Water Pricing

The Hon. R.L. BROKENSHIRE (15:12): I seek leave to make a brief explanation before asking the Minister for Sustainability, Environment and Conservation a question regarding water charges.

Leave granted.

The Hon. R.L. BROKENSHIRE: After many years of delay, over the last six to 12 months water allocation plans have been signed off by the minister for both the Eastern and Western Mount Lofty Ranges. I have been advised by several constituents that, whilst water charges were only supposed to come in from 1 July this year, some of them have already received significant accounts for a water levy. I am also advised that there are expectations by the department of a possible licence as well as that to come in during each year. My questions to the minister are:

1. Why are irrigators in the Eastern Mount Lofty Ranges Water Allocation Plan being charged a water levy when things went quite well before the water levy came in?

2. Is it true that the irrigators will be charged a megalitre or kilolitre levy charge every year on their allocation, whether or not they use that allocation?

3. What benefits does the minister see for irrigators in the Eastern and Western Mount Lofty Ranges by receiving these charges, particularly when the charges have come in before they have used any water for this season?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (15:14): I thank the honourable member for his most important questions. I did adopt the Water Allocation Plan for the Eastern Mount Lofty Ranges prescribed water resources area on 17 December 2013. The plan represents a major step towards securing sustainable water supplies for the community, the industries in the area and the environment for future generations and future industry.

The plan was developed by the South Australian Murray-Darling Basin Natural Resources Management Board, working in partnership with the community, stakeholders and other agencies. Many people in the community and the peak industry groups have worked very hard over many years to help develop this plan. The plan will guide water management decisions throughout the Eastern Mount Lofty Ranges so that water is fairly shared between all users, including the environment. The Eastern Mount Lofty Ranges is an important agricultural region and having a plan for the sustainable use of water resources helps to protect the investment made by enterprises that rely on water for future prosperity.

The Eastern Mount Lofty Ranges prescribed water resources area was prescribed in September 2005 and covers the eastern slopes of the Mount Lofty Ranges to the River Murray. The prescription deals with surface water, groundwater and watercourses. There are currently, I am advised, 19 water allocation plans across the state. These are reviewed at least every 10 years. In terms of licensing, the Department of Environment, Water and Natural Resources commenced the process of issuing licences to existing users in the Eastern Mount Lofty Ranges in November 2013.

I am advised that there are approximately 945 water licences to be issued to existing users in the Eastern Mount Lofty Ranges. Water licences are being issued in a staged rollout, commencing with the issue of proposed licence packages. This gives water licence applicants the opportunity to request an amendment to their licence prior to the licence being issued. This process commenced, as I said, in November 2013 and, as at 11 April this year, proposed licence packages have been sent to 633 existing users, about 70 per cent of the 945 users I mentioned earlier. It is expected that the majority of proposed licence packages will be sent to existing users by mid-2014, and proposed licence packages will be sent to any remaining existing users by December 2014.

The total demand, of course, for water is higher than the sustainable extraction limit in some areas of the Eastern Mount Lofty Ranges which poses a risk for the long-term sustainability of the resource and the long-term sustainability of industry and agriculture. So, a risk-based approach has been taken to manage high water demand in those areas. Existing users will be allocated their full entitlement under the NRM Act in the first instance. For the highest risk zones, active partnerships will be developed with the community to identify appropriate strategies for reducing water demand. In other high demand zones, water resources and dependent ecosystems will be monitored to identify whether action needs to be taken to address negative impacts or risks. Allocations may be reviewed if monitoring indicates that the resource or ecosystem condition is under threat or declining or there is ongoing risk of negative impacts.

Both the board and the department will want to work closely with the community and industry, in fact all stakeholders across the Easterns, to develop and implement a strategy to manage allocations and water use where demand exceeds the sustainable capacity of a high demand zone. So, clearly, the benefits to licence holders are that their water allocations will be sustainable for the long term, that water will be there into the future—and that has to be managed and it has to be managed in a way that looks at all uses across the Easterns.

In terms of the different charging for allocations versus actual usage, of course this creates a right that people who have an allocation can trade, as opposed to usage. They all use water in a particular year in accordance with the climatic conditions and the crops they are growing, they can buy and sell water. They can also buy and sell, I think, their allocations. They can use these resources that are now being licensed for in very flexible ways to suit their own business and will be able to trade those in the market, provided that there is sustainable water to be traded.