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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2008-10-30 Daily Xml
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WATER (COMMONWEALTH POWERS) BILL

Committee Stage

In committee (resumed on motion).

(Continued from page 524.)

Clause 3.

The Hon. P. HOLLOWAY: Before we adjourned for lunch today, I mentioned some comments that Professor Sandford Clark had made some years ago in relation to the future of the Murray. For the record, I will provide the correct quotation. He was talking about issues from some 20 or 30 years ago now, but it still applies. He said:

The present wrangle stands as wry testament to the fact that, for all the acknowledged water management expertise accumulated by Australia in the last 80 years, there has been no notable genetic revolution in our political stock.

That is the quotation in full that I was paraphrasing before lunch.

Before lunch the deputy leader of the opposition asked a question in relation to legal advice, and I can provide some more information. I have a statement here, which I will read out and it can then be tabled. It is from the acting assistant crown solicitor, Advising, and the subject is 'Proposed Amendment to the Water (Commonwealth Powers) Bill 2008', dated 30 October. It states:

I understand that an amendment to the Water (Commonwealth Powers) Bill 2008 (SA) has been proposed. The amendment seeks to alter the definition of 'critical human water needs' contained in the bill. You seek advice as to whether the proposed amendment may affect the operation of the Water Act 2007 (Commonwealth).

Altering the definition of 'critical human water needs' in the bill may give rise to an argument that South Australia is not a 'referring state' for the purposes of the proposed section 18B of the Water Act 2007 (Commonwealth). If that was so, then the water Act would not operate in South Australia in many important respects.

The proposed amendments to the Water Act rely on the adoption of a uniform approach across the various basin states. Deviation from the agreed uniform approach necessarily creates a level of legal uncertainty and risk. In light of the very short time frame in which you requested this advice, I have merely stated my conclusions on these issues. Fuller advice, setting out my reasoning for arriving at these conclusions, will be provided in due course on request.

I table that document. Clearly, that is the advice, suggesting that it may well create issues in relation to the referral of powers. I can also advise the council that the commonwealth Solicitor-General, I understand, has provided advice. Of course, it is not our prerogative to provide that advice, but I can inform the committee that the commonwealth Solicitor-General has provided similar advice in relation to this particular matter, so that is the legal question.

In relation to the Hon. Mr Brokenshire's amendment, I can also provide some other information, just from having discussions with some of my colleagues over the lunch break. The Hon. Mr Brokenshire's amendment seeks, under the definition of human needs, to elevate permanent plantings within the hierarchy of essential human needs. At the moment, there are a number of irrigators, for example, who have permanent plantings of valencia oranges which are no longer required. In fact, a number of them have been pulled because there simply is no longer a market for them. In relation to oranges, of course, navels have taken over the market.

Are we seriously suggesting that those plantings should take priority over or be of equal priority with human consumption needs or industry or, indeed, other forms of agriculture like vegetables, for example? If you are talking about the need for food, why should a valencia orange tree be elevated above the growing of vegetables or other food crops?

The Hon. R.L. Brokenshire interjecting:

The Hon. P. HOLLOWAY: Yes, I know what you are saying; if it was navel oranges that were being produced. However, why would you protect trees like valencias which people are pulling out because there is no longer a market for them? It just does not make sense.

The Hon. R.L. Brokenshire interjecting:

The Hon. P. HOLLOWAY: The honourable member can argue it in a moment, but I simply make the point that this motion, quite apart from the legal threat it poses, is illogical even in terms of what it is seeking to do. Although, what I suppose it is really seeking to do is to play politics in the Riverland. Perhaps, on that level alone, it might make sense.

The Hon. R.L. BROKENSHIRE: On a point of order, twice now the minister has said to this chamber that I am playing politics and referred specifically to the Riverland. I ask that that be withdrawn because I have never referred specifically to the Riverland. I am talking about the River Murray where there are permanent plantings right along the river. That is an offensive comment by the minister and I ask that it be withdrawn.

The CHAIRMAN: I remember that the Hon. Mr Lawson referred to the good politics of it, but the honourable member did not ask that that be withdrawn. I think there is a lot of politics in this bill.

The Hon. P. HOLLOWAY: Indeed, and that is really what we are talking about here. However, let me also develop an argument in relation to this particular idea that, somehow or other, we elevate permanent plantings for crops whether they are in vogue or not. If we accept this principle, that somehow or other we elevate crops to the level of essential human need that we are reserving water for, Victoria could say, 'Okay, South Australia's doing it, so let's do it, too. We've got far more permanent plantings in this state, and we've got limited water so we will store it in our reservoirs because we've got so much more than South Australia.' Will we then have this massive volume of water presumably stored for what will now become essential human need?

I would suggest that that would be very much against the interests of South Australia. While it might sound wonderful to have this particular proposal for South Australia to refer these extra powers because we want to help our irrigators—some of whose permanent plantings will be under threat unless we can get at least 30 per cent of the water allocation this year—if this were to come about, what will be the ultimate outcome?

I would suggest, given the politics that will almost certainly apply to this (Victoria has not yet passed its legislation but is expected to do so very soon) that there is a very real threat in relation to what might happen here given that those upstream states have far more permanent plantings than we have. If we change this bill, we might well be the losers.

I want to make some other comments, now that I have tabled that legal advice from the acting assistant crown solicitor. The opposition has been calling for the commonwealth to have the power to manage the system as a whole in the national interest and to apply water-sharing rules equitably. If we specifically prescribe permanent plantings as critical human water needs—and therefore accord them the highest priority use of water in the basin without any bounds or consideration of equity, viability or socio-economic impact—then any permanent plantings would be provided with water regardless, and this makes a mockery of the definition of what is critical.

I remind members that the current definition provided in the bill is sufficiently broad to encompass consideration of permanent plantings that are truly critical—that is, they have a prohibitively high social, economic or national security cost. It is only appropriate that the authority develop the detail in the basin plan based on independent scientific expertise and in a way that considers all the social, economic and environmental implications.

This amendment would prescribe that such plantings were to be included in relation to critical human needs water, regardless of the severity of the drought situation or priorities for protecting communities and economies in any given circumstance. If South Australia proceeds with this amendment, you can be sure that Victoria and other states would seek to replicate and extend the effect of this to apply to their significant permanent plantings, many of which could not be called family farms and are, in fact, owned by managed investment schemes.

To highlight this fact, I give an example from yesterday's Weekly Times where it is reported that Timbercorp has 120,000 megalitres of high security water for its permanent plantings in Victoria, worth apparently $300 million. This is just one company and hardly a family farm. There are many more such examples, particularly in the Sunraysia, and the effect of this would undoubtedly lead to less water in the bucket for South Australia.

This amendment will only further entrench the past 100 years of parochial interests and divisiveness across the basin. The amendment will not provide certainty for irrigation communities in the Riverland as promoted by the Hon. Robert Brokenshire. For a start, it would apply only if the commonwealth government in future chose to make changes to the critical human water needs sections of its Water Act 2007.

It would not apply under the initial reference of powers, and the authority would not need to take into consideration South Australia's definition in developing the basin plan. It is likely that the commonwealth would be limited in making future changes because it would not be able to make uniform amendments that apply to all jurisdictions. That is against the cooperative spirit of reform.

I remind members that this government has already put in place measures to provide a critical water allocation to viable businesses with permanent plantings as a contingency measure under this drought. This state would continue to have the power to put in place these kinds of measures under extreme circumstances regardless of this legislation.

So, in a number of respects, this is an ineffectual amendment that poses unintended consequences both legally and politically, and puts at risk those family farms that the honourable member now seeks to protect.

The CHAIRMAN: I will give the Hon. Mr Brokenshire the opportunity to respond and then I intend to put the amendment. We have had a fair bit of discussion.

The Hon. R.L. BROKENSHIRE: I appreciate your allowing the indulgence. I have just two more things and then I am happy to pull those matters that I was going to raise in further clauses. If I can just have some indulgence on this important clause: first of all, as a member of a small Independent party, I am not privy to information concerning the Attorney-General's Department and Crown Law, but I have actually had further legal advice from a person who is an expert in constitutional law. My advice in summary is that what we are putting forward is right and proper, the way the bill has been drafted. Indeed, if the drafting, in turn, is wrong, the whole bill should be withdrawn and fixed.

I have two questions for the minister, based on everything he said. First, does the same situation apply to all the industry in Adelaide? The minister has indicated that industry would certainly come within the purview of critical human need. Does the same situation then apply to industry as applies in relation to permanent plantings, in that there would not be the guarantee that he indicated earlier in response?

Secondly, I am still waiting on an answer from the minister. The minister has not answered a question specific to this matter, which I raised in my second reading speech, namely: how did this definition come to be and what did all the ministers consider it to be, given that it has specifically been put in there for a purpose? I think the committee needs some answers to this question. Again, mine is a small Independent party, but another piece of constitutional legal advice says that what we are putting up here is right and proper if the parliament wants to pass it and not rubber stamp the dictatorship of premiers and executive government.

The Hon. P. HOLLOWAY: No-one is suggesting that the state cannot amend its act. We could have done it with the cooperative companies scheme or with terrorism. We could have had a different reference: it is just that it would have run the risk of potentially undermining it. Back in the 1980s when we referred powers in a way similar to this, we could have gone our own way in relation to the companies scheme and made our reference different to those of other states, putting some additional references in that legislation. What would that have done for the companies? It is not that one cannot do it, I would suggest: it is just that it is very unwise to do it, for the reasons I have outlined. I do not think anyone is saying that you cannot do it.

A future government, if it wishes, can take the reference back just as it could in relation to terrorism powers or company powers. The very fact that states have not done it some 20 or 30 years later I think acknowledges that they have been good moves in the national interest, that what has come out of those national schemes has been very much in the public interest, and I have no doubt that that will be the case here.

The other matter the honourable member raised was the background to why the states had put in this definition. In a period of severe drought, as we are, if you have less water than you would like to have, you have to start dividing it up. What we need, and what this program is all about, is developing a basin plan. We have this independent scientific body to do that. Clearly, some recognition is given of the huge social impact that would result should water not be available for essential industries within Adelaide, but that should be incorporated in the measure.

When this basin plan is worked out, the independent scientific experts will need to take into account relative importance. While all of us accept that we need to do everything we can to ensure that permanent plantings are maintained, that is much higher up in the hierarchy than other uses and, if we have a water shortage, any government here is going to ration water across the community, as is being done in this state. There has to be some rationing which states will do. Ultimately, in the allocation of that, this clause essentially provides that, in a situation where you do not have the water that you would like to have, you have to split up the priorities.

I am quite happy to defend the definition that is in there. As I said, it covers some aspects of non-human consumption, but you would expect the independent people to weigh up the relative benefits of that to other uses such as industry in Adelaide. I guess we would know that industry in Adelaide would have a very high level of employment relative to water use compared to some agricultural uses. That is why one would expect that, on that social index, it might be higher up the hierarchy. Clearly, that is what will have to be worked out in the basin plan.

The Hon. M. PARNELL: My question is to you, Mr Chairman, and it is about process. We are debating the honourable member's amendment. I do not want to disrupt the flow of the debate, but I do have some other questions that relate to this clause. So, once the amendment has been dealt with, will I still have the opportunity to ask those additional questions, or should I defer them to a different clause?

The CHAIRMAN: No; you will have the opportunity to ask further questions. If you have any questions for the mover of the amendment, you should ask them now.

The Hon. M. PARNELL: No; they are on a different topic but within the clause still.

The Hon. R.D. LAWSON: First, I thank the minister for tabling that legal advice, although, as he readily acknowledges, as does the author, it is very preliminary advice, but I understand its import. I have a question for the mover so that I can better understand his motivations behind the amendment. The Hon. Mr Brokenshire, as everyone knows, has been a vocal champion of the dairy industry and of dairy farmers in South Australia who have been put upon in recent years.

If one elevates the preservation of permanent plantings to the status of critical human need, that would necessarily mean that, as allocations come out of the South Australian allocation, those dairy farmers who do not maintain permanent plantings as defined but maintain pastures would actually lose water and entitlements. Has the honourable member given thought to that, and how does he justify preferring Plant Corp and other owners of large permanent plantings ahead of dairy farmers?

The Hon. R.L. BROKENSHIRE: It is not at all a matter of putting permanent plantings ahead of dairy farmers. The fact is that the global amount of water would have to be divided with absolute priority. At the moment, the bottom line is that right now a large number of dairy farmers do not have any irrigation water, and I refer to areas in the Lower Lakes and the Narrung Peninsula, and around that area. In fact, I have been down there and had a look, and they are not irrigating at all.

The point I make with this is that, when it gets to the two most critical human need factors—and I am not talking about the industry the minister is talking about, an industry that could be quickly weaning itself off using River Murray water if the government had the intestinal fortitude to make that happen—I am talking about, first, the critical human need for potable water for human beings and, secondly, the need for food.

The question is: how are those dairy farmers producing that milk? I feel for them and I would love to see them with a water allocation, but they are still in a situation where they have stayed there producing milk because they can buy in grain, they can buy in fodder and they can grow a cash crop if they get a half reasonable winter. Likewise, with vegetables; vegetables are a three or four month crop.

In the case of permanent plantings, it takes up to five years for permanent plantings to produce anywhere near an economic crop, and it has to be kept alive. The citrus up there has died primarily for one reason, and that is that there has not been enough water for production. Also, just to survive, they have also had to select, within the water allocation at the moment, the most healthy plantings. The bottom line is that I have moved the amendment because, first, there is no room to move when it comes to permanent plantings because of the length of time it takes to produce. The second point is the absolute input cost to get to that time. The third point is that there is no other option to keeping those permanent plantings alive from Paringa through to Currency Creek and Goolwa, other than to give them enough water to keep them alive—and that is what this is about.

The final point is that, within all of this, it is already implied under the critical needs that they would be able to access water for their cows. That is the reason the government is spending mega bucks at the moment to build pipelines to the Narrung Peninsula, etc. to provide water to keep the stock alive, and I commend the state and federal governments for this initiative.

Another point is that they are spending money putting pipes down to Currency Creek and Langhorne Creek—using our taxpayers' money—on behalf of the constituents we represent in this place. The fact that we are here as members in a democratic parliament has nothing to do with the executive. It is spending money putting pipes in for permanent plantings. This clause allows us to tighten it up and ensure that water is going through the pipe to keep those permanent plantings alive, but at this point the government is refusing to support the amendment.

The Hon. P. HOLLOWAY: Whether or not we have enough water to put down the pipes depends, ultimately, on whether the water is there. The broader the number of ways you distribute it, the less water there will be. It is just a logical deduction. In broadening this out, what the honourable member is seeking to do is move away from what is accepted broadly as the definition of critical human needs. As the honourable member said correctly, it includes water for stock and the like, but what about vegetable growers? Although their crops are perennial, they require significant infrastructure associated with their production. If they do not have water, obviously their long-term viability is just as vulnerable as well.

That is the whole problem: if we start picking winners, we are going back to exactly what we were trying to move away from. Members must remember that the whole purpose of this bill is to refer powers to the commonwealth so that there can be an independent body to determine such things as the basin plan, which will cover such matters as the allocation of water in times of severe need. The more you play around with this, the more there will be the legal risks we talked about that might bring undone the whole fabric of the arrangement. There is also the opportunity for other states to exploit this in ways that might damage South Australia. Again, I urge members to oppose the amendment.

The CHAIRMAN: I have a question for Mr Brokenshire. Does this take in irrigated pastures, such as lucerne and other permanent pastures for dairy farmers?

The Hon. R.L. BROKENSHIRE: No, it does not. Because of critical human needs, and the amount of water needed to grow pasture, it does not take in any annual or cash crops at all; it is only permanent plantings.

The CHAIRMAN: Lucerne is hardly an annual crop, is it? If it is irrigated, it is a continuous crop and can yield more than one crop after planting. Does it come under this?

The Hon. R.L. BROKENSHIRE: Under the permanent plantings amendment, we are only talking about keeping these trees alive. We are not talking about production.

The Hon. P. HOLLOWAY: As an additional comment, some plantings that are obviously permanent plantings under this definition will be less valuable than others. It may be a variety of grapes, for example, or a variety of oranges, such as Valencias, that may be out of vogue for all sorts of reasons. They are obviously a lot less valuable than crops that may be in vogue.

In any case, often the productivity of these permanent plantings will decline after a period of time. Oranges have a finite life, so does that mean that, if someone has an orchard that is near the end of its life, and productivity is down, do they keep producing, rather than do what would be sensible economically, that is, replace that crop?

The point I make is that there are all sorts of distortions and anomalies that will come into this once we start moving away from the basic principles that this bill seeks to achieve, namely, to have an independent body to develop the basin plan in accordance with the agreement that has been drawn up by the states.

The Hon. R.D. LAWSON: I certainly do not pretend to be an expert in this field, especially in relation to the operation of the irrigation system. Can the minister confirm that currently South Australia's allocation for critical human needs is 291 gigalitres, with a further 196 gigalitres to deliver the 291 gigalitres to South Australia?

The corresponding critical human needs allocation for Victoria is only 53 gigalitres and New South Wales 75 gigalitres, and they do not have any additional allocation for delivery. Will the minister confirm that those figures are correct? If this amendment were to be adopted in Victoria, what would be the additional claim of Victoria upon the critical human needs?

The Hon. P. HOLLOWAY: If we go back to where we were, I understand that the passage of this amendment would not of itself do anything; it would be only if the commonwealth chooses to do it. If Victoria were to move a similar amendment, the commonwealth may or may not seek to amend it at some stage in the future. It certainly would not affect the initial round, as I understand it. Clearly with the critical human needs of this state the agreement recognises that Adelaide alone amongst the capital cities has been dependent on the Murray, along with a number of other towns in the Murray Valley itself but also in the Upper Spencer Gulf region. That is a reflection of that. We need a much higher allowance for delivery because we are further downstream and that water will be consumed in bringing the water down here.

The point the honourable member is making is that, if we open up this debate and Victoria sees that South Australia is trying to get some advantage in relation to additional supply, it might well open it up for further claims. It is pure speculation with regard to what might happen politically, but all of us are capable of working out what the politics might be. Legally the risk is that the whole agreement, which has those sorts of understandings on the figures the honourable member gave, could be at risk if we go down the track of supporting this amendment.

The committee divided on the amendment:

AYES (10)
Bressington, A. Brokenshire, R.L. (teller) Hood, D.G.E.
Lawson, R.D. Lensink, J.M.A. Lucas, R.I.
Ridgway, D.W. Schaefer, C.V. Stephens, T.J.
Wade, S.G.
NOES (9)
Darley, J.A. Finnigan, B.V. Gago, G.E.
Gazzola, J.M. Holloway, P. (teller) Hunter, I.K.
Kanck, S.M. Parnell, M. Zollo, C.
PAIRS (2)
Dawkins, J.S.L. Wortley, R.P.

Majority of 1 for the ayes.

Amendment thus carried.

The Hon. R.L. BROKENSHIRE: I move:

Page 3, after line 3.

Insert:

Permanent plantings means any trees, bushes, vines or palms, maintained for the purpose of the production of food for human consumption, that yield more than one crop after planting if properly maintained.

This amendment is consequential on my first amendment.

The Hon. P. HOLLOWAY: I will not bother wasting time on a division. Clearly, the amendment is totally unacceptable to the government. What can one say? It is making South Australia a laughing stock of the country, and this chamber in particular. Nevertheless, we must move on. We will not waste the time of the committee dividing on it because it is consequential.

Amendment carried.

The Hon. M. PARNELL: I have a couple more questions on this clause. I think this is the appropriate place to raise these questions because it is the clause which refers to the tabled text and which ultimately refers to the agreement between all the states and territories. I note that, in his second reading explanation, the minister states:

These reforms will, for the first time, ensure 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.

My question to the minister is in regard to the relationship between that statement and the government's proposal to double the storage in the Mount Lofty Ranges and, in particular, doubling the size of Mount Bold. It seems to me that, if this bill passes and these arrangements between the states come into effect, what we are effectively doing is acquiring additional storage capacity outside the Mount Lofty Ranges; we are acquiring it in these upstream dams and, therefore, I would imagine that the expansion of the Mount Bold reservoir is no longer needed. Will the minister confirm that that is the case; and, on the passage of this bill, will the government abandon plans to increase the Mount Lofty Ranges storage?

The Hon. P. HOLLOWAY: In relation to that latter matter, that is something that I suggest is not related to this bill. The government will make a decision on that at the appropriate time, given the finances of the state and given, ultimately, any environmental impact statement, and so on, should it proceed. The state government is considering the issues about what will happen to the storages at present. We have charged the Water Security Council, through the Adelaide Desalination Steering Committee, with looking at those issues and providing advice to the government, so that it is a work in progress.

Clearly, how we would apply that (where that storage would be) is something that obviously we will have to consider. I would have to say that, given the amendment that has just been applied in Victoria, if we were to adopt a similar attitude and say, 'Okay; we want our share of critical human needs now for permanent plantings', they would probably get at least 1,000 gigalitres extra, and we would not have the capacity up in Dartmouth. This is the sort of nonsense involved in the amendment that we are considering.

Whereas it sort of made sense before and it is a real plus that has come out of this agreement—and the minister who has negotiated it deserves all the credit for it—it is a huge advance that we now have access to storage capacity interstate but, as I said, if this critical human needs allocation is to go to Victoria, with the thousands of extra gigalitres that it would require, then it could well be worthless. Of course, I guess politics in the Liberal Party always come before good policy; always come first.

The Hon. D.W. RIDGWAY: I have a question that is not related to this topic, but the minister did talk about the Mount Bold reservoir and the Adelaide Desalination Task Force in answering the last question. The minister some months ago said that the government was looking to store water from the desalination plant in Mount Bold. Will the minister provide some clarity on that?

The Hon. P. HOLLOWAY: The honourable member knows that I was referring to the Happy Valley reservoir as obviously the appropriate place. From my understanding, Happy Valley reservoir is supplied from Mount Bold and it has the filtration plant there. That is where water is distributed and that is the closest distribution storage, as I understand it, from Port Stanvac.

The Hon. D.W. RIDGWAY: I have a further question: is the government intending to store water from the desalination plant (whether it is 50 or 100 gigalitres) in the Happy Valley reservoir?

The Hon. P. HOLLOWAY: These are matters that have nothing at all to do with this bill. If the honourable member wants a briefing on it, I am sure my colleague, the Minister for Water Security, would be happy to brief him on matters relating to the desal plant and storage, but it has nothing to do with referring our powers over the River Murray to the commonwealth.

The Hon. M. PARNELL: Just to pursue that line of questioning: if the bill goes through and the plans come into effect, does this government have any plan to reduce Adelaide's reliance on the River Murray?

The Hon. P. HOLLOWAY: If we have a desalination plant that is producing whatever the capacity is—50 or 100 gigalitres of water a year—to the extent that it is producing water that might otherwise come from the Murray then, clearly, we will be reducing our reliance on the Murray.

The Hon. M. PARNELL: In relation to the Murray-Darling Basin plan, is it correct that wetland management plans, such as those for Ramsar wetlands—for example, the Coorong and the Lower Lakes—will not be incorporated into the Murray-Darling plan? If that is correct, what capacity does the state government have to insist that such plans be incorporated?

The Hon. P. HOLLOWAY: My advice is that the wetland management plans will not be incorporated into the basin plan but that it will need to take into account various matters. The basin plan will set sustainable limits on the quantity of water that may be taken from the basin's water resources. This will ensure that there is a greater quantity of water available for environmental needs. The plan will provide for a comprehensive environmental watering plan that will coordinate management of environmental flows throughout the basin and ensure environmental assets are protected.

The watering plan must specify flow and health targets. This includes environmental water recovered by the commonwealth and basin states under water recovery programs such as the Living Murray initiative and Water for the Future program. Ramsar sites, such as the Lower Lakes, the Coorong and the Murray Mouth, will be a priority for environmental watering under the basin plan. Section 21(3)(b) of the Water Act 2007 specifically states that the basin plan must promote the conservation of declared Ramsar wetlands in the basin.

The commonwealth Water Amendment Bill 2008 also proposes an addition to this section to emphasise this requirement under clause 47 of the amendment bill by including an additional requirement that the basin plan take account of the ecological character descriptions of (1) all declared Ramsar wetlands within the Murray-Darling Basin and (2) all other key environmental sites within the Murray-Darling Basin, prepared in accordance with the national framework and guidance for describing the ecological character of Australia's Ramsar wetlands endorsed by the Natural Resource Management Ministerial Council.

The Hon. M. PARNELL: Following on from that answer from the minister, does that effectively mean that South Australia is no longer ultimately responsible for the health of the Coorong? Will the decisions that we have been making up until now—such as decisions to pump water from one lake to another—and perhaps future decisions to pump hypersaline water from the southern lagoon of the Coorong into the sea (decisions that previously have been the domain of the state) no longer be so under these arrangements?

The Hon. P. HOLLOWAY: While water operations in the Lower Lakes are traditionally under the control of the Murray-Darling Basin Commission and funded accordingly, it is my understanding that South Australia has been the authority responsible for undertaking those particular works. Clearly, we have an independent body that will prepare the basin plan, but one presumes that the state will still be responsible for the operation of that plan, certainly within the Lower Lakes area. My advice is that decisions have been made under the auspices of the Murray-Darling Basin Commission, and we have been implementing the decisions. That is what will happen into the future. It will possibly be a new authority that will have independence in respect of the plan that South Australia would remain the operating authority.

The Hon. M. PARNELL: If the minister could please tell us: what is the government's latest understanding of when the preparation for the Murray-Darling Basin plan will commence; and how long does the government expect it will take to prepare?

The Hon. P. HOLLOWAY: Now that we have this amendment, one can scarcely risk the temptation to say, if that is insisted upon, who knows? If common sense prevails and we are able to get all of the states with a common transference of powers, the plan is due in 2011. Of course, a lot will happen in the meantime until that is formally adopted. Existing drought contingency planning will continue, obviously.

The authority will work with the basin states as a priority to establish the three-tier water sharing arrangements under the Murray-Darling Basin Agreement to address low water availability in extreme drought conditions. This will include establishing triggers for when the different management arrangements will apply.

There are initiatives underway to address overallocation, improve irrigation efficiency and provide environmental flows. These include the Living Murray Initiative, which aims to recover 500 gigalitres of water for the environment and $3 billion to purchase water, and $5.8 billion to improve irrigation efficiency under the Water for the Future program. This is in addition to state water projects, including the $610 million Murray Futures program in South Australia.

The Hon. M. PARNELL: I thank the minister for his answer. Does the government expect that, as a consequence of the plan being drawn up and implemented, the dredging of the Murray mouth will no longer be required?

The Hon. P. HOLLOWAY: I would have thought that that would depend on how much rain we get and whether we have inflows into the basin. The mouth has not flowed for possibly five years because we have had some very dry years. Clearly, for the mouth to flow again, we would have to return to the sorts of flows that we have had in previous decades.

If the honourable member is talking about an average year, even then it is difficult to say because it depends where rain falls, whether it falls at the right time, whether it falls in the right areas for catchments and so forth. Clearly, the intention of the Living Murray Initiative is to return water to the river for environmental flows and, obviously, the chances of the mouth opening and remaining open will be much greater than if we do not have those initiatives. A lot will depend on the $3 billion to purchase water and the money for irrigation efficiency and how quickly and efficiently that money is spent.

Clause as amended passed.

Clause 4 passed.

Clause 5.

The Hon. M. PARNELL: Clause 5 talks about a termination of reference, in particular, by our state. What would the consequences be for any one state withdrawing its reference; would it, effectively, hold the remaining states hostage?

The Hon. P. HOLLOWAY: If the state terminates, management of the system will become more complex; however, those aspects of the Water Act that do not rely on state referral would remain in place because termination would not mean withdrawal from the Murray-Darling Basin Agreement. This means that the authority will remain in operation. The basin plan still applies, setting sustainable caps that can be enforced by the authority and states must not act inconsistently with the basin plan. South Australia's access to storage is retained—that is, that which has been established under the agreement. The authority will continue to manage river operations under the Murray-Darling Basin Agreement in that state (the one withdrawing, I assume). The ACCC would have limited powers with respect to water charging and water market rules, increasing the complexity of water trading.

The state that terminated would not be required to apply the provisions of the basin plan that provide for conveyance water and other arrangements to meet critical human needs under tier two water sharing arrangements. However, the ministerial council is able to make a schedule under the agreement setting out how state water shares will be determined, delivered and accounted for under tier two water sharing arrangements. This would still apply to the terminating states. Notice of the termination is required which would allow the jurisdictions to have notice of a state's intention to withdraw from the scheme and negotiate an outcome and, importantly, the state would lose benefits of the wider scheme. For example, the commonwealth would no longer take responsibility for any reductions in allocations due to new knowledge and the commonwealth would no longer contribute to additional costs to the states of water reform associated with the management of the Murray-Darling Basin. This includes funding for priority projects.

As I said earlier, just as with the ministerial arrangements for dealing with terrorism or those in the mid-1980s in relation to the companies scheme, I have no doubt once this agreement is in place, if all the states agree on the terms of their reference, I think history shows it is highly unlikely that these sorts of agreements would unravel once they have been in place.

Clause passed.

Remaining clauses (6 and 7) and title passed.

Bill reported with amendments.

Third Reading

Bill read a third time and passed.

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