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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2008-09-23 Daily Xml
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WATER (COMMONWEALTH POWERS) BILL

Introduction and First Reading

The Hon. K.A. MAYWALD (Chaffey—Minister for the River Murray, Minister for Water Security) (11:04): Obtained leave and introduced a bill for an act to refer certain matters relating to water management to the commonwealth parliament for the purposes of section 51 (xxxvii) of the Constitution of the Commonwealth. Read a first time.

Second Reading

The Hon. K.A. MAYWALD (Chaffey—Minister for the River Murray, Minister for Water Security) (11:05): I move:

That this bill be now read a second time.

It is vital for all South Australians that we secure the long-term future of our communities, our water supplies and our river environment. It is clear that the current governance and planning structures for the Murray-Darling Basin are outdated and will not enable us to deal with the pressures of over-allocation, climate change, environmental degradation and future economic development.

South Australia has been instrumental in the development of a governing framework whereby the commonwealth and other basin states will implement new arrangements for managing the basin’s water resources. As such it is appropriate that we are the first state to introduce legislation to reform the governance arrangements of the Murray Darling Basin.

Initial steps were taken to reform management of the basin in 2007 when the commonwealth enacted its Water Act 2007 and established the independent, expert-based Murray-Darling Basin Authority to prepare a strategic basin-wide plan. This approach, undertaken without the cooperation of all the basin states, relied exclusively on the commonwealth’s own constitutional powers and had significant limitations. In particular, the authority and Murray-Darling Basin Commission continued to operate side by side, under complex and inefficient arrangements and the strategic basin plan could not address the management of water to meet critical human needs.

On 3 July 2008 the commonwealth and the basin states—New South Wales, Victoria, Queensland, South Australia and the Australian Capital Territory—signed the historic Agreement on Murray-Darling Basin Reform committing to a package of reforms to meet the future needs of the basin and to protect and enhance its social, environmental and economic value. Central to the reform package is the referral of powers by the basin states to the commonwealth to allow it to amend the Water Act 2007 to:

abolish the Murray-Darling Basin Commission and transfer its functions to the Murray-Darling Basin Authority;

provide for a comprehensive basin plan which will now also have a priority focus on management of water for critical human needs, as well as integrated management of the basin water resources, including addressing water quality, salinity management and environmental watering.

The reforms mean the authority will be able to plan strategically for periods of low water availability to ensure there is enough water put aside to support the delivery of water for critical human water needs throughout the system; and:

extend the application of water market rules and water charge rules and the associated regulatory role of the Australian Competition and Consumer Council (ACCC) to all entities and transactions within the basin to facilitate more efficient water trading across the basin and provide for any state to ‘opt in’ to apply the rules outside the basin.

Other aspects of the reform package include:

an amended Murray-Darling Basin Agreement that includes the new governance arrangements to give effect to the Agreement on Murray-Darling Basin Reform;

the amendment or repeal of existing commonwealth and state Murray-Darling Basin acts and the making of consequential amendments to other basin state legislation; and

the Agreement on Murray-Darling Basin Reform—Referral, which will complement any state referral legislation and specifies the nature of the legislative scheme.

These reforms will, for the first time, ensure that South Australia has access to the upstream storages of its choice, including Hume and Dartmouth dams, to store water to meet its critical human water needs and for private carryover. This would allow the state to carry over and store around 300 gigalitres of water for critical human needs (18 months' supply) and to deliver this water in times of low flows, reducing the risk of a major failure in the supply of potable water to South Australia. Without these reforms, South Australia has no ongoing access to storage.

These reforms will also establish a three-tier system for sharing water in the River Murray system and key tributaries under normal low water availability and extreme drought conditions. These reforms will enable the authority to plan strategically to ensure there is enough water put aside to support the delivery of water for critical human water needs throughout the system during periods of low water availability. The basin states will be able to plan and establish arrangements to determine, store and deliver state water shares under dry conditions.

The Agreement on Murray-Darling Basin Reform—Referral commits the South Australian government, along with the other basin states, to use its best endeavours to pass referral legislation and amend existing state acts in time for the reforms to commence on 1 November 2008. Today I am initiating the critical next step in the reform package by introducing two complementary bills. The first bill is to refer certain matters relating to the South Australian Murray-Darling Basin to the commonwealth parliament for the purposes of section 51(xxxvii) of the Constitution of the Commonwealth.

Water (Commonwealth Powers) Bill 2008

This bill defines the provisions to be referred which are the text of Parts 1A, 2A, 4, 4A, 10A and 11A as set out in the tabled text and which are the provisions in Schedule 1 of the proposed commonwealth’s Water Amendment Bill 2008. The bill also refers certain subject matters whereby the commonwealth can make future amendments to any referred provisions of the Water Act 2007. The commonwealth will be bound by conditions to seek approval of states prior to making such amendments as set out in Part 1A of the referred text, and the Agreement on Murray-Darling Basin Reform—Referral.

The amendment subject matters referred include: the powers and functions of commonwealth agencies that relate to basin water resources and are conferred by or under the Murray-Darling Basin Agreement; the management of basin water resources to meet critical human needs; water charging and water market rules in relation to basin water resources; and the transfer of assets, rights and liabilities of the Murray-Darling Basin Commission to the Murray-Darling Basin Authority.

As is standard with referrals of power, the bill, together with complementary provisions in the referred text and the Agreement on Murray-Darling Basin Reform—Referral, allows states to withdraw their initial reference of powers and their subject matter amendment reference.

The bill provides for the state to terminate its initial reference of power at any time through the Governor fixing a date by proclamation. This ensures all parties have notice of the intention of any state to withdraw their reference.

It also allows for the state to terminate its amendment reference and still remain a referring state. This can occur where all states terminate the amendment reference at the same time, where the commonwealth proceeds with an amendment to a referred part of the act with which the state does not agree, or where the commonwealth proceeds with an amendment to specified sections of the Water Act 2007.

I will now give an outline of the proposed referral text.

Referral Text

Part 1A—Murray-Darling Basin Agreement

The text provides for the Murray-Darling Basin Agreement to be attached as a schedule to the commonwealth Water Act 2007. It will no longer be a schedule of the state Murray-Darling Basin acts. Amendments to the Murray-Darling Basin Agreement will be developed and agreed by the Ministerial Council and the schedule will then be updated by regulation.

Key changes to the Murray-Darling Basin Agreement give South Australia, for the first time, access to upstream storages of our choice to store water to meet our critical human water needs and for private carryover, and establish a three-tier system for sharing water in the River Murray system and key tributaries under normal, dry inflow and extreme drought conditions.

The text defines what it means to be a referring state and the process for states to terminate their initial reference of powers and their amendment references. The text gives the authority functions, powers and duties previously undertaken by the Murray-Darling Basin Commission under the agreement. It also extends the authority’s powers under part 10 of the act to enter land for inspection and monitoring purposes and to gather information where reasonably necessary for the performance of its functions under the agreement. The Murray-Darling Basin Commission currently exercises similar powers.

It also requires the authority, if so provided for under the Living Murray Initiative, to manage the water rights and interests held under the Living Murray Initiative.

Part 2A—Critical Human Water Needs

The new arrangements under the agreement and the referral text set up a three-tier system for sharing water. Tier 1 occurs in periods of normal water availability, and the usual water sharing arrangements will apply. Tier 2 occurs in periods of low water availability, and the Basin Plan will provide for arrangements to ensure sufficient conveyance water to deliver critical human water needs.

The ministerial council (under the agreement) will also develop a schedule setting out how state water shares will be determined, delivered and accounted for under tier 2 arrangements. Under extreme and unprecedented circumstances of water availability, which will be tier 3, the ministerial council will determine the sharing of the available water and contingency measures.

The Basin Plan will specify the conditions under which tier 2 and tier 3 water sharing arrangements will apply and to specify water quality and salinity trigger points that, when reached, require the authority to formulate and implement an emergency response.

The text requires the Basin Plan to take into account critical human water needs as the first priority water use in developing the plan. It also expands the mandatory content of the Basin Plan to sharing arrangements to ensure that there is sufficient ‘conveyance’ water available in the River Murray System to distribute critical human needs water to South Australia, New South Wales and Victoria.

The plan also will include monitoring, risk management planning, arrangements for storing water from one year to the next and the development of a policy to enable water to be reserved to meet any shortfall in conveyance water. For the first time, this will take into account inputs from the key tributaries of the Murrumbidgee, Darling and Goulburn rivers as well as the River Murray system, which were previously excluded from water sharing arrangements. This means the authority will be able to plan strategically for periods of low water availability to ensure that there is enough water for the delivery of critical human water needs throughout the system.

Responsibility for securing and providing the volume of water required for critical human needs remains with the respective basin states. Coupled with South Australia’s right to store water, this will allow the state to prudently manage its River Murray supply during dry conditions.

South Australia’s minimum entitlement flow of 1,850 gigalitres will be preserved under the new arrangements, as existing state water shares can be altered only with the consent of all basin jurisdictions. The text enables the authority to enter land for compliance purposes where necessary to enable it to monitor compliance with tier 2 water sharing arrangements under this part of the Basin Plan, just as it currently can do for other parts of the Basin Plan under the commonwealth Water Act 2007.

Part 4—Australian Competition and Consumer Commission (ACCC) and water charge and water market rules

The text provides for a uniform approach to regulation of water charging and water market rules by extending the role of the ACCC within the Murray-Darling Basin. These changes will support more effective water trading across the basin, which will benefit South Australian irrigators.

Water market rules relate to the actions of irrigation infrastructure operators and seek to free up trade by ensuring that policies or administrative requirements of infrastructure operators are not a barrier to trade.

The water market rules and the water charge rules provisions under the commonwealth Water Act 2007 will now apply to all water service providers that charge regulated water charges, not just those entities and transactions within the scope of the commonwealth’s constitutional powers.

The ACCC will have the capacity to determine or approve all regulated water charges in the basin, excluding charges relating to urban water supply activities beyond the point at which the water has been removed from a basin water resource.

Part 4A—Extended operation of Basin Water Charge and Water Market Rules

Basin states can opt to extend the geographical application of the ACCC’s regulatory role for water markets and water charges to areas outside of the basin to achieve a uniform approach to regulation in their state.

Part 10A—Transitional Provisions

The text includes transitional provisions to provide for the transfer of River Murray operations assets and liabilities from the Murray-Darling Basin Commission to the authority; transfer of staff leave arrangements; staff appointments; and other matters necessary to enable the authority to adopt the functions of the Murray-Darling Basin Commission.

Part 11A—Interactions with State Laws

The text enables commonwealth and state water laws to operate concurrently. It also enables a state to displace the operation of the commonwealth Water Act 2007 to exclude certain matters or to avoid direct inconsistency arising with a provision of a state law. The intent of these provisions is to allow displacement where there are unintended consequences of the commonwealth Water Act 2007. States have committed in the Agreement on Murray-Darling Basin Reform—Referralto only use the provisions where this is the case.

It is critical to the future water security of South Australia that the parliament supports this proposed bill.

The referral of powers is an essential element of an overall legislative reform package which will bring about changes in governance and basin-wide strategic planning that will not only address over-allocation issues and improve the provision of environmental water but will also focus on planning and management of water for delivery of critical human needs.

These changes will provide significant benefits to South Australia and the management of the Murray-Darling Basin.

The reforms will give South Australia access to the headwater storages of Hume and Dartmouth dams, to store water to meet its critical human water needs and for private carryover. This would allow the state to carry over and store around 300 gigalitres of water for critical human water needs and to deliver future flows. Access to storage for carryover of water for private purposes will benefit South Australian irrigators.

Passing this bill will underpin a single Murray-Darling Basin Authority, which will have two important roles:

the development, implementation, monitoring and enforcement of the basin plan under the Water Act 2007for which it is responsible to the commonwealth minister; and

implementing the current functions of the commission to manage the shared surface water resources of the basin on behalf of the basin states.

A strategic Basin Plan will be developed that will not only set long-term sustainable 'caps' on how much surface and groundwater can be extracted in order to address over-allocation issues but will now also have a priority focus on management of water for critical human needs.

The Basin Plan will develop an environmental watering plan to improve the environmental health of all Ramsar and other key environmental sites in the basin. This will be integrated with the Living Murray Initiative. Additionally, the Basin Plan will identify risks to basin water resources, such as climate change, and develop strategies to manage those risks. The Basin Plan will develop a water quality and salinity management plan, which will ensure the health of the river system is maintained.

These are complex matters, which require rigorous scientific investigation and innovative planning to develop the necessary solutions and, as such, it will take two years to prepare the Basin Plan. In the interim, the authority is to work with the basin states as a priority to establish any triggers and management requirements necessary under the three-tier water sharing arrangements.

These are medium to long-term reforms and will not address the immediate responses needed to deal with the current drought, which are being addressed through other mechanisms. However, they will ensure that we are better prepared to manage the basin water resources under dry inflow conditions and the impacts of climate change in the future.

Any delay in passing this legislation could prevent the commencement of the authority’s functions over River Murray operations on 1 November 2008. Without all states adhering to this timeline, the new governance scheme will not apply at the time of commencement.

South Australia is once again leading the way as the first state to introduce this legislation, and I call upon the members of this place and the other place to ensure that we can deliver on the new governance arrangements by 1 November 2008 and usher in a new culture and practice of cooperative basin-wide management and planning.

Finally, for the purposes of the Water (Commonwealth Powers) Bill 2008 and, in particular, the definition of 'tabled text' under that measure, I table the text of the proposed Water Amendment Bill 2008 for a commonwealth act.

I table a detailed explanatory memorandum for the proposed Water Amendment Bill 2008 of the commonwealth.

I seek leave for the detailed explanation of clauses for this bill to be inserted into Hansard without my reading it.

Leave granted.

Explanation of Clauses

1—Short title

This clause is formal.

2—Commencement

Clause 2 provides that the measure will be brought into operation by proclamation.

3—Definitions

Clause 3 defines certain words and expressions used in the proposed Act.

4—Reference of matters

Clause 4 deals with the references to the Commonwealth Parliament.

Clause 4(1) makes the reference.

Clause 4(1)(a) ('the initial reference') refers the matters set out in Schedule 1 of the text that is tabled in the Parliament in conjunction with the introduction of this measure. This scheme will enable the Commonwealth Parliament to enact amendments to the Water Act 2007 in the terms, or substantially in the terms, of Schedule 1 of the tabled text. The expression 'substantially in the terms' of the tabled text will enable minor adjustments to be made to the tabled text.

Clause 4(1)(b) ('the amendment reference') refers various matters to the Commonwealth Parliament in connection with the future amendment of the provisions enacted in reliance on the initial reference. The referred subject-matters are limited to the following:

(a) the powers, functions and duties of Commonwealth agencies that—

(i) relate to Basin water resources; and

(ii) are conferred by or under the Murray-Darling Basin Agreement;

(b) the management of Basin water resources to meet critical human water needs;

(c) water charging in relation to Basin water resources (other than for urban water supply after the removal of the water from a Basin water resource);

(d) the transformation of entitlements to water from a Basin water resource to enable trading in those water entitlements;

(e) the application, in relation to water resources that are not Basin water resources, of provisions of the Water Act 2007 dealing with the subject-matters specified in paragraphs (c) and (d) (being an application of a kind that is authorised by the law of this State);

(f) the transfer of assets, rights and liabilities of the Murray-Darling Basin Commission to the Murray-Darling Basin Authority established by the Water Act 2007, and other transitional matters relating to the replacement of that Commission.

Clause 4(2) makes it clear that the reference of a matter has effect only to the extent that the matter is not otherwise within the legislative power of the Commonwealth Parliament and to the extent that the matter is within the legislative power of the State Parliament.

Clause 4(3) removes a possible argument that 1 of the references might be limited by the other.

Clause 4(4) makes it clear that the State Parliament envisages that the Commonwealth Act can be amended or affected by Commonwealth legislation enacted in reliance of other powers and that instruments under the Commonwealth Act may affect the operation of the legislation otherwise than by express amendment.

Clause 4(5) specifies the period during which a reference has effect.

5—Termination of references

This clause deals with the termination of the period of the references specified under clause 4 (namely, the period ending on a day fixed by the Governor by proclamation). The clause enables the period of both references to be terminated or only the period of the amendment reference.

6—Effect of termination of amendment reference before initial reference

Clause 6 makes it clear that the separate termination of the amendment reference does not affect laws already in place. Accordingly, the amendment reference continues to have effect to support these laws unless the initial reference is also terminated. However, the continuation of the reference in relation to such a law will not apply to an amendment of the Water Act 2007 that is excluded from the operation of this provision by the proclamation that terminates the amendment reference.

7—Evidence

Clause 7 provides for the accuracy of a copy of the tabled text to be certified by the Clerk of the House of Assembly of South Australia. Such a certificate is evidence of the accuracy of the tabled text and that the text was in fact tabled as contemplated by the Bill.

Debate adjourned on motion of Ms Chapman.

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