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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2008-10-30 Daily Xml
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MURRAY-DARLING BASIN BILL

Second Reading

Adjourned debate on second reading.

(Continued from 29 October 2008. Page 505.)

The Hon. SANDRA KANCK (11:04): Continuing on with the remarks I was making last night, I point out that, with the realisation (which seemed to be such a surprise to so many) that the Murray-Darling Basin was being over-exploited has come a lot of finger pointing. When the Natural Resources Committee visited the upper parts of New South Wales and the lower Queensland areas of the basin, our first stop was at Menindee where we met the members of DRAG (Darling River Action Group). They told us that as we went northwards those irrigators in the north of New South Wales and southern Queensland would point the finger at them, and that is precisely what happened. The irrigators at Moree, Goondiwindi and St George all had their pet theories about the Menindee Lakes system, and this ranged from putting a barrier halfway through one of the lakes, so that the lakes could only fill up partly, to putting in a channel connecting one to another so that the smaller ones would fill and not the larger ones.

With each of the people I questioned, it was very interesting how I could not get them to compare apples with apples, so intent were they on finding someone else to blame. For instance, when we were at Goondiwindi I asked the irrigators about their justification for their perspective and, as an example of the notes I took, they said that the evaporation from Menindee Lakes when 80 per cent full is 700 gigalitres per annum. They then contrasted it with their own valley by saying that it uses 300 gigalitres a year. I asked, 'What is your evaporation?' and they could not tell me. It seems to me that we are dealing with areas that are even further north than Menindee, which means that they are subject to the greater heat of the tropics.

Those areas would be having similar amounts of evaporation. At each of these places, when I asked those irrigators what their evaporation was compared to Menindee none could tell us, but they were prepared to have a go at Menindee. At St George we met with a group called Smartrivers, which is a combination of the St George water harvesters and the Dirranbandi district irrigators. Smartrivers was formed in 2000 when water allocation management plans were put in place by the Queensland government as part of its responsible approach to the cap. The Smartrivers group took the Queensland government to court and won, so its allocations were not reduced one iota.

However, that group is now prevented from building more of these ring dams, but members of that group proudly told us that they are not prevented from deepening what they have. They represent Cubby Station, which is one of the irrigators in the Smartrivers group. They told us that Cubbie Station is an easy target because it has one owner. If, as they said, there were 30 irrigators owning that plot of land there would not be the same angst about that particular farm, or whatever you would like to call it. However, it is because it has one irrigator and people see one person as making a lot more profit that it becomes a target from those of us in the south.

From the perspective of a South Australian, though, what I heard from these irrigators is that every one of their triumphant wins is a loss to us. The consequence of a failure by everyone in the basin to take into account all the evidence about over-extraction combined with climate change has led to sudden, drastic and panicked action in some regards and a complete failure to act in others. Lake Bonney in the Riverland was one of the earliest communities in South Australia required to make sacrifices on behalf of the rest of the water users in this state. A report just released by the South Australian Murray-Darling Natural Resource Management Board has finally recognised the concerns that the Save Lake Bonney group raised when the water supply into the lake was shut off 12 months ago.

The report, with the title 'Potential impacts from extended closure of Lake Bonney', advises that scientists recommend that Lake Bonney should not be shut off longer than 12 months. In fact, it is getting close to 13 months since it was shut off. That report says that fresh water should have gone into the lake in early October 2008. It says that the government knows there could likely be a major fish kill by this summer, with consequent odour problems for the people of that town (just as the Save Lake Bonney group predicted) which, of course, would have disastrous consequences on tourism for that town.

Acid sulphate soils are a possibility, as is the risk of algal blooms. The last time I went through that area was about a month after it was closed off and you could see an increase in algae even then. The report also recognises that there is now very significant exposure of Aboriginal human remains. That report basically comes to the conclusion that Lake Bonney needs an environmental flow. Barmera was a town that depended on tourism for its economic stability, and it has been robbed of that. Of course, Barmera is just one of many places in this state that is suffering.

The Lower Lakes and the Riverland in general are now feeling the pinch. I must stress that this is not about pleading a special case. Australians have proved over and again that, if their leaders convince them they are necessary, they will make sacrifices. If the sacrifices make sense, and if the sacrifices are seen as being shared by all in the community, South Australians will make those sacrifices; but this crisis has been marked by a failure to do both those things. Our current system of water restrictions is manifestly irrational and unfair. Basically, all the restrictions are aimed at our gardens, and our food-producing. Industry is basically left intact. It is not being asked to make the sacrifices, even though domestic use is such a very small part of the system.

Most people are willing to do their bit, as I say, even though they do know that our share of the Murray is a minuscule portion of all the water resources in the Murray-Darling Basin. However, indoor water use, showers, spas and dishwashers are all completely unregulated; and, despite all the rhetoric about an unprecedented drought, 375 new swimming pools were approved in the eastern suburbs of Adelaide alone last year. In the previous year it was 355, so you look at that number increasing every year. It is just sheer hypocrisy, and it has serious consequences.

At the same time as the Minister for Water Security and the Premier were referring to an unprecedented drought, managed investment schemes were planting new almond groves along the Murray. When the Natural Resources Committee visited the Lower Lakes, I think last month, I was shocked to see a new pipeline going into the grape-growing area, the name of which will come to me in a minute. This new pipe is being put in by large grape producers on top of all that is already there. It is anticipating the Wellington weir. They are putting in this pipe so that they can get less saline water above the Wellington weir to water more grapes that we do not really need.

This was happening at the same time that dairy farmers in the Lower Lakes were out crawling over the mud to drag pipes to a very quickly receding waterline. In the meantime, north of here—in those areas above Menindee—we see water in large amounts being held in those ring dams. We have the Coorong (a world class wetlands; Ramsar listed), which is choking on salt and we have interstate irrigators hoarding water.

In 2006-07, a total of 487,000 tonnes of raw cotton (valued at around $A832 million), was exported and, because of the drought, this was just 64 per cent of what they describe as 'normal' production. I guess it is a case of every cloud having a silver lining because, obviously, climate change and drought has slowed cotton production. The Australian lint/cotton production, in 2007-08, was forecast to be only 116,000 tonnes, which will be the smallest harvest since the 1982-83 season. However ABARE reported in March that the irrigation dams supplying water to the Australian cotton growing regions were nearly 40 per cent full in mid-February 2008, compared with only 9 per cent at the same time last year, so there is an indication of that hoarding.

We need to look at how much water 40 per cent is. A Murray-Darling Basin Commission report into on-farm water found that the total storage capacity above Menindee Lakes was 5,192 gigalitres; 2,999 gigalitres of this was held in ring tanks, and another 2,050 gigalitres of private storage capacity exists below Menindee Lakes. These private storages that we are talking about dwarf the capacity of the Menindee Lakes.

We also know that Cubbie Station is 40 per cent full at the present time; that is, 200 gigalitres of water. Cubbie Station alone can hold three-quarters of the Menindee Lakes storage. Although cotton is not what was being grown at the time that the Natural Resources Committee visited Cubbie Station, they had been unable to plant cotton because the rains that fell in late December were too late for them to plant the cotton, which required an earlier planting, I think, in around September or October. Cubbie Station is not the only culprit as far as storage is concerned; I mentioned those figures that the Murray-Darling Basin Commission has given, but the New South Wales government does not know how much water is being held in ring dams in that state. It is an estimate, and it could be worse than we think.

The best guesstimate is that it is likely that something in the region of 2,000 gigalitres of water was being held above Menindee earlier this year, and yet it has been so easy for so many people to blame Menindee. The same Murray-Darling Basin Commission report noted that up to 50 per cent of stored water can be lost by evaporation before use. In fact, the annual evaporation from ring tanks was estimated to be 650 gigalitres per annum; a third of the 1,850 gigalitres that South Australia is guaranteed in a normal year, and three times Adelaide's annual average water use, so I think we need to be clear about where the finger should be pointed.

The Minister for Water Security has said that, if some of that water was released from Southern Queensland and Northern New South Wales, it would not get here because most of it would seep or evaporate. These are what are called transmission losses, but the Darling and the Murray rivers are not drains; they are (at least in some parts) ecosystems, so that when that water seeps—as if we talk about this being a bad thing—it is watering some of those ecosystems. We have to remember that there are some very stressed gums along those watercourses that desperately need a top up. I do not think that we should simply say, 'Okay, transmission losses: bad, therefore we should not allow this water through.' It does have a part to play in keeping alive what is now a very imperilled ecosystem.

The fact is that, if the water is able to be moved through these areas and some of that water is able to seep through the base of the creeks and the rivers, it does mean that, when there are substantial flows, more of the water will flow through the system; because, if you have a dry riverbed, what happens is that it soaks up the water. Therefore, when we do get a large rain event—in Southern Queensland, for instance—much of it will not get through to us precisely because the riverbeds have been allowed to dry up. Having a certain amount coming through will ensure that with a large rain event more of that water will come through to us.

It is also worth noting that the inflow to the Murray from the Darling at Wentworth has declined to 56 per cent of natural levels, and that is another significant loss to the ecosystem. The point is that we have a system in crisis. The environmental crisis has already caused economic and social problems but, somehow, because it is at the heart of it an environmental crisis—and we do not put a value on the environment as we do on irrigated crops—governments have been slow to respond from an environmental perspective. It does seem strange that our federal government can take this nation to war—as it did in Iraq—at a cost of billions of dollars and the possible loss of lives.

We are in the midst of a global financial crisis at the moment and, in a matter of days, the federal government may decide to spend $10 billion and issue deposit guarantees but, when it comes to the Murray-Darling Basin and the crisis there (that is almost intractable), no-one is willing to say, 'Nationalise the water. Declare a state of emergency. Seize any non-essential water. Make some decisions about appropriate crops.' We step back from that because it is about irrigation and making money; whereas the environment, generally speaking, is not seen to make money for us. That it is an important context for us to consider when we are dealing with this legislation.

I know that some of the speakers on the Water (Commonwealth Powers) Bill we were dealing with last night expressed concerns about the fact that it was template legislation. We have certainly had similar template legislation over a number of years now, in relation to the electricity system. In fact, the last lot of such legislation came through here about two or three months ago. Again, I expressed my outrage that we have legislation coming into this place that we are not permitted to amend, and this is in the same category—that is, the Water (Commonwealth Powers) Bill. As regards the Murray-Darling Basin Bill (on which I am speaking), I suspect we may be able to include amendments to that. However, there is always an enormous frustration when representatives of state governments get together and make all these decisions without the input of the parliament, and we are expected to pass it.

Nevertheless, in this case, the legislation that we are dealing with, to attempt to avert the worst of the crisis in the Murray-Darling Basin, is worth supporting. It may not be as good as it could be and, if that is the case, I suspect that in a year or two we will be back to deal with it again. After all, that is what happened (not with legislation) with the cap when that was first proposed in 1995. That was reviewed but, as I said last night, we were still too lax in the amounts that we allowed to be extracted from the system. It is something that is now being evaluated again to see whether we can further reduce the extractions from the system.

I indicate Democrat support for the Water (Commonwealth Powers) Bill and the Murray-Darling Basin Bill. We recognise that, although they may not be perfect, we do have a dire situation and we must take urgent action.

The Hon. S.G. WADE (11:26): I rise today to speak to this bill and, in common with other contributors, to refer cognately to both the Water (Commonwealth Powers) Bill and the Murray-Darling Basin Bill. I do not propose to deal with the detail of the water management issues that led to this bill as those matters have been well covered by members in this chamber and the other place. Instead, I would like to consider these bills in the context of Australian federalism. I am a federalist but not out of an archaic concern for so-called state rights; after all, government exists to serve the interests of the people and any rights that they have fundamental to the collective rights of its citizens.

It is the rights of citizens that federalism protects. Citizens have the right to retain as much autonomy over their own lives as possible and to have decisions made as close as possible to them. As a federalist, I am alert to the pull of the centre in a federal system, and I am suspicious of the transfer of powers from the states to the federal government. Nonetheless, I support these bills because, as a federalist, I consider that the closest possible point for citizens able to effectively undertake whole of management catchment of a multi-state river system is the national government.

I do not assume that the commonwealth is more competent or more morally virtuous. The commonwealth is simply better placed to mediate the range of interests in the basin. This is not a recent revelation for South Australians. South Australians have been fighting for national involvement concerning the River Murray since the late 1800s. The battle lines were drawn between the colonies (as they then were) as early as 1881.

South Australia claimed the right to maintain navigability and urged an agreement on water sharing. During the Federation debates, South Australia evolved its position from one of asserting its right to water to insisting on the commonwealth having power over the Murray. In the 1897 and 1898 conventions, South Australia persisted with amendments to increase commonwealth control. The South Australian delegation was very talented and very diverse. It was also credited as being the most united on this issue. It was at one that the commonwealth should take control over the River Murray.

Ultimately, there was a compromise—a compromise which endorsed the status quo with limited commonwealth authority and the states retaining control of rivers within boundaries. The Bulletin magazine of February 1898 commented:

Under the compromise, South Australia would be wholly at the mercy of the other provinces which could mop up all the available water and leave their barren neighbours with nothing but a streak of sand.

I suggest that they were prophetic words. The problem we have had in the management of the River Murray over the past 100 years is not a case of the failure of our federal system. It is a case of a flaw in the design of the federal system which was recognised in its construction but has yet to be addressed. Effectively, through this and related actions, we are moving closer to the vision of the South Australian members of the constitutional conventions, our founding fathers.

However, the mission is incomplete in two respects: the veto of the states has not been effectively removed and the new authority is not sufficiently independent. Some of our colleagues in the commonwealth parliament try to portray the commonwealth in this case as a white knight who is coming to the rescue of incompetent states. However, if the 1900s are testament to the failure of the states to develop an effective cooperative regime to manage the catchment, they are also testament to a commonwealth which has been tardy in acting in the nation's best interests.

A conference in Cowra in 1902 criticised the new commonwealth government for failing to use its legislative powers to resolve differences between the states about the sharing of water resources of the Murray. By 1904, the prime minister, John Watson, asked the states whether they would hand over control of the Murray to the federal parliament. South Australia had already appropriated a thousand pounds to begin litigation on the River Murray.

Instead, the cooperative regime which evolved into the Murray-Darling Basin Agreement was adopted. South Australia was dissuaded from litigation by two actions of the commonwealth. In 1906, the Premiers' Conference reached agreement on a scheme for locking the Murray. Secondly, the commonwealth established the short-lived and ill-fated Interstate Commission. Section 17(1) gave the commission wide powers of inquiry into works and diversions and the maintenance in improvement of navigability.

The agreement was a political solution finally reached in September 1914. Ironically, by the time the locks authorised by that agreement—and for which South Australia had fought so tenaciously—were constructed, the navigation trade was effectively dead. The commonwealth's involvement in the Murray issue, as I said, started as early as 1902. I would remind the council that a commonwealth commissioner chaired the Murray-Darling Basin Commission from 1915 to 1992, when the parties chose to appoint an independent president.

Throughout the history of the Murray-Darling Basin Agreement, then, the commonwealth has been a partner except for the fact that it contributes only the capital infrastructure costs and not the recurrent costs of the commission. The commonwealth shares in the responsibility for the failures as well as the successes of the Murray-Darling Basin Agreement. South Australia's interest in the Murray increasingly over this century has turned to developing areas of consumptive use. I refer to a document printed in Adelaide in 1926 entitled Memoirs of Simpson Newland CMG in which he stated:

Somehow as time went on, the national spirit of the people changed and petty rivalries between the colonies as to how much each was entitled to use hampered progress. Thus it came about that Victoria and New South Wales entered into large schemes of diverting the river from the River Murray and its tributaries. Successive governments of South Australia played ignominious parts, spending years attending useless conferences discussing and wrangling with our sister states over the division of the water calculated to flow for given periods through certain gauges. As far as Victoria and New South Wales were concerned, the true object of these conferences was to discover how little South Australia could be induced to accept and to gain time to push on with their works in their respective states.

I would note that, in the constitutional conventions and through the 1900s, South Australia has relied on vigorous representation by its elected representatives. In 1987, the commonwealth did accept its responsibilities to promote national coordination of a multi-state resource when it persuaded the parties to add a ministerial council to the Murray-Darling Basin structure. A commonwealth minister chairs the ministerial council. However, the Howard government was the first commonwealth government to accept the logic of the South Australian Constitutional Convention delegates and seek to assume primary responsibility for the River Murray. The Howard government introduced major reform in January 2007.

The commonwealth sought a referral of power from the states to the commonwealth so that it could undertake this role. Following the announcement of the National Plan for Water Security on 27 January 2007, the states and the ACT held a summit to discuss the proposal in February 2007. At the summit, New South Wales, South Australia, Queensland and the ACT agreed to cooperate with the new arrangements, but Victoria held out. With wall-to-wall state Labor governments with one eye on the upcoming federal election and one eye on protecting the Labor brand, the states lost valuable time.

Premier Rann, also the national president of the ALP, was half-hearted in his protestations. On 24 July, the then prime minister, John Howard, announced that he would proceed with the introduction of a reform bill based on the commonwealth's existing constitutional powers, that is, without relying on the states to refer power to the commonwealth. The commonwealth was to pursue a new independent Murray-Darling Basin authority to be established on current powers.

So, here we are today, 21 months later. Labor has, both in opposition and now in government, delayed and opposed reform. After standing in the way of rural reform under the federal Liberal government, we are now seeing at least a partial embrace of the reforms of the previous Liberal government. The bill provides for a single authority, greater transparency and an agreed national framework for water allocation. The opposition supports those reforms.

However, the bills are disappointing in a number of areas. In the context of my focus, that is, federalism, there is a lack of a true national referral of powers. This is a lost opportunity to deal with a flaw in our federal system. The bills give effect to the Intergovernmental Agreement on Murray-Darling Basin Reform signed by the Prime Minister and first ministers on 3 July 2008 but it is largely based on the National Water Plan for Water Security announced by the Howard Liberal government in January 2007.

The Rudd Labor government already could have had a functioning basin water authority working on a basin plan for at least six months if it had acted on the basis of the Water Act 2007, but Labor has ensured that there will not be a functioning basin authority until 2009 and no basin plan until 2011 at the earliest. Under the regime, the independent authority can act under an emergency situation only if every state agrees. There is an incredible process of consultation with veto powers all the way through. Clause 13 (6) of the Water Amendment Bill 2008 provides:

A resolution before the ministerial council will be carried only by unanimous vote of all ministers present who constitute a quorum.

The government is not serious about referring powers. It is retaining the veto power. That has been a problem for the past 100 years, and it will continue to be a problem as we go forward.

In passing the 2007 Water Act, the Howard Liberal government showed, however, that it was not willing to wait for referral. Even in the absence of referral of powers, the commonwealth showed that it was willing to accept its responsibility to manage a national resource by using its current constitutional powers to deliver a national response to a national issue. Now, without the support of a Labor state such as Victoria, the Rudd Labor government is on notice. It, too, must be creative in using its other powers to deliver outcomes for the river.

I will mention three constitutional heads of power. First, the corporations power could allow the commonwealth to regulate irrigators and other river users where they operate through a corporation. The external affairs power could be used to implement international treaties ratified by the Australian government. Two relevant treaties are the Convention on Biological Diversity and the Convention on Wetlands of International Importance Especially as Waterfowl Habitat. The final power, of course, would be the power in relation to interstate trade and commerce.

While I do not support commonwealth empire building by the expansive interpretation of constitutional powers, this on the other hand is a case where the primary role of the commonwealth is now accepted and the commonwealth needs to use its powers to its fullest extent to discharge its responsibilities. The commonwealth should also look at its powers under current commonwealth laws. For example, the Environment Protection and Biodiversity Conservation Act 1999 and the Natural Heritage Trust of Australia Act 1997 could provide the ability for the commonwealth to participate in schemes for the protection of environmental flows. In terms of the commonwealth power to intervene, it may well be that the EPBCA Act will be triggered in some circumstances. Whilst I appreciate that we need to avoid contention and litigation over commonwealth powers, neither can we afford continued commonwealth timidity and inaction.

I will not take the time of the council to detail my concerns with these bills in terms of the legislative process and the parliamentary process. The member for Heysen in the other place has done that more than adequately. However, in conclusion, in this bill the Rann government has failed to effectively stand up for South Australia. It has failed to complete the unfinished business of the South Australian delegations to the Constitutional Convention. The Rann government has chosen the interests of team Labor over the interests of South Australia. I suspect it will take the election of a Martin Hamilton-Smith government before we see a government that will finish the unfinished business of our founding fathers.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (11:40): I thank honourable members for their contribution to this debate. My colleague the Hon. Carmel Zollo last night summed up the responses to most of the contributions to these two bills. We have just had the Hons Sandra Kanck and Stephen Wade make some comments today. I thought the Hon. Mr Wade started off pretty well by providing background of the history of the River Murray issue as it has evolved during the history of Federation. It is just that he started to lose his way a bit towards the end. It seems that, the closer we get to the present, there is a fair bit of reinvention of history taking place.

The Hon. Mr Wade talked about commonwealth control of the river and mentioned some of the heads of powers that the commonwealth might use in relation to this issue, but he forgot to mention section 100 of the commonwealth Constitution, which reads:

The Commonwealth shall not, by any law or regulation of trade or commerce, abridge the right of a State or of the residents therein to the reasonable use of the waters of rivers for conservation or irrigation.

That was one of the key clauses of the Constitution that delayed the Federation of this country by a decade or more, and it has been a problem ever since. But to suggest that somehow or other the South Australian government could have done more, given the history of the river and those constitutional impediments, really is just a fantasy.

His last comment that Mr Hamilton-Smith might be able to do better rather reminds one of the recent Mayo by-election campaign where the local Liberal candidate promised that he was going to be the voice for the Lower Lakes and so on. I live in that electorate and we have not heard a word out of him since the election, and I do not expect to. The day that he raises some of these issues within his federal Liberal Party caucus and gets those many members who represent seats along the river to offer support for surrendering rights of their constituents towards the benefit of South Australia is when I will listen to members opposite.

I do not want to prolong the debate any further at this stage. I think that all the substantive issues have been addressed. The passing of this very important piece of legislation is long overdue. As the Hon. Mr Wade pointed out, after Federation, the River Murray Waters Agreement was passed I think in 1914. In the early 1980s that was extended to the Murray-Darling Basin Act but now, in 2008, we have the opportunity to deal with the many failings of those agreements, all of which incidentally were well known and well commented on at the time, but such is the history of the River Murray over the past century and a half that the legislation before us today is extremely important in terms of addressing some of those significant failings of the past 150 years. I look forward to the committee stage of these two bills.

Bill read a second time.

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