essentially, it is a calculation about the reliability of having water against that water licence. That is a sensible way of doing it because, as I am sure Senator Rhiannon understands, different water licences have different levels of reliability. Therefore, you cannot take a water licence at its face value. It is actually about assessing how much water you get back from that licence that matters most.

Senator Rhiannon also claimed that this legislation was contrary to the notion of open markets. I am very pleased and proud of the functioning water market that Australia has in the Murray-Darling Basin. Farmers are free to buy and sell entitlements within the limits of the cap at any time on an open market and trade them as such. The Commonwealth has entered that market at various times, but by having the cap in place and prioritising infrastructure investment we are ensuring that the Commonwealth is involved less in that market, distorting the market less and leaving it to function more fully for irrigators and that trading of licences.

Senator O'Neill, in her contribution, touched on many issues, many of which were not at all relevant to the topic before the chamber. She started by quoting Charles Cameron Kingston, a former premier of South Australia, on water management in the federation debates, as I also have done so many times in this place. The one thing I would say to Senator O'Neill is to be careful in talking about this topic. When I held responsibility for it I quickly learned that it was very important to make sure that you say the same thing to people downstream as you say to people upstream. It is very important to make sure that you have a consistent message on this topic because, as Mark Twain used to say, 'Whiskey is for drinking; water is for fighting over.' In this space we have seen that all too often. To take communities with you, you need to be consistent in your messages to them.

In closing, I want to pay tribute to the many members of the National Party and the Liberal Party representing Murray-Darling Basin seats who have lobbied to get this policy implemented. They have worked hard in that regard. They ensured that in opposition we committed to the 1,500 gigalitre cap and they have worked hard to ensure that legislation was brought forward. I acknowledge the support of many of the communities and irrigation stakeholders who have supported this, as well as the support of the state ministers, South Australia included, all of whom have worked together to ensure that they support this legislative package, just as they have done on other reforms previously.

In closing, I want to pay tribute to my successor in the water portfolio, Mr Baldwin, for securing that agreement of state ministers. It is to his credit that he brought them together and ensured that all were agreed and aligned around this important reform. I commend the bill to the Senate.