Natural Resources Management Levy

The Hon. R.L. BROKENSHIRE (14:51): I seek leave to make a brief explanation before asking the Minister for Sustainability, Environment and Conservation and Minister for Water and the River Murray a question about the natural resource management levy.

Leave granted.

The Hon. R.L. BROKENSHIRE: Further to the minister's interest in my cows last week, I report that I have consulted with Daisy and Maribel—

Members interjecting:

The Hon. R.L. BROKENSHIRE: —and they say they are unhappy with the situation facing farmers in this state, and particularly, in discussion, my cows are very unhappy with what they describe as the fleecing of property owners through a rise in the NRM levy. The decision to raise the levy was not supported by the Hon. John Dawkins, Mr Peter Treloar, the member for Flinders, or by me because we all understand that raising levies is simply a further punishment to be heaped on farmers already feeling the heat from droughts and processor price issues. We know what it is like for farmers who struggle to do business under a state government that, given half a chance, clearly appear they would be willing to tax the very grass that Maribel and Daisy graze on and stand on.

The decision to recover $6.8 million of about $43 million in water planning and management costs from levy payers has not been taken well by South Australia's agricultural industry, nor indeed the councils that are forced to collect the tax on the government's behalf. In fact, in discussion with some councils, I report to the house that they say they are sick of doing the government's work for them, because they are the ones who have to deal with angry residents who are blaming councils when they see the levy added to their rates notices.

Therefore on behalf of my constituents and Maribel and Daisy, I ask the minister the following questions:

1. Has the minister met with the members of the LGA on this matter since their meeting in Coober Pedy and, if so, will the government now agree to remove the requirement for councils to collect the levy and instead use the government's own resources? Yes or no.

2. Is the minister willing to admit that the government's cost-shifting practices not only penalise farmers but have caused this state's farming producers to lose faith in the system, and, sadly, the NRM boards and also the government?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (14:54): I thank the honourable member for his most amusing question, and I would encourage him to check that Daisy and Maribel are not concerned about his cold hands early in the morning—that might be the extent of their concern. Let's be clear: the real pressures facing the dairy industry are not caused by rises in the NRM levy. They are caused by a range of factors. We are facing, I understand, a global glut. Increasingly, dairy farmers are operating in a globalised market with intense competition. Then, of course, there is the behaviour of processors such as, as I understand it, Murray Goulburn, which I understand also is being investigated currently by the ACCC.

These impacts cannot be confused with the regional NRM levies, which are a way of sharing the cost of managing our natural resources, including water. I am informed that NRM boards have managed to ensure that there are no or little regional impacts and the sustainable management of natural resources in the state, in partnership with programs with business, NGOs and the community and the economic viability of primary producers.

Funding secured by NRM levies is used to generate significant regional economic, social and environmental benefits for primary producers, other agricultural businesses and industries associated with mining, and also tourism. The benefits include measures to help control pest animals and plants and water management initiatives to help ensure the sustainable use of the water resources of those regions.

NRM boards invested in social and economic impact assessments to help guide their decisions about the amount to be raised by levies. In the South-East and South Australian Murray-Darling Basin natural resources management regions, the independent assessments showed that, for most farmers, their combined levies (that is, land and water together) are less than 1 per cent of the total cost of running a farm.

While there was some variation between different enterprises, the boards deemed that in most cases the levy would not have a significant effect on food production or agriculture in the region or in the state. In fact, many members of the community, including primary producers, have expressed real concern about a loss of NRM funding and the negative impact that this will have on programs important to them, particularly in the regional areas.

The boards have worked hard to balance funding for natural resources management against an increase in levies. For instance, the South-East NRM Board consulted closely with their local councils on their business plan and listened to community feedback, including council feedback, on how to fairly and equitably apply a levy increase. On that basis, the board decided to change the basis for levy collection from capital value to a fixed rate based on land use, which resulted in most ratepayers paying a significantly lower levy rate.

Residents would have paid, I am advised, an average of $107 per annum and will now instead pay a fixed rate of $69 per annum, and that is because the NRM board responded directly to concerns raised with them by the community. The South-East NRM Board clearly listened to the concerns of farmers and chose a fixed rate based on land use as a new basis for the levy, as I said, and this has now been approved by the Natural Resources Committee of parliament.

When all water-related charges are taken into account, the NRM water levy rates paid by irrigators in our major food and wine producing areas, such as the South-East and the South Australian Murray-Darling Basin, are still low when compared to our competitors interstate. It is important that the honourable member knows this, and I will repeat it for him. For example, the $6.30 per megalitre water levy rate proposed in the SA Murray-Darling Basin for 2016-17 is well below equivalent charges in New South Wales and Victoria.

The Hon. R.L. Brokenshire: I'm not interested in New South Wales.

The Hon. I.K. HUNTER: No, he never is. Facts never interest the honourable member. Facts confuse the situation; they make him think and he does not like that. In the New South Wales Murray, the equivalent charge has been around $10.51 per megalitre, I am advised, assuming full use of entitlement.

In the Victorian Murray, the lowest equivalent charge has been around $11.05 per megalitre. All of this is set out in the ACCC's most recent water monitoring report. Similarly, the $2.58 per megalitre water levy rate proposed in the South-East for 2016-17 is less than half the rate of the most common New South Wales groundwater charges, as outlined on the relevant New South Wales government website.

The decision to partially recover these costs is not just a measure that is consistent with NWI principles, but outside of those principles it is a budget measure that was decided by this government and passed by this house. My department has produced a fact sheet that provides easily digestible, indicative information about what it spends annually on water planning and management activity, and has also prepared information in relation to regional breakdown of spend for the benefit of PPSA and its members.

Again, I say and invite any organisation or representatives of organisations who want to go and drill down into those figures: they can come and do so, either with the NRM boards directly themselves, or with my department. I am very happy for that to happen. In relation to the honourable member's question about the LGA, I believe I met with them in my office about two weeks ago.

The PRESIDENT: Supplementary, Hon. Mr Brokenshire.