Bills Digest no. 45 2008–09
Water Amendment Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date introduced:
25 September 2008
House: House
of Representatives
Portfolio: Climate
Change and Water
Commencement: Sections
1–3 on the day of the Royal Assent; Schedule 2 on the date of Proclamation
or six months after the day of the Royal Assent, whichever is the earlier;
Schedules 1 and 3 immediately after the commencement of the provisions
covered by table item 3.
Links: The relevant
links to the Bill, Explanatory Memorandum and second reading speech
can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills
have been passed they can be found at ComLaw, which is at http://www.comlaw.gov.au/.
To amend the Water Act 2007 (the Water Act)
to make changes to the cooperative water planning, management and regulatory
regime in the Murray Darling Basin. In particular, the changes reflect
agreement by the relevant States and the ACT to refer constitutional powers
to the Commonwealth to broaden the Commonwealth’s planning, management
and regulatory powers.
Located in the south-east of Australia, the
Murray-Darling Basin (MDB) covers over 1 million square kilometres, equivalent
to 14 per cent of Australia’s total area. The MDB extends over three-quarters
of New South Wales (NSW), more than half of Victoria, significant portions
of Queensland and South Australia, and includes the whole of the Australian
Capital Territory (ACT). Well over half of the MDB is in NSW and almost
one quarter is in Queensland. Often referred to as the nation’s ‘food
basket’, the MDB included 1.65 million hectares of irrigated crops and
pastures, accounting for 65 per cent of the total area of irrigated land
in Australia in 2005-06. The MDB is Australia's most important agricultural
region, with production worth $15 billion in 2005-06 accounting for 39
per cent of the nation's gross value of agricultural production. Gross
value of irrigated agriculture production in the Basin in 2005-06 was
$4.6 billion or 31% of the Australian total, a decline of 2% since 2000-01.
However the volume of water consumed in 2005-06 for agricultural production,
7,720 Gigalitres (GL), was 66% of Australia’s agricultural water consumption.[1]
In 2004-05, industries and households in
the MDB used 52% of the total water consumed in Australia. The agriculture
industry used 85% of the water consumed in the MDB in 2004-05. The major
water users of the agricultural commodities in 2005-06 were cotton (1,
574 GL), dairy farming (1,287 GL), pasture for other livestock (1,284
GL) and rice (1,252 GL).[2]
In 2002 the MDB Ministerial Council agreed
to the Living Murray First Step program, a joint funded initiative to
return up to 500GL per year of permanent ‘new water’ to the River Murray
by 30 June 2009 as an environmental flow to protect 6 icon sites that
include the
River Murray Channel and five Ramsar sites:
Barmah-Millewah
Forest; Gunbower-Koondrook-Perricoota
Forest; Hattah Lakes;
Chowilla
Floodplain and Lindsay-Wallpolla Islands; and Lower Lakes,
Coorong and Murray Mouth. Further information on the Living
Murray program can be found at the MDBC website.[3]
To date 133 GL of environmental water has been listed on the Environmental
Water Register and projects which may yield up to 375.7 GL are ready to
be implemented.[4] Details
of the projects being under development and implemented can be found on
the Living Murray website.
The 2004 National
Water Initiative (NWI) represents an agreed position of Commonwealth,
state and territory governments on water reform issues. In part, its origins
can be traced back to the 1994 Council of Australian Governments (COAG)
agreement on water resource policy. Its overall objective, as expressed
in paragraph 23 of the NWI, is to:
achieve a nationally compatible market,
regulatory and planning based system of managing surface and groundwater
resources for rural and urban use that optimises economic, social and
environmental outcomes.
The NWI also mandated the establishment of
the National Water Commission (NWC), which was subsequently created under
the National Water Commission Act 2004. It both assesses the various
governments’ progress in implementing the NWI and helps its implementation
by, for example, acting as lead facilitator on certain actions under the
NWI such as compatible registers of water entitlements and trades, and
nationally consistent approaches to pricing.
The NWI contains some specific provisions
on the MDB. The NWI also required relevant Parties to sign a separate
agreement to address the overallocation of water and achievement of environmental
objectives in the MDB (‘the 2004 MDB Intergovernmental Agreement’). However,
in its latest progress report, the National Water Commission noted that:
While policies, plans or management frameworks to
address over-allocation or stress have largely been put in place, specific
results have been less evident and possible over-allocation remains
a major concern, particularly in the Murray-Darling Basin.[5]
The November 2006 MDB Water Summit decided that CSIRO was to be commissioned
to report by the end of 2007 on sustainable yields of surface and groundwater
systems within the Murray-Darling Basin, in light of changes in climate
and other issues. CSIRO has been contracted by the National Water Commission
to report on current and future water availability in the 18 regions of
the MDB. These reports have been completed and the full reports and summaries
are available.[6]
On 25 January 2007, in an address at the
national press Club, the then Prime Minister announced the National
Plan for Water Security (the National Plan). In relation
to the water resource planning and management in the MDB the National
Plan stated:[7]
The existing mechanism for the management
of the Basin is the MDBC. While the current arrangements have made some
substantial contributions to Basin-wide water management over the decades,
the shortcomings of the current model are of concern to the Commonwealth
Government and, indeed, many others.
The decisions taken by the MDBC often reflect
parochial interests and do not reflect the best interest of the Basin
as a whole…
The Proposal
It is in the national interest
to secure the long-term economic and social returns to the Australian
community afforded by sustainable access to the Basin’s water resources.
This can only be achieved through:
• significant investments in water saving infrastructure;
• new investments in water resource monitoring and water use metering;
• addressing the over-allocation problem via entitlement purchases and
structural adjustment; and
• reforming the decision making processes in the Basin.
It is critical that all four strategies
are implemented together.
The Commonwealth Government will request
the referral of state and territory powers to enable it to manage the
MDB in the national interest.
The Commonwealth Government will seek the
agreement of NSW, Victoria, Queensland, South Australia and ACT governments
to transfer all their powers in relation to the MDBC to enable the Commonwealth
Government to oversight water management in the MDB.
Subsequently, NSW, South Australia and Queensland
agreed to refer relevant Constitutional powers to the Commonwealth to
enable it to manage the MDB in the national interest and the ACT agreed
to cooperate fully. Victoria did not agree to the referral of powers at
the time but agreed to continue to negotiate with the Commonwealth to
identify mutually satisfactory ways of achieving agreed outcomes.
When it was introduced on 8 August 2007,
the Water Bill did not include each of these four critical aspects because
of the failure to reach agreement with Victoria on the constitutional
referral of powers to the Commonwealth.
The Water Bill was subject to formal inquiry
by the Senate Committee on Environment, Communications, Information Technology
and the Arts (the Senate Committee), but only six days were allowed for
the inquiry to report.
The Senate Committee report contained significant concerns expressed by
ALP, Democrat and Green members of the Committee.[8] However, amendments proposed in
the Senate were not successful and the Water Bill was passed without amendment
on 16 August 2007. The operative sections of the Water Act came into force
on 3 March 2008.
There have been various intergovernmental agreements relating to the
water resources of the MDB, and particularly the River Murray, dating
back to 1914. The current Murray-Darling Basin Agreement (the MDB Agreement)
was signed in 1992, and given full legal status by the passing of the
Murray-Darling Basin Act 1993[9]
by all the contracting governments. Queensland became a signatory in 1996,
and the ACT formalised its participation through a Memorandum of Understanding
in 1998. The MDB Agreement provides the process and substance for the
integrated management of the MDB.
Before the commencement of the Water Act, the main governance, operational
and consultative mechanisms established under it were:
- the Murray-Darling
Basin Ministerial Council, political decision-making body
- the Murray-Darling
Basin Commission, the executive arm of the Ministerial Council which
advises the Council and carries out its decisions. It is required to
equitably, efficiently and sustainably manage and distribute the water
resources of the River Murray in accordance with the MDB Agreement.
- the Community Advisory
Committee, which provides the Ministerial Council with advice and
provides a two-way communication channel between the Council and the
community.
Some of the key features of the Water Act,
so as far they are relevant to the amendments proposed in the current
Bill, included:
- The establishment of the Murray-Darling Basin Authority (MDB Authority).
Key functions of the MDB Authority are:
- preparing a Basin Plan for adoption by the Commonwealth Minister,
including setting sustainable limits on water that can be taken
from surface and groundwater systems across the Basin[10]
- advising the Minister on the accreditation of State water resource
plans, and
- developing a water rights information service which facilitates
water trading across the Murray-Darling Basin
- The Australian Competition and Consumer Commission (ACCC) was given
a key role in developing and enforcing water charge and water market
rules.
Note that once Schedule 1 of this Bill comes into force, the current
version of the MDB Agreement will be replaced by one signed at the July
2008 meeting of Council of Australian Governments (COAG) meeting. This
Agreement (the 2008 MDB Agreement), which is itself in Schedule 1 of the
Bill, reflects the various governance and other regulatory arrangements
broadly agreed at the March 2008 COAG meeting and subsequently confirmed
in at the July meeting.
At the first COAG meeting after the election
of the Rudd Government, the Commonwealth and NSW, Victoria, Queensland,
South Australia and the ACT signed a Memorandum
of Understanding (MOU) on MDB reform. According to the Commonwealth
Minister for Climate Change and Water, Penny Wong, the MOU contained an
agreement for, amongst other matters:[11]
- the establishment of the independent MDB Authority as the single body
responsible for the overarching management of the MDB
- arrangements giving the Commonwealth Minister power to approve a new
Basin-wide plan, including a new cap on the amount of water used in
the MDB, based on independent advice from the Authority
- a commitment to provide for critical human needs and arrangements
to allow South Australia to store water in upstream dams to ensure there’s
enough water for Adelaide and towns reliant on the Murray for drinking
water, and
- continuation of the States’ role in setting annual water allocations,
decisions on natural resource management across the Basin and a new
role to provide input to the Basin-wide plan.
The MOU was then implemented through the
signing of a new Intergovernmental
Agreement on Murray-Darling Basin Reform.[12] Notably, this Reform Agreement required the relevant states
to use their ‘best endeavours’ to pass legislation in their respective
jurisdictions to refer constitutional powers to:[13]
- widen the mandate on the Authority as mentioned above, as well as
making other changes to governance structures
- strengthen the role of the ACCC within the Basin by extending the
application of the water market rules and water charge rules to cover,
respectively, all irrigation infrastructure operators and all bodies
that charge section 91 regulated water charges not just those that fall
within the scope of the Commonwealth’s powers, and
- enable the Basin Plan to provide for critical human water needs.
The Reform Agreement also aimed to have the amendments to the Water Act
in place and in force from on 1 November 2008. The current status of the
State referral legislation is:
- New South Wales - Water (Commonwealth Powers) Act 2008 received
Royal Assent 25 September 2008.
- Victoria - Water (Commonwealth Powers) Bill 2008 2nd reading
in Legislative Assembly 9 October 2008
- Queensland - Water (Commonwealth Powers) Bill 2008 introduced into
Legislative Assembly 7 October 2008
- South Australia - Water (Commonwealth Powers) Bill 2008 introduced
into House of Assembly 23 September 2008
The reform of MBD governance arrangements under the Bill are part of
the Rudd government’s central water policy, Water for the Future,
release by Senator Penny Wong in April 2008.[14]
Details of the $3.1 billion Restoring the
Balance in the Murray-Darling Basin
Program can be found at http://www.environment.gov.au/water/mdb/entitlement-purchasing/overview.html.
Under a public tender process, announced in February 2008, the Australian
Government allocated $50 million to purchase water in the 2007-08
financial year. The result of the tender was that the Australian Government
agreed to purcahse 35GL worth of water entitlements, to a value of $53
million.
The next round of water entitlement purchases, announced on 8 September
2008, was the first phase of the Government's $400 million program to
purchase water entitlements in the northern MDB. On 10 September 2008
the NSW and Commonwealth Governments purchased Toorale Station at the
Warrego and Darling Rivers, its 14 GL of water entitlements and the rights
to harvest water from the floodplain for $23.75 million. New South Wales
will take responsibility for preserving the land, and there is an agreed
process for transferring the water to the Commonwealth Environmental Water
Holder.
The third phase of water entitlement purchasing for the southern MDB
in 2008-09 opened from 7 October 2008 and will close on 30 June 2009.[15]
The Minister for Water and Climate Change, Senator Penny Wong said that
environmental water purchases made in South Australia will go towards
achieving the $80 million of water buyback in South Australia announced
by the Prime Minister on 14 August.[16]
In September 2008 the Government announced that it was offering to buy
the water entitlements of small block irrigators in the MDB who agree
to sell all their water entitlement to the Commonwealth this financial
year.[17] The Government
will offer up to $150,000 as a special exit payment, along with other
transitional assistance, to eligible irrigators on 15 hectares or less.
The program will cost up to $57.1 million and yield up to 48 GL of environmental
water.
The Government is also inviting groups of irrigators who may wish to
develop coordinated proposals for selling their water entitlements to
the Commonwealth and decommissioning or altering shared irrigation supply
infrastructure under the Restoring the Balance in the Murray-Darling Basin
program.[18]
The September 2008 MDBC Drought Update made the following comments about
storage levels and the impacts on the environment of the lower lakes and
Coorong:
SYSTEM STORAGE
The current volume of active storage in the Murray system
(Hume Reservoir, Dartmouth Reservoir and Lake Victoria), is 1,690 GL or
20 % of capacity. This is similar to the storage level of 1,710 GL at
the end of August 2007 but well below the August long term average of
5,600 GL (or 62 % capacity). There is an additional 500 GL in Menindee
Lakes (which remains under control of NSW) some of which (about 220 GL)
NSW plans to release into the Murray system between September and December
2008.
All the water currently in storage and under Commission
control is fully committed for critical human needs, individual carryover,
announced allocations, and the river and storage losses that will occur
while supplying this water. A total of 990 GL is currently committed to
South Australia, of which about 350 GL is expected to pass through to
the Lower Lakes. However, as this is only about half the net annual evaporation
for the Lower Lakes, it is expected that the water level in the Lower
Lakes will continue to fall if extreme dry conditions persist.
Elsewhere in the Basin, storage levels are also very low.
The total volume of water in all Basin storages managed by the MDBC and
State governments, is about 5,300 GL, or 23 % of capacity. In most valleys,
the small volumes of water held in government storages are already earmarked
for town water, stock and domestic supplies, carryover or to meet system
losses. Storages in the Snowy Mountains (which are managed by Snowy Hydro)
also remain at record low levels, similar to this time last year………
THE ENVIRONMENT
The prolonged dry period across the southern half
of the Basin continues to severely impact on wetland and floodplain
ecosystems. Whilst portions of the Barmah-Millewa Forest have received
limited flooding as recently as 2005, the last significant flooding
of the mid and lower floodplains of the Murray downstream of Euston
was 12 years ago (see Figure 4). Floodplain vegetation is under severe
stress. The 2007 Living Murray Icon Site condition report indicates
that up to 80 % of River Red Gums are declining or dead at significant
wetlands along the Murray, such as Koondrook-Perricoota Forest and the
Chowilla floodplain.
In November 2007, aerial surveys of waterbirds along
the Murray indicated that the drought had greatly reduced the availability
of wetland and floodplain habitat and this had a severe impact on waterbird
abundance and breeding. The greatest number of birds was recorded in
the Lower Lakes, Coorong and Murray Mouth where a total of about 250,000
birds and 42 species were observed. Most of the other Living Murray
icon sites supported low numbers and very little breeding.
In May 2008 a small volume of environmental water
(7.7 GL) was delivered to Gunbower Forest and this has stimulated an
encouraging response from plant and animal life. Monitoring teams have
reported that tortoises are breeding, frogs are spawning and ducks have
arrived to feed. This response emphasizes the importance of using the
small volumes of environmental water available, to maintain drought
refuges along the river and avoid loss of threatened species.
Overall, however, the riverine environments across
the southern and central regions of the Basin are in severe decline
and this is not expected to improve until there is a very significant
improvement in rainfall and system inflows.
In the northern Basin, the benefits of good summer
rainfall and associated flooding are still evident at some sites. For
instance, at Narran Lakes it has been estimated that over 80,000 chicks
(mostly Straw-necked Ibis) have successfully fledged, and although the
water is receding, the lakes are now dominated by thousands of ducks
and teal. Most wetlands and lakes along the Warrego and Paroo Rivers
are also drying up, but those still containing some water are supporting
large concentrations of waterbirds.
THE LOWER LAKES
The flow over Blanchetown Weir (Lock 1) is being carefully
managed to maintain the water quality at the major urban pumping stations
between Blanchetown and Wellington. Also, a target flow of 900 ML/day
is passing downstream to Wellington and into the Lower Lakes. This flow,
along with local rainfall and reduced evaporative losses during the
winter months, has allowed the water level in Lake Alexandrina to gradually
rise from its record low of -0.5 m AHD in April 2008 to its current
level of -0.26 m AHD. This has provided some short term relief and has
delayed the potential for acidification in Lake Alexandrina. To reduce
the risk of acidification in Lake Albert, water continues to be pumped
from Lake Alexandrina, and this has resulted in Lake Albert’s water
level increasing from about -0.6 m AHD in April 2008 to about -0.20
m AHD.
However, with the arrival of warmer weather in spring,
evaporative losses will start to increase, and the level of Lake Alexandrina
is expected to start falling again. This will be closely monitored while
short and longer term management strategies are developed to maintain
Lakes Alexandrina and Albert above acidification thresholds.[19]
Bruce Campbell of the MDBC, in discussing the drought contingency planing
for the Southern MDB, said that present drought is unprecedented.[20]
The difference with earlier droughts is that the temperature is higher
and a one degree increase in temperature means a 4% increase in evaporation.
The dry year evaporation losses of the Murray between the Hume Dam and
Wellington in SA are over 1100 GL per annum. The MDBC did a calculation
based on minimum inflows and found a shortfall of 340 GL. He discussed
the lessons learned from this problem.[21]
- We need a more robust rescue strategy
- There is significant floodplain stress with 80% of river red gums
below Echuca dead or dying, Chowilla Ramsar site has not had a flood
for a decade, and salt mobilisation is likely to be significant after
the next flood
- Acid sulphate soils is a new emerging issue along the lower Murray
and lower Lakes
- Contingency measures are addictive and less effective the next time
they are used, eg with wetland disconnections
- Water trade works – Productivity Commission report says that economic
impact of drought reduced by 50% by water trade
- Worse case modelling scenarios in 2030 are the same as the low flows
of the past two years.
The current situation is that the drought is not over, allocations are
dependent on rain and inflows, and low autumn inflows that we have had
and dry winter would predict another low inflow spring.
At its meeting of 25 September 2008, the Selection
of Bills Committee deferred consideration of the Bill until its next meeting.
The Greens are on record as intending to refer the Bill to Committee,
and will presumably seek to do so at the next meeting of the Selection
of Bills Committee.[22]
This may affect the Government’s ability to meet the COAG target date
for commencement of the Bill of 1 November 2008.
It should also be noted that the Senate Rural and Regional Affairs and
Transport Committee has recently tabled its report
on Inquiry into Water management in the Coorong and Lower Lakes (including
consideration of the Emergency Water (Murray-Darling Basin Rescue) Bill
2008).[23] However, it appears the terms
of reference for this inquiry also incorporate a report into broader Murray-Darling
Basin Management issues, with a separate reporting date on December 2008.[24]
The Coalition does not appear to have made any direct statement on the
Bill, although have said in their additional comments in the Senate Rural
and Regional Affairs and Transport Committee report that they support
calls for unconditional referral of powers by the States to the Commonwealth
with respect to water management in the MDB.
Greens Senator Hanson-Young and Independent Senator Xenophon have been
reported as seeking the Commonwealth to pressure Victoria on MBD water
issues so as to provide more water flows downstream, including for the
lower lakes and Coroong wetlands.[25]
According to the Explanatory Memorandum costings for the measures under
Water for the Future (of which the amendments under the
Bill are only a part) were agreed by the Commonwealth Government in April
2008 to an overall amount of $12.9 billion (‘total resourcing’ basis)
over 10 years. There are no separate costings for the measures directly
related to amendments in the Bill.
The MDB Authority will retain the fees and charges, if any, that it collects
for cost- recovery purposes.[26]
The Commonwealth does not have unlimited power to pass laws. The Constitution
sets out a range of matters or issues that the Commonwealth may pass laws
on. Most, but not all, are set out in section 51 of the Constitution.
The Commonwealth does not have a direct power under the Constitution to
pass laws on the environment or water resources. Generally, it has relied
on indirect methods to pass laws on such matters, commonly using the corporations,
interstate and overseas trade and commerce, and external affairs powers
in section 51.
However, section 51(xxxvii) provides that the Commonwealth has the power
to make laws about
… matters referred to the Parliament of the Commonwealth
by the Parliament or Parliaments of any State or States, but so that
the law shall extend only to States by whose parliaments the matters
is referred, or which afterwards adopt the law.
The Constitutional powers on which the Water Act relies are set
out in section 9 of that Act. Notably these include:
- the interstate and overseas trade and commence power - section 51(i)
- the corporations power - section 51(xx)
- the external affairs power - section 51(xxix)
- the incidental power - section 51(xxxix)
- the Territories power - section 122
It appears that none of the powers detailed in section 9 of the Water
Act are constitutionally adequate to support the proposed extension of
the Commonwealth’s powers and functions under the current Bill regarding
MDB water resources. For example, under the 2008 MBD Agreement (and reflected
in the Bill), the MBD Authority, will assume responsibility for the current
functions of the MDB Commission.[27]
One such function is the significant role in the ‘hands-on’ operational
management of water in the MBD. This is not a function that the Commonwealth
can directly legislate for, and the various indirect constitutional powers
mentioned above would not support the application of Commonwealth legislation
in all situations. This is why the States must refer power to Commonwealth
to ensure some of the key proposed amendments in the Bill are constitutionally
valid.
Schedule 1 amends the Water Act based on referrals of power.
Item 1 inserts proposed Part 1A containing proposed
sections 18A–18H after existing Part 1.
Proposed section 18A contains the definitions which are relevant
to proposed Part 1A, including the terms ‘Authority’, Basin Officials
Committee, Murray-Darling Basin and Murray-Darling Basin Ministerial Council.
In particular the term ‘Agreement’ means the Murray-Darling
Basin Agreement, as amended from time to time in accordance with that
agreement and as set out in Schedule 1. This means that the agreement
between the Commonwealth and the relevant States will be included as a
permanent Schedule to the Water Act.
Proposed section 18B deals with the reference of matters by state
Parliament to the Commonwealth Parliament, defining when a State is a
referring State.
A state will be a referring state if the parliament of
the state has referred the matters covered by the items listed in points
a) and b) below, to the Parliament of the Commonwealth: proposed subsection
18B(3).
a) If the State is a Basin state, the power to enact:
Part 1A The Murray-Darling Basement Agreement
Part 2A Management of the Basin water resources to meet critical
human water needs
Part 4 Basin water charge and water market rules (other than for
urban water supply after the removal of the water from a Basin water resource)
Part 4A Extended operation of Basin water charge and water market
rules
Part 10A Transitional matters relating to the Murray-Darling Basin Commission
Part 11A Interactions with State laws, and the Schedules in the Bill
included for the purposes of those Parts (Schedules 1 and 1A).
If the State is not a Basin State, the power to enact Parts 4A and 11A,
as originally enacted by the Water Amendment Act 2008, to the extent
that they deal with matters that are included in the legislative powers
of the parliament of the state.
b) a limited subject reference that permits the Parliament of
the Commonwealth to make express amendments to the text referred to in
paragraph (a) referred by the state in question.
Under proposed subsection 18B(5) a State is no longer a referring
State if the parliament of that State repeals its initial reference
of powers referred to in point a) of proposed section 18B above.
However, a state does not cease to be a referring State because
of the repeal of its initial reference of powers
The Agreement on Murray-Darling Basin Reform – Referral (Referral
IGA) will provide that the Commonwealth will not make any amendments to
Parts 1A, 2A, 4, 4A, 10A and 11A and Schedule 1 as inserted into the Act
by this Bill without the agreement of all referring Basin States.
Proposed section 18C provides for regulations to be made to amend
Schedule 1 to update the text of the revised ‘Agreement’
set out in Schedule 1. According to Note 1 to proposed subsection
18C(1), amendments to the ‘Agreement’ can be made with the agreement
of the MDB Ministerial Council. Under proposed subsection 18C(3)
the sunsetting provisions of the Legislative Instruments Act 2003
do not apply to regulations made for the purposes of this section.
Proposed section 18D provides that any protocols made by the MDB
Authority under a Schedule to the Agreement (set out in Schedule 1) are
legislative instruments. According to the Explanatory Memorandum, the
protocols allow the MDB Authority to develop rules and procedures to give
effect to the Schedules made under the Agreement from time to time.[28]
Proposed section 18E of Part 1A transfers functions,
powers and duties of the MDB Commission to the MDB Authority . It also
confers on the MDB Authority functions, powers and duties as contained
under the Agreement, insofar as they relate to the water and other natural
resources of the MDB, though requiring the MDB Authority to comply with
the Agreement in exercising these functions.
However, in performing its functions under the Agreement, proposed
subsection 18E(4) places limits on the ability of the MDB Authority
to exercise its powers under Part 10 of the Water Act which deals
with special powers of the MDB Authority. An authorised officer does not
have the power to enter land under subdivision C of Part 10
for the purposes of monitoring compliance of, or searching for evidence
of a breach of the provisions of proposed Part 1A.
Proposed subsection 18E(6) qualifies the MDB Authority’s power
to enter land in order to gather information as part of carrying out its
functions under proposed Part 1A. An authorised officer must not
enter a premises unless they reasonably believe that it is necessary for
the performance of the MDB Authority’s functions. Hence, the conditions
of entry are the same as those required by the MDB Authority in exercising
its general powers to enter land for the purpose of gathering information.
Proposed section 18F confers on the Basin Community Committee
(‘the Committee), powers and duties as contained under the Agreement,
insofar as they relate to the water and other natural resources of the
MDB, though requiring the Committee to comply with the Agreement in exercising
these functions. These functions are in addition to those listed under
existing subsection 202(2) of the Water Act.
The MDB Authority is required to manage money and assets under the Agreement
in accordance with the terms of the Agreement and its purpose: proposed
section 18G.
If the Living Murray
Initiative requires the MDB Authority to manage the water rights
and interests held under the Living Murray Initiative, then the
MDB Authority must do so: proposed section 18H.
Item 2 inserts proposed Part 2A containing proposed sections 86A–86J
into the Water Act after existing Part 2.
Proposed Part 2A requires the Basin Plan to include certain arrangements
for meeting critical human water needs as specified in the Reform
IGA.
Proposed subsection 86A(2) defines critical human water
needs as those needs for a minimum amount of water, that can only
reasonably be provided from Basin water resources, required to meet:
- core human consumption requirements in urban and rural areas and
- those non-human consumption requirements that a failure to meet would
cause prohibitively high social, economic or national security costs.
In formulating the Basin Plan, the critical human needs to be taken into
account must be informed by the following principles agreed to in the
3 July 2008 Reform IGA:
- that critical human water needs are the highest priority water use
for communities who are dependent on Basin water resources: proposed
subparagraph 86A(1)(a) and
- conveyance water[29] will receive first priority from the water available in the
River Murray System: proposed subsection 86A(3).
According to proposed subsection 86A(3) the River
Murray System is the aggregate of:
- the main course of the River Murray upstream of the eastern boundary
of South Australia
- all tributaries entering that part of the main course upstream of
Doctors Point (near Albury)
- all effluents and anabranches of that part of the main course
- the watercourses connecting Lake Victoria to the main course
- the Darling River downstream of the Menindee Lakes Storage
- the upper River Murray storages, namely:
- Lake Victoria
- the Menindee Lakes Storage
- the storages formed by Dartmouth Dam and Hume Dam
- the storages formed by the weirs, and weirs and locks, described
in Schedule A to the Agreement that are upstream of the eastern boundary
of South Australia, and
- the River Murray in South Australia.
According to proposed section 86B the Basin Plan must deal with
the following mandatory matters:
- include a statement of the amount of water required in each Basin
State that is a referring State (other than Queensland) to meet the
critical human water needs of the communities in the State that are
dependent on the waters of the River Murray System: proposed paragraph
86B(1)(a)[30]
- include a statement of the amount of conveyance water required to
deliver the water to these communities: proposed paragraph 86B(1)(b)
- specify water quality trigger points and salinity trigger points at
which water in the River Murray System becomes unsuitable for meeting
critical human water needs: proposed paragraph 86B(1)(c).
Proposed section 86C sets out the additional matters that must
be specified in the Basin Plan in relation to monitoring, assessment and
risk management including:
- arrangements for monitoring matters relevant to critical human water
needs, including monitoring the quality, quantity and flows of surface
water, the health of ecosystems and social impacts on communities the
process for assessing, and managing risks to critical human water needs
associated with, inflow prediction:
- in the River Murray System, and
- in relation to works that are under the control of the body that
is entitled, under the Snowy Hydro Corporatisation Act 1997
of New South Wales, to the Snowy water licence within the meaning
of that Act
- the risk management approach for inter‑annual planning relating
to arrangements for critical human water needs in future years.
The risk management approach will involve the making of decisions about
whether water is made available, in a particular year, for uses other
than meeting critical human water needs; or is set aside for critical
human water needs in future years: proposed subsection 86C(2).
Proposed section 86D sets out matters relating to Tier 2 water
sharing arrangements.
Part X of the Agreement creates a three tier system of water sharing
arrangements and provides that the triggers for moving between the tiers
are laid out in the Basin Plan. Tier 1 arrangements are used in periods
of normal water availability. Tier 2 arrangements are applied when there
is insufficient water under Tier 1 sharing arrangements to meet conveyance
water needs. Tier 3 arrangements come into force in extreme and unprecedented
circumstances.
Proposed section 86D states that the Basin Plan must detail the
conditions under which Tier 2 arrangements would apply and spell out a
reserves policy[31] associated
with this, as well as stating the conditions for a return to Tier 1 arrangements.
The Basin Plan must also specify the arrangement for carrying water over
in storage from one year to another and can provide for any other matters
necessary to give effect to water sharing arrangements.
Proposed subsection 86D(3) provides that arrangements for carrying
water over must recognise both (a) South Australia’s right (as provided
for in clauses 91 and 130 of the Agreement) to store its entitlement to
water and (b) that New South Wales, Victoria and South Australia are each
responsible for meeting the critical human water needs of their own States,
and will decide how water from its share is used.
Proposed subsection 86D(4) states that ‘State water sharing
arrangements’ relevant to New South Wales, Victoria and South
Australia, are the provisions of the Agreement dealing with the sharing
surface water in the Murray River System.
The Basin Plan must detail the conditions under which Tier 3 arrangements
would apply as well as stating the conditions for a return to Tier 2 arrangements.
The conditions under which Tier 3 arrangements would apply must be due
to there being:
- extreme and unprecedented low levels of water availability in the
River Murray System: proposed paragraph 86E(2)(a)
- extreme and unprecedented poor water quality in the water available
in the River Murray System to meet critical human water needs: proposed
paragraph 86E(2)(b)
- an extremely high risk that water will not be available in the River
Murray System to meet critical human water needs during the next 12
months: proposed paragraph 86E(2)(c).
Proposed section 86F provides for an emergency response process
in the event that water quality or salinity trigger points determined
by the Basin Plan are reached. If the MDB Authority’s proposed response
plan affects State water sharing arrangements or Border Rivers water sharing
arrangements, then the MDB Authority is only allowed to implement the
plans as long as the Murray-Darling Basin Ministerial Council has given
its consent: proposed subsection 86F(2).
In relation to water resources, the Basin Officials Committee and the
agencies of the Basin States that are referring State or the Australian
Capital Territory, and operating authorities, infrastructure operators
and holders of water access rights, are prohibited from acting in a manner
that is inconsistent with any of the matters included in or specified
in the Basin Plan that relate to critical human water needs: proposed
section 86H.
Proposed section 86J sets out additional powers of the MDB Authority
in terms which are similar to those in proposed section 18E above.
Item 3 proposes to insert proposed Part 4 consisting of proposed
sections 91–100A after existing Part 3.
Essentially, the key amendments in proposed Part 4 combine to
give effect to the goal of creating a uniform approach to the regulation
of water markets and water charges in the Basin. Significantly, the ACCC
is charged with the role of developing and enforcing water charge and
water market rules which are informed by the policy and reform commitments
agreed to in the National Water Initiative. After considering the
advice provided by the ACCC, the Minister is responsible for making the
water charge and water market rules.
Proposed subsection 91(1) provides for the following regulated
water charges:
- fees or charges (however described) payable to an irrigation infrastructure
operator for:
- access to the operator’s irrigation network
- changing access to the operator’s irrigation network
- terminating access to the operator’s irrigation network
- surrendering to the operator a right to the delivery of water
through the operator’s irrigation network
- bulk water charges
- charges for water planning and water management activities
- a fee or charge (however described) that relates to:
- access to water service infrastructure
- services provided in relation to access to water service infrastructure
- services provided through the operation of water service infrastructure
- the taking of water from a water resource.
Proposed subsection 91(2) clarifies that Division 1 (water charging
rules) applies to a charge referred to above only to the extent that to
the charge relates to:
- MDB water resources
- water service infrastructure that carries MDB water resources
- water service infrastructure that carries water that has been taken
from a MDB water resource
- water access rights, irrigation rights or water delivery rights in
relation to MDB water resources.
Under proposed section 92 the Minister may make water charge rules,
applying in MDB States that are referring States and in the Australian
Capital Territory. Water charge rules are legislative instruments and
as such are subject to a disallowance regime.
Significantly, proposed paragraph 92(3)(c) provides that water
charge rules may give the ACCC the power to determine or approve all regulated
water charges. Similarly, proposed paragraph 92(3)(c) provides
that the rules may give the ACCC the power to accredit arrangements under
which a State agency may determine or approve a regulated water charge.
In addition proposed paragraph 92(3)(e) allows the ACCC to accredit
arrangements under which a State agency may determine or approve any type
of regulated water charge.
The Minister must seek advice from the ACCC on any proposed amendments
or revocations of the water charge rules: proposed subsection 93(1).
Proposed subsection 93(5) clarifies that the regulations are to
establish the process which the Minister is obliged to follow in amending
or revoking water charge rules.
Proposed section 94 imposes the requirement on the ACCC to monitor
regulated water charges and compliance with water charge rules. Under
proposed subsection 94(2) the ACCC is to give the Minister a report
on the results of the monitoring.
Proposed section 97 sets out the water market rules. Significantly,
proposed paragraph 97(1)(a) provides that the Minister may make
‘water market rules’ applying to referring Basin States
and the Australian Capital Territory, where these rules relate to an act
that an irrigation infrastructure operator does, or fails to do, that
prevents or unreasonably delays arrangements being made that would reduce
the share component of a water access entitlement of the operator to allow:
- a person’s entitlement to water under an irrigation right, or
- a part of that entitlement
to be permanently transformed into a water access entitlement that is
held by someone other than the operator.
The provisions in proposed section 98 mirror those in proposed
section 93 above.
As the Explanatory Memorandum states, proposed section 100A is
designed to ensure that the ACCC has the necessary enforcement powers
provided for in Part 8 of the Water Act and under section 155 of
the Trade Practices Act 1974, so that it is able to carry out its
functions.[32]
Item 4 inserts proposed Part 4A containing proposed
sections 100B–100D before existing Part 5.
Proposed Part 4A puts into effect Reform IGA allowing
the Basin States to extend the operation of water charge rules and/or
water market rules to areas of the State outside Basin on an ‘opt in’
basis. It extends the geographical application of the ACCC’s regulatory
role in relation to the water charge rules and/or water market rules.
Significantly, it gives the States a choice of working to achieve a uniform
approach to regulation across Australia. The ability to ‘opt in’ also
applies to jurisdictions outside the Basin, including Western Australia,
Tasmania and the Northern Territory: proposed subsections 100B(1) and
100C(1) respectively.
Item 5 inserts proposed Part 10A consisting of proposed
sections 239A–239W after existing Part 10.
This part deals with the transition of functions, duties and powers from
the MDB Commission to the MDB Authority. Proposed section 239A
contains the definitions of the terms which are relevant to the new Part.
Proposed section 239C provides that the transitional assets of
the MDB Commission become assets of the MDB Authority. However, proposed
section 239D provides that the ownership and control of River Murray
Operational assets are unaffected, as is the revised Agreement to these
assets. Also, proposed Part 10A does not affect the Living Murray
Initiative assets: proposed section 239E.
Proposed section 239F provides that the transitional liabilities
of the MDB Commission become those of the MDB Authority. Similarly, proposed
section 239T provides that all monies held or controlled by the MDB
Commission are ‘transitional amounts’ and must be credited to the MDB
Special Account.
Item 6 proposes to insert Part 11A consisting of proposed sections
250A-250E after existing Part 11. Proposed section 250B provides
that in all circumstances, the Commonwealth legislation is not intended
to exclude or limit the concurrent operation of a State law. The Explanatory
Memorandum provides the example of where a State sets a more stringent
target. That target would not be inconsistent with the Commonwealth target
and thus would continue to be operable.[33]
Proposed section 250C provides that Commonwealth water legislation
does not apply to matters declared by a law of a referring State to be
excluded matters.
Proposed section 250D provides that a referring State can displace
the operation of the Commonwealth water legislation in relation to certain
provisions of State laws which would otherwise be inconsistent with the
Water Act.
Item 7 inserts the MDB Agreement into existing Schedule 1 of the
Water Act. This is consistent with proposed section 18A. Item
7 also inserts a new Schedule 1A consisting of a map which delineates
the boundaries of the MDB but does not show all of the water resources
within the MDB which are covered by the Water Act.
Item 1 repeals the whole of the Murray-Darling Basin Act 1993
which provides for the approval of amendments to the former MDB Agreement
relating to the appointment and terms of conditions of Commissioners and
Deputy Commissioners and various miscellaneous provisions relevant to
that Agreement.
Part 2 contains miscellaneous amendments to a number of Acts.
Item 11 in the Table in section 7 of LIA sets out the Schedules to the
former Murray-Darling Basin Agreement.[34] These are to be repealed.
Minor amendments are made to secure the ACCC’s access to information
relating to the effect of, and compliance with, the water
charge and water charge market rules as they apply if a State or the Northern
Territory chooses to ‘opt in’ under proposed Part 4A. The ACCC’s
regulatory powers for water markets and/or water charges will extend to
areas outside the Basin in recognition that proposed
Part 4A allows States and the Northern Territory to ‘opt in’.
Proposed subsection 155AAA(21) refers to information obtained
by the ACCC in relation to its functions and powers under proposed
Parts 4 and 4A, thus bringing it under the category of ‘protected
information’. This is to make sure that such information is treated in
the way as other information obtained by the ACCC in performing its monitoring
and enforcement functions.
Items 7–37 contain consequential amendments, in particular to
a number of definitions to take into account other amendments to the Water
Act.
Item 42 inserts proposed section 9A after existing section
9 to make clear for the avoidance of doubt the Constitutional basis for
the proposed new Parts to the Water Act which are contained in this Bill.
Existing subsection 21(3) provides that the Basin Plan must promote the
wise use of all the Basin water resources and promote the conservation
of declared Ramsar wetlands in the MDB. Item 47 proposes that
an additional consideration must be taken into account in formulating
the Basin Plan. That consideration is the ecological character descriptions
of:
- all declared Ramsar wetlands within the MDB and
- all other key environmental sites within the MDB
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.
Item 49 inserts proposed subparagraph 21(4)(c)(x)
which places a requirement on the MDB Authority and the Minister to have
regard to ‘any other arrangements between States for the sharing of water’
when developing the Basin Plan.
Item 60 inserts proposed section 43A which requires
the MDB Authority to seek feedback from the Murray-Darling Ministerial
Council on the proposed Basin Plan. In providing the Ministerial Council
with its plan, the MDB Authority must also advise on the socio-economic
implications of its proposed Basin Plan: proposed subsection 43A(3).
The Ministerial Council has six weeks to respond in writing to the proposed
Basin Plan, providing comments on any aspect of the plan that is not of
a factual or scientific nature: proposed subsection 43A(4). Failure
to provide comments within that timeframe will be construed as the Ministerial
Council having no comments: proposed subsection 43A(5).
Where one or more the Ministerial Council’s members disagree with any
relevant aspect of the Basin Plan, proposed subsection 43A(6) specifies
the procedure that the MDB Authority must follow. The MDB Authority must
consider the matters and undertake and relevant consultations: proposed
paragraphs 43A(6)(a) and (b). The MDB Authority must then either
confirm the proposed Basin Plan or alter the proposed Basin Plan, and
give each member of the MDB Ministerial Council a copy of the altered
proposed Basin Plan, together with the Authority’s views: proposed
paragraph 43A(6)(c).
Once that has been done, the MDB Authority must prepare a document that
summarises all of the following:
- any submissions it received in response to its consultations and how
it addressed those submissions
- the extent (if any) to which its consideration of those submissions
has affected the version of the Plan, or the views, given to the members
of the MDB Ministerial Council, and
- publish on its website a copy of that document: proposed paragraph
43A(6)(d).
The Ministerial Council then has three weeks to provide further written
notice to the Minister about its views on the proposed Basin Plan: proposed
subsection 43A(7).
Item 63 provides for the insertion of proposed subsection 44(5A)
which states that should the Ministerial Council have no feedback on the
proposed Basin Plan, this does not affect the Minister’s power to give
suggestions or directions to the MDB Authority.
Item 64 inserts proposed section 47A which applies once
the MDB Authority has complied with existing section 47 of the Water Act.
Section 47 sets out the procedure to be followed by the MDB Authority
when it proposes to amend the Basin Plan. Proposed section 47A
sets the time frame and process for the MDB Authority to seek comments
from the MDB Ministerial Council on a proposed amendment. This is in
similar terms to proposed section 43A.
Item 77 inserts proposed section 74A in relation to the
States applying the risk management framework.
The National Water Initiative identifies three
risks of reduction or less reliable water allocation, under their water
access entitlements, arising from reductions to the consumptive pool
as a result of:
- seasonal or long-term changes in climate
- periodic natural events such as bushfires and drought, and
- bona fide improvements in the knowledge of water systems’ capacity
to sustain particular extraction levels.
Accordingly, the National Water Initiative created a risk assignment
framework intended to apply to risks relating to future reductions in
availability if water for consumptive use. Basically, the current situation
is that water allocations or reliability for consumptive use were to be
shared as follows:
- Until 2014 the risks were to be borne by users
- After 2014, the risks were to be shared in the following way:
- water access entitlement holders to bear
the first 3% reduction in water allocation under a water access
entitlement
- State/Territory governments and the Commonwealth Government to
share one-third and two-thirds respectively reductions in water
allocation under water access entitlements of between 3%
and 6%, and
- State/Territory and Commonwealth governments to equally share
reductions in water allocation under water access entitlements
greater than 6%.[35]
In the Reform IGA, the Commonwealth agreed to take on a greater share
of the risks relating to future reductions in water allocations and agreed
to do so at an earlier date in those Basin States which assumed their
risk sharing obligations under clauses 48 to 50 of the National Water
Initiative (as modified by clause 10.1.3 of the Agreement on Murray-
Darling Basin Reform), and did so by enacting legislation to give
effect to this by 30 June 2009.
Proposed section 74A mandates that the Minister must make a written
determination as to whether a Basin State has applied the risk management
framework provided for in clauses 48 to 50 of the National Water Initiative,
as modified by clause 10.1.3 of the Agreement on Murray-Darling Basin
Reform, in its water management law by 30 June 2009. The capacity
to extend for a later date is made where it is the case that despite its
best endeavours, a Basin State is unable to pass the required legislation
before 30 June 2009. Such a determination is not a legislative instrument:
proposed subsection 74A(5). Where the Minister has not made a determination
in relation to a Basin State under proposed section 74A, the risk
allocation provision as originally enacted will continue to apply.
The Minister may revoke a determination in writing if satisfied that
a State water management law no longer gives effect to that framework:
proposed subsection 74A(3). In considering whether to do so, the
Minister may ask the National Water Commission for advice.
Where a Minister has made a determination under proposed section 74A,
items 76 and 79 insert amendments containing the allocation
of risk in relation to reductions in water availability, which provide
for the additional share of risk that the Commonwealth has agreed to take
on – see table below
| Reduction
due to new knowledge over 10 year period |
Water
access entitlement holder share |
State
share |
Commonwealth
share |
| 0
to 3% |
All of
the reduction to 3% |
Nil |
Nil |
| More
than 3% |
All of
the reduction to 3% |
Nil |
100 %
of any reduction from 3% and above |
Source: Explanatory Memorandum p. 32.
Items 98–101 propose amendments to existing subsection 172(1)
of the Water Act which sets out the functions of the MDB Authority. In
particular, item 99 inserts proposed paragraph 172(1)(ea)
so that one of the functions of the MDB Authority will be to develop,
in consultation with the Basin States, an integrated water model for the
MDB. Item 100 repeals existing paragraph 172(1)(g) and inserts
proposed paragraph 172(1)(g) to allow the MDB Authority
to make recommendations to the Commonwealth or an agency of the Commonwealth
about matters that the MDB Authority considers could affect the quality
or quantity of MDB water resources.
Items 115–117 propose amendments to existing Subdivision C of
Part 9 of the Water Act which relates to the terms and conditions of employment
of MDB Authority members. Each of those items omits the reference to
the ‘Authority Chair and substitutes a reference to the ‘Chief Executive’
to reflect the fact that the Chief Executive will now be the full time
Agency Head.
Items 118–121 propose amendments to existing subsection 189(2)
dealing with the conditions under which a Minister may terminate the appointment
of MDB Authority members. Under item 121 which inserts proposed
paragraph 189(2)(ea), one of the circumstances for termination is
where an MDB Authority member takes on additional employment (without
the Minister’s approval) which conflicts or may conflict with the performance
of their duties as an MDB Authority member.
Items 122–127 amend existing section 201 which relates to the
Basin Officials Committee. These amendments reflect the fact that the
Basin Officials Committee is now established under the revised Agreement.
Item 128 inserts proposed sections 201A-201C. Proposed
section 201A provides that the Chair of the Basin Officials Committee
is to be appointed by the Minister by written instrument. The Chair must
be the Secretary of the Department or an SES employee: proposed subsection
201A(2). The Chair of the Basin Officials Committee is to hold office
for the period specified in their instrument of appointment: proposed
section 201C.
Existing section 202 provides that the MDB Authority must establish an
advisory committee, known as the Basin Community Committee. Under existing
subsection 202(5) the Basin Community Committee’s membership must include
at least one MDB Authority member and at least 8 individuals who are ‘water
users’ or representatives of one or more water users. Item
130 amends subsection 202(7) to extend the definition of ‘water users’
to include a person who is engaged in interception activities with a significant
impact on water resources.
Items 134–136 amend existing section 205 of the Water Act to clarify
that the Minister cannot give procedural directions to the Basin Officials
Committee. Existing subsection 205(1) provides that the MDB Authority
may give an advisory committee written directions about the way in which
the Basin Officials Committee is to carry out its functions and procedures
to be followed in relation to meetings. However, item 135 inserts
proposed subsection 205(1A) which provides that the Basin Community
committee is not subject to direction under subsection 205(1) in relation
to its functions, powers and duties under proposed section 18F.
Item 150 inserts proposed sections 213A and 213B in relation
to the requirement for the MDB Authority to prepare an annual corporate
plan and budget which will cover both its role and functions under the
revised Agreement. That corporate plan may be varied at any time, except
for that part of the corporate plan approved by the Ministerial Council
under the revised Agreement.
Schedule 3 contains transitional provisions. Items 1-3 relate
to the transfer of staff and their entitlements from the MDB Commission
to the MDB Authority.
Items 4-6 relate to the appointment of the Chief Executive of
the MDB Authority.
[3]
Living Murray internet site: http://www.thelivingmurray.mdbc.gov.au/home;
accessed 7 October 2008.
Angus Martyn, Juli Tomaras and Bill McCormick
14 October 2008
Bills Digest Service
Parliamentary Library
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