Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

I am pleased to speak on the National Water Commission Amendment Bill 2012. The National Water Commission was established in 2005 by the coalition government led by Prime Minister Howard. At that stage Mr Anderson was the Deputy Prime Minister. Both were very cognisant of the importance and significance of drought across eastern Australia and the drought that was afflicting much of the country. It did lead to a water reform agenda that is still very much a work in progress today, especially for, as I have said many times in this place, the Murray-Darling Basin states and the Murray-Darling Basin territory. The National Water Commission has been tasked with a remit that is somewhat broader than just the Murray-Darling aspects, although it does have an important role to play in that regard. The NWC's role is integral to getting water reform right in this country at a much broader level.

This legislation comes before us because the NWC upon its establishment by the Howard government had a sunset clause provision put in place. A review has been conducted by the government cognisant of that sunset clause, and as a result the government has brought forward this legislation to extend the remit of the NWC beyond 30 June 2012. This extension is welcome. On a personal level, I very much value significant parts of the work of the National Water Commission. They have brought an academic rigour, as well as a practical assessment, to the operation and consideration of water policy in Australia. In some ways, they are very much a Productivity Commission type sector or Productivity Commission type organisation, set up very specifically for water policy in Australia. It is important at the urban and regional levels that we get some of the fundamentals of water policy right, that we get the pricing issues right and that we recognise that water is a finite resource that needs to be treated at all levels with respect and priced in a way where users value the water they are using and where, if it is being used for commercial purposes, they get the highest value outcome from it.

That is not to take away from the fact, as we all appreciate, that water is a fundamental staple of human life and that obviously there is a basic human critical need to have access to water, regardless of price considerations. But especially when it comes to irrigation communities around the country it is fundamental that we get the pricing of and therefore the trading and market access to water right. The NWC has a very critical role in assessing the work of state and federal governments in proceeding to get water policy right in this pricing construct.

I have been in this place now for five years and, as I have travelled through irrigation communities and as I did in my previous roles beforehand, I have been very pleased to see a transformation of attitude that has occurred in those irrigation communities, a transformation where farmers no longer just talk to you about the dollar per hectare return they get off the land but now talk to you about the dollar per megalitre return they get off the land. That is a demonstration that the 2004 reforms of the National Water Initiative, which led to the establishment of the National Water Commission and its role, have permeated throughout the Australian water industry and that users of water are now putting a value on water and that, in so doing, they are recognising that it needs to be put to its highest value use.

I hope that, as we get to that end point of ultimately this very long and painful process of adaption to get the Murray-Darling Basin onto a sustainable footing, we will have fully functioning water markets where we can see water traded effectively, free of state barriers—and there are still, shall I say, some non-tariff type barriers that exist between the states that prevent that free and effective trade of water. We will see that free trade occurring that will allow every drop of water that is allocated for irrigation use to eventually flow to and be used by that highest value end point and, in so doing, provide Australians with the best opportunity they have to get the best bang for their buck from this finite amount of water available to us.

The National Water Commission have a very valuable role to play. As we look at this extension of the National Water Commission, they need to be very focused on what that role is. As we go forward, their role in holding the states and the Commonwealth to account for actually delivering on water reform is critical. Their role in providing expert analysis and advice is absolutely critical. But they need to ensure they are focused on those priorities and that will be very important moving into the future. It is not necessarily their role to operate like an academic institution that perhaps produces all sorts of thoughtful research briefs that are not necessarily focused on the core policy outcomes that Australia needs. Valuable though that work is, we must recognise that the finances of this country are, as I am sure Senator Joyce will say, tight, to say the least, and that the dollars allocated to the operation of the National Water Commission in future need to be the minimum amount required to do the job that they have been tasked with. That important job is to see through in the most efficient and effective way the National Water Initiative and the Murray-Darling Basin reforms.

I have particularly appreciated the work of the NWC when I have received copies of their biennial assessment on the Murray-Darling reforms. They are good documents, they are thorough documents and they have called to account governments of all political persuasions for their failure to deliver on promises—failure to deliver on key water infrastructure projects, failure to deliver on achieving the reforms to water market trading as effectively as possible and failure to deliver on the speed of the Murray-Darling Basin reforms. All of these failures have of course mounted at present and what we see right now in water reform in this country is, sadly, a real crisis in confidence, especially when it comes to the Murray-Darling debate—a crisis in confidence in that reform that exists both downstream and upstream. Nobody is happy with the way the debate has gone; nobody is happy with where it is at. To ensure that we have some hope and some chance of getting it back on track we need good, credible independent organisations such as the National Water Commission to call it as they see it, to call it based on the facts, to call it based on expert evidence and to hold governments to account for the key policy principles that they have set out.

I will conclude my remarks there but simply reiterate that, as we move forward with the NWC, they need and the government ministers who work with them need to be as focused as much as anything else on keeping them working to their core objectives. Their core objectives need to be seeing through the National Water Initiative, seeing through the Murray-Darling Basin reform and holding governments to account so that we get that sustainable management of our water resources in a way that is market driven and that ensures that finite water is used for the best possible purchase at the best possible value and causes, be they in our rural communities or in our urban infrastructure.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

I rise tonight to speak, in this debate on the National Water Commission Amendment Bill 2012, on an issue to do with the National Water Commission. I concur with the remarks of Senator Birmingham and I also acknowledge the support and diligence given to this by Senator Farrell. I have to say—and I do not know whether this is a bipartisan view, but it is a statement of honesty—that at a time of privation that has obviously been brought upon us by the needs of more stringent financial requirements, we always have to be cautious in the extreme about the extension of bureaucracy without a sunset. The National Water Commission was brought in with a sunset clause and it is supposed to come to a conclusion. Were times more provident, so there was more money about, the extension of it would be something of not much consequence. But unfortunately these times mean we have to always start erring on the side of more diligence and away from the purely aspirational. I have to be honest and say there was quite some deliberation about this issue. I am sure that Senator Farrell has acted in a very honourable way. I have conferred with Senator Farrell and confirmed that this was an item of quite some discussion within the coalition. However, after deliberations we have fallen on the side of agreeing to the extension of the National Water Commission, but I think it is important that we put a shot across the bow because I know of people in the coalition—especially Senator Sinodinos, who maybe in the future will have a greater role to play in the financial affairs of our nation; he is on the ERC for the coalition so he has a role to play there—who are always looking for and trying to find savings where they can.

So we have had discussions on the National Water Commission and we will concur on their role continuing but they must, as Senator Birmingham has rightly said, be on their game—because this something where every dollar we spend on the commission is a dollar we cannot spend on health or pensioners or dental care or children or AIDS research or in so many other places. We cannot spend the money twice. So I hope that those within the National Water Commission understand the tenuous nature of the financial predicament that this nation has been put in and how we have to do everything within our power to try and make every dollar count. So what we are really doing now is approving the extension of funds. It was implicit that the commission would actually end on 30 June—not continue but end. However, these are the calls that are made. As to financial management, it is over to those on the other side to make sure that we bring this nation's finances back into account and that we start to reduce our debt, because we cannot go on extending our debt as we do not want to put our nation into a position where, with weeping and the gnashing of teeth, we are trying to work out how we get ourselves out of a dire financial predicament. You only get yourself out of a problem by never getting yourself into a problem. You avoid getting yourself into a problem by being prudent with the finances you are responsible for.

This bill continues the National Water Commission as an independent statutory body beyond its sunset date of 30 June 2012. The National Water Commission was established by the previous coalition government as part of the National Water Initiative agreement of 2004. The main reforms under the National Water Initiative include urban water and access to mining water, which is very prevalent especially with coal seam gas coming to the fore. I note with interest an APPEA report that talks about the direct taxation flow back to the Queensland government between the years 2015 and 2035 of $32 billion and I think the flow back to the federal coffers is in the vicinity of $243 billion. It is in that vicinity; I might have misquoted the figure, but it is about that. The expansion in the size of the Australian economy from coal seam gas alone is in excess of half a trillion dollars. The National Water Commission has a role to play because the by-products of the extraction of coal seam gas are water and also salt. This is a major environmental issue which I know Senator Birmingham is only too well aware of. How we manage that is, I imagine, a role that will also include the National Water Commission as an independent arbiter and a deliberator on the facts that are presented to them.

A review of the National Water Commission was conducted by Dr David Rosalky. It recommended that the National Water Commission continue in its role so that it can carry out these functions because water reform is occurring within 'a highly complex and evolving environment' and requires an independent and specialist institution. The government accepted the Rosalky review's recommendations. Under this bill, the National Water Commission has the responsibility of assessing progress against the National Water Initiative every three years and, in addition, under the Water Act 2007, the National Water Commission may review the Murray-Darling Basin Plan every five years. The National Water Commission also advises on whether plantations can apply for carbon farming credits, which they can do if a state or territory government manages water and interceptions consistent with the National Water Initiative. I acknowledge that in the discussions we had we did look at the prospect of the Productivity Commission doing it and also, under the processes of COAG, COAG having a look at this role. However, the National Water Commission continues, so this bill makes other less substantial changes. The bill closes the Australian Water Fund and the bill will reduce the number of National Water Commission commissioners from seven to five due to the National Water Commission's reduced functions. The National Water Commission plans to have 44 staff in the next financial year, reduced from 63 staff in 2011-12. The National Water Commission has a budget allocation of $34.3 million over the forward estimates.

The coalition will not oppose this bill as the coalition has been a long-term supporter of water reform. The coalition kick-started the water reform process with the establishment of the National Water Initiative in 2004. I would just like to take this opportunity to reflect on how successful the National Water Initiative was and how it remains a model for water reform today. Under the National Water Initiative, it was explicitly recognised that there is a trade-off between economic, social and environmental factors. We can never achieve all of these goals at the same time; we must weigh each up against the others and come to a balanced outcome—what is otherwise known as a triple-bottom-line approach. Achieving a triple-bottom-line outcome is difficult. You will always make some people unhappy, but it is the only way to achieve practical and sensible outcomes.

We must acknowledge that the decisions made about water are some of the most politically sensitive decisions in any nation at any time. If you want to see the source of so many disputes between nations and within nations, you can find no better subject to talk about than water. We can see the alternatives within the debacle that is the current Murray-Darling Basin Plan. The government presented a plan in 2010 which explicitly put the environment above other factors. We saw the result in the near riots there were in regional towns. The government now says that it has a plan that will optimise economic, social and environmental factors, but there are still grave concerns about whether it can achieve this under the plan. The Senate Standing Committees on Legal and Constitutional Affairs ruled that the act gives priority to the environment above economic and social factors. It was interesting in that report that the net was cast far and wide to get opinions on that issue—from the conservative side, Judith Sloan, to a former Labor Party contestant and candidate, Professor George Williams, and then we went overseas to Professor John Briscoe, from Harvard—and they all came to the same conclusion.

The National Water Initiative also allowed for the development of the Living Murray initiative, which delivered 500 gigalitres of water in a cooperative approach. It is things such as the Living Murray initiative which show what you can do when you get the job right—how you can actually deliver water back to the system when you are diligent and your process has some acumen about it, and when you start basically from a local level and work your way up. You can actually get through this, but you cannot try and deal with it the way we seem to be dealing with it at the moment, which is this macro level of descending from high and above and then expecting people just to swallow your decision. You must give precedence and give some weight to the views of local people and local communities, because you generally find, especially on water, that they know best, and they will work to a process that delivers for you because they know their district better than anybody else. I have found that the RWAMP agreements and WAMP agreements in my state are successful because they started at the local level and then incorporated the local level in the state plan. The state plan brought an outcome and the outcome delivered water back to the river.

The classic example is that in the local area they know which are the effective farms and which are the ineffective farms they can take out of production without causing massive economic dislocation to the area. They also know the sort of capital infrastructure which can provides savings but does not disturb the economic base of the area. Their knowledge is vastly in excess of any knowledge—without being trite about it—of a bureaucrat, who may have the greatest intentions but just does not have the local knowledge to understand exactly how things work on the ground.

The coalition have some concern that the National Water Commission has been stripped of responsibilities by this government to such an extent that we question whether there is a value in maintaining an ongoing body with the overhead costs that this entails. The National Water Commission is left with just two legislative roles: an assessment of progress under the National Water Initiative every three years and a review of the Water Act every five years. Notwithstanding its excellent record, these are reviews that could be performed by the COAG Reform Council or the Productivity Commission. Both of these bodies have had dealings with issues pertaining to water.

The government has also missed the opportunity to give the National Water Commission more responsibility. For example, it has recently agreed to allocate $150 million to improving groundwater research as it relates to the mining sector, in particular the coal seam gas sector. I think that it is absolutely prudent, and we are supporting further research into coal seam gas because we know that this is the issue de jour out there. We know that so many people in both regional Australia and urban Australia have shown great sympathy and understanding of issues pertaining to the coal seam gas disputes that are going on and that people want to make sure we get this right. They understand the economic imperative that we must have a cash flow that sustains our nation, pays our debts and keeps the social functions of our nation going forward, but we must do it in a way that does not destroy aquifers. Aquifers are common property. My town, St George, runs on an aquifer. No aquifer means no town water. No aquifer in western Queensland means no cattle industry.

We also must understand the primary rights of landholders. They have a right to security of water. We cannot be compromising that. And prime agricultural land is an adornment to the nation which should be held in perpetuity without any threat to it whatsoever, because that is how we feed ourselves and that is how we keep ourselves. That is not just an asset for us in the short term; it is an asset for the nation and it should never, ever be compromised. It is more important than the Sydney Opera House, the Sydney Harbour Bridge or the Q1 tower on the Gold Coast because all those things can be rebuilt if we get it wrong. But you cannot rebuild prime agricultural land and you cannot rebuild an aquifer. If you get it wrong, you get it wrong and that is it; it is gone forever.

The final thing with coal seam gas is that you must get a fair return back to the landholder. It is absurd to think that an asset that is obtained from an individual's property, which historically the individual owned—hydrocarbonous materials were not vested with the state initially; they were vested in the hands of the individual. Oil, gas and coal were not the assets of the state; they were the assets of the individual. They were the assets of the landholder. In Queensland, that asset was taken from them in 1915, under the Petroleum Act, because of the First World War. The Kaiser has gone, the last time I looked, but the asset was never handed back to the landholder. In South Australia, in Senator Birmingham's state, I think it was in 1971 that they took it from the landholder there. In the territories, it was back in Menzies' time, in 1953, when they took it from the landholder. They only finished taking it from the landholder in New South Wales under the tutelage of the Hon. Neville Wran in 1981. At the stroke of a pen, individuals were divested of their assets and they were vested in the state without any payment whatsoever. On our side of the chamber, we believe the vesting of an individual asset for communal benefit without any payment or recompense is analogous with communism, not with conservatism. If we believe that something should be rightfully held by the community, then the community has a duty to pay the proper price for it. Otherwise you should stay away from it and you should not try to cover the theft with benevolent statements about why it is good to thieve from a person. If it is good to thieve from a person it is even more proper to pay them for it.

Notwithstanding its excellent records, there are reviews that could be performed by COAG, the Reform Council and the Productivity Commission. One is an investigation of the $150 million for improving groundwater research. The National Water Commission has also done some excellent work on water reform, but if it is to continue it needs to have a job to justify its funding. The coalition will continue to monitor and ensure that the money that is appropriated to the National Water Commission helps to encourage water reform. We want to make sure that we get this job right.

The coalition have been open in saying from the start that we are prepared to work with the government to come to a conclusion and we stay at the table for that purpose. The Greens, under Senator Hanson-Young, have openly said that they are throwing Teddy in the dirt and do not want anything more to do with it. We know how hard this subject is and we know that with goodwill, diligent work, luck and the understanding of the whole 2.1 million people who live in the basin we can come up with a plan for the Murray-Darling Basin that respects the social fabric, that maintains the economic base and allows it to grow—because it is important not only for the people in the basin, who, if they were a state, would be a middle tier state in our nation, but also for the nation itself. This is an asset of our nation that produces 40 per cent of our agricultural product and produces 60 per cent of our irrigation product. It has such assets as Deniliquin, which in its production of the staple carbohydrate rice feeds 30 million people a day. We can definitely say that our nation is responsible for some child in Southern Sudan having food in its mouth because our nation produces the food it consumes. If we were to remove that capacity then some person at some point of time in a future period of privation or when food production is scarce will certainly starve to death if we get this wrong. A child in Southern Sudan or someone on the Thai-Burma border will go without and definitely die if we get this wrong. We must look outside our current moral paradigm where we believe that it is encapsulated in the borders of our nation and realise that our decisions on the production of food affect people outside our borders. That is a responsible and mature way to look at these decisions, rather than the myopic way that appears in what is left of the Fairfax papers or in the Australian or on television. It is beyond that and we have a responsibility beyond that. We have to acknowledge that.

For the record, I acknowledge that I am not an irrigator. I live in an irrigation town, but I do not irrigate. I also acknowledge for the record that my family has property below irrigation projects and would dearly love there to be no irrigation because we would get more water. But that is the reality of the world and we have to live with it. This bill goes forward as a non-controversial bill, but I think it is only right that we say to those who are listening—and people in the NWC will be—that we are watching this space extremely closely and our expectation is that absolute diligence will be shown in the expenditure of the Australian taxpayer's money in this field.

Arthur Sinodinos (NSW, Liberal Party) Share this | Link to this | Hansard source

The National Water Commission Amendment Bill is a non-controversial bill and the coalition is supporting it. I am happy to support it. I was present at the creation of this body. I was not responsible for it, but I was around at the time and it reflected a determination of the then government that we had to progress water reform. Water reform had been around a long time. There had been some impetus given to it by the Hilmer reforms of the mid-1990s but the truth is that by 2004, when this particular body was set up, there was a view that we needed to go further. This was also at a time when drought was really starting to have an impact on parts of Australia, particularly in eastern and southern Australia.

It is good that there is a sunset clause on the commission. It is important with these bodies that we go back every so often and evaluate their performance to see whether they are performing appropriately; whether their functions are still pertinent, appropriate and relevant. I note in this particular case that Dr Rosalky, a respected former public servant, recommended in his review that the commission continue in its role so that it can carry out these functions because water reform is occurring within 'a highly complex and evolving environment and requires an independent and specialist institution'. Of course, the government has accepted the Rosalky review's recommendations. I think the view of the people who created the commission in 2004 was that that sort of specialist expertise was required at some remove from government. I am advised that over the years there has been some tension between having a body like this and also having a department with a particular water policy responsibility, but I think through the quality of its work the commission has justified its existence.

Under this bill the commission will have responsibility for assessing progress against the National Water Initiative every three years and in addition under the Water Act of 2007 the commission may review the Murray-Darling Basin Plan every five years. That will be quite a challenge, I imagine. The commission also advises on whether plantations can apply for carbon farming credits, which they can only do if a state or territory government manages water exemptions in a way consistent with the initiative. Since its inception the main work of the commission has been to review state and federal governments' progress against the National Water Initiative. It is true to say in that regard that there are a number of areas of outstanding reform which remain under the National Water Initiative, including urban water, access of mining to water, water quality in the environment and river health. To read out that list of areas for reform that remain is to remind ourselves of how difficult water reform can be. The idea of water pricing was controversial at the beginning, because people saw water as an essential item of life and therefore asked how you can price an essential like that. But pricing is in fact the way we deal with a scarce commodity and make sure that it is diverted to its most highly valued users. Some challenges remain in that regard but, on the whole, we are making progress. However, there is more we can do and the commission can play a role in that regard.

I note that in the time the commission has been operating it has administered the Australian Water Fund, which includes Water Smart Australia, the Raising National Water Standards and Community Water Grants programs, promoted national water standards across industry, developed a national water sector training strategy and undertaken general research into water policy issues such as trading of water rights, groundwater and coal seam gas. It is important that we get appropriate information on issues such as trading of water rights, disseminate that information and reject, if you like, through the provision of information some of the myths that sometimes attach to trading of water rights.

The commission has the support of a number of bodies, including within the water industry, to continue and it is generally seen as a body that has produced excellent research. The Australian Water Association argues that the commission helps put moral suasion on federal and state governments to maintain their commitment to water reforms under the National Water Initiative. I think that is right, because it is such a visible body in this particular space. The Water Services Association of Australia believes that funding for research should continue, otherwise more of the costs of producing it would be imposed on the water industry. Importantly, the CSIRO believes that the National Water Commission should continue, because it is important for a body to provide thought leadership to the sector and because helping to set the agenda and educate stakeholders and the community remain very important in this particular light.

I note what Senator Joyce and other colleagues have said about the National Water Commission having been stripped of a number of responsibilities by this government, which led to a bit of a debate within the coalition about the costs and benefits of maintaining the body. In the end we came to the view that in the interests of transparency it was good to maintain the body, but it is a watching brief—we have to make sure that the Commonwealth and the taxpayer get value for money from their investment in this body, even though the amount of money going to the body has been reduced over the forward estimates.

We should think about what further responsibilities we give his body. Having these commissions which are at some arm's length from government, particularly from government departments, is an important part of the process of getting the community to feel more confident about the outcomes of the work of these sorts of bodies. Therefore, it was a bit disappointing that, for example, there was the recent agreement to allocate $150 million to improve groundwater research as it relates to the mining sector, particularly the coal seam gas sector. Rather than being sent to the commission, it was sent to the Department of Sustainability, Environment, Water, Population and Communities. If we are serious about evidence based policy making we need to make the best use of these sorts of commissions. Water is an essential of life and having a body that is dedicated to promoting thought leadership in this sector remains crucial in the period ahead.

I will draw here on the contribution of Senator Birmingham: we need to face up to the issues around the Murray-Darling. It is a very difficult issue but it is one to which we have ultimately to find a solution that is in the national interest. Having just spent some time in South Australia with my good friend and colleague Senator Fawcett, who is in the chamber, I was reminded how dependent South Australia is on the Murray and, as you move down the Murray, of the different emotions that the attachment to the Murray-Darling system evoke. We need a solution that is in the national interest. We also need, as Senator Joyce mentioned, an outcome that balances economic, social and environmental outcomes. Having looked at the 2007 legislation, which governs some of these processes, I think it did perhaps lead to some conundrums about balancing the economic, social and environmental. This is a very difficult call, because there are other environmental issues on which we are asked to put the science above the economic and social impacts. As we are seeing in Europe in an entirely different context to do with economic policy, the reality is that you cannot have a set of policies that put one objective above others, because in a complex polity such as ours there are all sorts of interests that have to be balanced.

That said, I look forward to the work I can do with my colleagues, particularly on the Murray-Darling. It is a difficult problem, but it is in the interest of the coalition, which has so much at stake in the health of the Murray-Darling system—the truth of it is that most if not all of the seats that abut the Murray-Darling are coalition seats—to find an approach which balances all stakeholders. I look forward to working with my coalition colleagues on that. That said, this is a non-controversial bill, and I want to put on record my appreciation of the work of the commission. I believe that it has justified its continued existence and hopefully will continue to provide thought leadership.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

I thank all three contributors—Senator Birmingham, Senator Joyce and Senator Sinodinos—to the debate on this bill. I think they all showed a great understanding of the issue about which we are here tonight—the continuation of the National Water Commission through the National Water Commission Amendment Bill 2012.

Three issues that were raised in submissions to the Senate Standing Committee on Environment and Communications require a response. The National Water Commission's Murray-Darling Basin Plan audit function is enshrined in the Water Act 2007. This bill allows for the Water Commission to undertake any function conferred by another law of the Commonwealth; this includes work required under the act. On the reporting role of COAG, it is envisaged that the National Water Commission would formally engage with COAG subcommittees at least annually, including providing regular advice on its activities. The bill provides for the commission to produce a range of strategic studies and advice, including COAG requested studies and analysis, the provision of advice and recommendations about any Commonwealth water program at the minister's request. Further, the Standing Council on Environment and Water is expected to consider this year the national water knowledge and research platform, which will include mechanisms for the improved coordination of water related research. Again, I thank all of the senators for their contributions and I commend this bill to the Senate.

Question agreed to.

Bill read a second time.