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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-12-01 Daily Xml
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Ministerial Statement

WATER TRADING, HIGH COURT CHALLENGE

The Hon. M.D. RANN (Ramsay—Premier, Minister for Economic Development, Minister for Social Inclusion, Minister for the Arts, Minister for Sustainability and Climate Change) (14:08): I seek leave to make a ministerial statement.

Leave granted.

The Hon. M.D. RANN: The South Australian government today issued proceedings in the High Court of Australia in an attempt to force the Victorian government to lift its restrictive 4 per cent cap water trade barrier along the Murray River system. The proceedings assert that the cap is an unconstitutional imposition on trade and is therefore invalid. The High Court challenge forms part of the SA government's campaign to return healthy flows to the River Murray and help save the Murray Lower Lakes and Coorong. The government wants to see free water trading along the river, as I am sure all members do.

It has become increasingly urgent to force these changes as the drought continues and the River Murray suffers more environmental damage. The announcement of our intention to launch a High Court challenge earlier this year has already led to Victoria abolishing its restrictive 10 per cent trading cap. Victoria's 4 per cent trading cap remains, however, and will remain until at least 2014. We want to see that cap also removed urgently. There is a mechanism to protect inefficient and wasteful water practices in Victoria. It is also a trade barrier that severely hinders the ability of governments to purchase water for the environment and critical human needs.

The Rudd government has allocated $3.1 billion to buy back water licences to restore flow to the river system. Because of restrictive trade barriers in Victoria, the vast majority of the water for environmental flow was purchased by the commonwealth from New South Wales. This prompted New South Wales to impose a trade embargo earlier this year. In other words, the 4 per cent barrier in Victoria has had a damaging domino effect. In effect, it has placed a hand brake on the whole reform of the River Murray restoration.

The only state that has an open free trade on water now is South Australia. We want every state to follow our lead, even if we have to force it through court action. The High Court challenge is designed to keep the momentum of reforms going. Water scientists have been telling us for many years that a minimum of 1,500 gigalitres and up to 3,800 gigalitres of flow needs to be permanently returned to the River Murray to ensure its long-term survival and health. In the past few years we have made a very good start towards restoring this level of permanent flow to the River Murray. I am told that, to date, under the Living Murray program, 485 gigalitres of permanent water has been returned to the river, and, under the Water for the Future program, a further 360 gigalitres in water entitlements have been purchased. That means a total of 844 gigalitres has, in effect, been restored to the river for permanent environmental flow, but we need to keep up the momentum.

The truth is that, of all the water extracted from the Murray-Darling Basin, in normal years, 93 per cent of the water that is taken from the River Murray is taken by New South Wales, Victoria and Queensland. Only 7 per cent of the water extracted from the River Murray is taken by South Australia. That is how inequitable the situation is. It should be understood that the Victorian cap is placing undue pressure on South Australia's irrigation community. The same opportunities for trading water should be available right across the basin.

For South Australia, there is much at stake. The state of the Coorong and Lower Lakes shows the urgent need to fix the problems in the Murray-Darling Basin system. The Coorong and Lower Lakes are on the verge of environmental collapse. Record low inflows into the Lower Lakes, caused by prolonged drought and overuse of water in the upstream states, has left large tracts of lake bed exposed.

The South Australian government is continuing to do what it can to try to restore the River Murray, Lower Lakes and Coorong to health. The bioremediation and revegetation work we are undertaking is critical to controlling the serious acid sulphate soil issues confronting the lakes. However, what we need most is to return healthy flows to the River Murray, and this High Court action is part of South Australia's campaign to achieve that.

Let me tell the house that there were people sneering, some years ago, when we as a government took High Court action to stop the former federal government imposing a radioactive waste dump on South Australia, and we won it 3-nil in the courts. We are going to do that again, because this is important for our state—but it is also most important for the health of the River Murray.

What we have seen is, one by one, following agreements made last year, states have legislated to return groups of constitutional powers to the commonwealth and set up a commission that will be able to set a basin-wide cap, and so on. However, there still remains one part of the jigsaw missing. That one part of the jigsaw is the artificial cap that limits any free trade in water imposed by Victoria. Victoria has already buckled and removed one of the caps, that is, the 10 per cent cap on trade. Now we are going after them to remove the 4 per cent cap.

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