Forest Water Licensing

The Hon. J.M. GAZZOLA (15:19): My question is to the Minister for Water and the River Murray. Will the minister inform the council about how the government is managing the water resource impacts of commercial forests?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:19): Water usage is a shared responsibility for the whole community. If we want to have thriving and sustainable agricultural and forestry industries into the future in our state, we must involve all sectors that draw upon our water reserves in determining allocations for water. This is why we have introduced significant and world-leading reforms in the area of forest water licensing. South Australia is now considered to be at the forefront of policy and legislative reform in respect of how we manage the impacts of commercial forestry on water resources.

On 1 July 2014, I declared the Lower Limestone Coast Prescribed Wells Area a declared forestry area that will operate under a new forest water licensing system. This system is believed to be a world first, and I am advised that the Victorian government is following South Australia's example and considering a system for identifying and managing long-term risks to water resources from plantation forestry in a new water act.

The forest water licensing system is designed to provide secure water rights for the forestry industry, a very important industry for our state, and also make commercial forest managers accountable for the management and sustainability of groundwater resources by accounting for the impacts of commercial forestry on reduced run-off and recharge to underground water as well as the direct extraction of underground water by tree roots.

Groundwater, we need to remember, is a vital source of water for South Australia, particularly because we have limited surface water resources outside the River Murray and the Mount Lofty Ranges. It is the key water source for most of regional South Australia, including regional centres such as Mount Gambier and Port Lincoln. It is used across many industries, including agriculture and for things such as irrigation, drinking water for livestock, mining and manufacturing, as well as supplying households with water and input into potable water supply networks.

These reforms will allow us to manage groundwater use more effectively and take into account how it fits with all other water sources available to us. It will also allow us to develop sustainable limits for water extraction while gaining a better understanding of the impact and requirements of dependent ecosystems.

I am committed to the implementation of these reforms. By way of background, in 2009, the South Australian government released a statewide policy framework managing the water resource impacts of plantation forests. This policy framework sets out the principles for managing the hydrological impacts of commercial forests within sustainable limits. As a result of this statewide policy framework, the Natural Resources Management Act 2004 was amended in 2011 to achieve two primary objectives: first, to establish an expanded permit system and, secondly, to establish a forest water licensing system to manage the impacts of commercial forests on prescribed water resources.

Commercial scale forestry plantations account for about one-third of the water allocations in the Lower Limestone Coast Prescribed Wells Area. They are an important asset which in 2011-12 contributed over $3 billion to our state. Thanks to these reforms, commercial forests in the Lower Limestone Coast Prescribed Wells Area can now be managed through the forest water licensing system consistent with the water allocation plan for the Lower Limestone Coast Prescribed Wells Area which was adopted on 26 November 2013.

Prior to the declaration of the Lower Limestone Coast Prescribed Wells area as a declared forestry area, we conducted extensive consultation with stakeholders and the community on the water allocation plan and the forest water licensing system, and it was generally considered that this new licence system would create greater transparency and provide forest managers with a valuable property right.

I also consulted with the Minister for Forests before making the declaration, and commercial forest managers will now be required to obtain a water licence in the same way as other commercial water users in the region such as irrigators and industry. It is important to note that small-scale farm forestry in the Lower Limestone Coast Prescribed Wells Area will be excluded from the licensing requirements because it is not currently a major land use and therefore does not have a significant impact on the water resources at a local scale.

The declaration of the forestry area was to trigger a six-month application period for existing commercial forests. This means that forest managers of existing commercial forests have until 2 January next year to apply for a forest water licence and, when issued with licences, commercial forest managers will pay a water levy of $2.67 per megalitre. The South East Natural Resources Management Board advises that this is currently the same rate paid by irrigators. We plan to extend the system to include commercial forests in the Kangaroo Island and South-East NRM regions outside the Lower Limestone Coast Prescribed Wells area and into the eastern and western Mount Lofty Ranges. This is a very important reform. I am certain that it will create greater transparency and fairness in respect to water use. It will also, importantly, create a much more sustainable future for commercial forestry that continues, and will continue, to have a very important benefit for our state.