New South Wales-Queensland Border Rivers Amendment Bill
The Hon. IAN MACDONALD (Parliamentary Secretary) [9.05 p.m.]: I move:
I seek leave to have the second reading speech incorporated in Hansard.
That this bill be now read a second time.
The purpose of the New South Wales—Queensland Border Rivers (Amendment) Bill is to ratify amendments to a 1946 interstate agreement.
It will modify the water sharing arrangements between the states to allow each state more control and independence over management of its share of the resources of the border rivers.
The New South Wales—Queensland Border Rivers Act 1947, and parallel Queensland legislation, ratified an agreement entered into between the states relating to the construction of dams and weirs on parts of the rivers (known as "the border rivers") forming part of the boundary between the states and the sharing of water in those works and rivers between the states.
The agreement includes a provision for the sharing of water between the states based on the equal sharing of water in Glenlyon Dam, in Queensland and the upper reaches of the border rivers, and sharing of naturally occurring downstream inflows based on their state of origin. Under this provision New South Wales is entitled to use 57% of the available regulated resource.
Currently clause 37(2) of the agreement provides for "annual accounting" between the states. This means that the unused portions of each state's annual allocation at the end of the accounting period is pooled and shared amongst both states.
The state with the larger volume of unused allocation effectively forfeits a proportion of its allocation to the other state. The state with the least use or more efficient users is penalised. Annual accounting encourages "use it or lose it" practices, resulting in sub optimal economic results.
An alternative arrangement is to allow "carryover accounting", where unused allocation in one year is carried over within each state's account to be used in the following year or years without restriction. Thus a state's account can only be reduced by the actual use of water.
Water that is not used is then available in subsequent seasons which may be drier and when water has a higher economic value. This differs for the individual user who must use any carryover water in the following season. Any unused carryover water is forfeited and shared with all other users.
On a number of occasions in the past New South Wales and Queensland's utilisation of their annual entitlements have varied such that there was considerable discrepancy between the unused volumes at the end of the accounting year.
The ability to carry over their unused entitlement will enable each state to better manage its resources in line with its allocation policies for individual river pumpers. It will also facilitate each state introducing an individual user accounting system in line with state policies.
The main disadvantage of "annual" accounting for individuals is that it encourages potentially wasteful practices, as it is in the individual's short-term interest to fully use all their available water. Under annual accounting, a portion of the unused share is forfeited to other users.
This may lead to inefficiencies such as the irrigation of low value crops or the filling of farm storages that experience higher evaporation than the major headwater storages. It may also limit the amount of off-allocation flow that can be extracted.
New South Wales has already implemented carryover accounting for its users in the border rivers, by utilising Pindari Dam reserves to allow users to carryover individual accounts. This amendment will make all New South Wales accounting compatible and allow Queensland to implement the scheme for its users.
The next stage in the evolution of allocation management is the introduction of continuous accounting, where there is no annual reconciliation of accounts, they are then managed on a continuous basis.
In continuous accounting, there are no time limits on the use of water within a user's account and it provides further protection of users rights from the activities of other users. In the scheme to be introduced, each irrigation is allowed to have a maximum of 100% in their account at any time, and use up to 100% in any year. For example, if at the start of the season the account is full at 100 ml, during the season the user uses 60 ml, then for that year 40 ml is available. If there have been inflows and the storages are full, there is now 100 ml in the account. This ensures that the user can use another 40 ml this season and have at least 60 ml for use next season, or if he/she uses nothing else this season, 100 ml is available for use in future seasons. Continuous accounting reduces this third party impact even further.
Continuous accounting supports the property rights concept by minimising the effect on an individual's allocation availability by the water use activities of other water users. This protection is not afforded by annual accounting.
It is proposed to introduce continuous accounting in the border rivers before October this year. This initiative will provide consistency between the states and individuals sharing schemes.
The development of continuous accounting is indicative of the resource management improvements being made in the border rivers valley. Environmental flow rules are being developed that will preserve the water-related ecological values of the valley. These rules will be developed in consultation with Queensland while preserving each state's right to determine natural resource management policy within its own territory.
It also demonstrates the commitment of this government to the community consultation process, as the water user community has been vigorously supporting the introduction of continuous accounting.
In addition to the accounting issues, both state governments are working towards the development of a single commercial water business to service both states' customers and to facilitate water trading across the border.
In summary, this amendment will provide sharing consistency with the sharing methodologies of the Murray-Darling Basin Commission and with the schemes being implemented throughout New South Wales for individual users.
I commend the bill to the House.
The Hon. DUNCAN GAY (Deputy Leader of the Opposition) [9.05 p.m.]: I lead for the Opposition on this bill and indicate at the outset that we will not oppose it. The object of the bill is to amend the New South Wales—Queensland Border Rivers Act 1947 to ratify and approve an agreement that was recently reached between the Premiers of New South Wales and Queensland. It therefore amends the existing agreement. The substantive amendment is to replace the system of annual accounting that is used in relation to the sharing of water between New South Wales and Queensland with a system of continuous accounting.
Under a system of annual accounting of water, the unused portions of a State's allocation lapse at the end of an accounting period. For an individual, that means that if he or she does not use his or her water allocation he or she will lose it. To be more precise, under annual accounting, the portion of unused water is forfeited to other users. That may lead to inefficient or wasteful use of water. If, on the other hand, water users are able to carry over the unused portion to meet needs in a future year, obviously there is no incentive to waste water. The continuous accounting method is also more consistent with the concept of a water right. Last year this House passed the new Water Management Act, which included the concept of a compensable water right. That concept was developed with the idea of providing certainty from year to year so that under a licence arrangement, if water is available in the storage system, people know that water is available to a water user.
Continuous accounting is compatible with that concept, in the sense that it provides a capacity for a water user to be able to access water in a future year, provided there is water in storage, whereas at the moment annual accounting means that if a person does not use a water allocation in a designated year, that person will lose the right to be able to access water resources, and the unused portion would then be shared amongst other water users. At the State level, New South Wales is entitled to 57 per cent of the available regulated resource in the border rivers. Under annual accounting, the unused portions of each State's annual allocation at the end of the accounting period is pooled and shared between both States. The State with the larger volume of unused allocation effectively forfeits the proportion of its allocation to some other State. Therefore, under the current arrangement New South Wales water users cannot be guaranteed that they would receive their 57 per cent, because if the water is not used it is shared on an allocation basis that is more likely to approximate 50 per cent. New South Wales, one of the larger States and with a larger entitlement, would be forfeiting some of its allocation to Queensland under that arrangement. The State that has a more efficient use of water is penalised under annual accounting.
Under continuous accounting, the unused allocation in any one year is carried over within each State's account and can be used in the following year or years. Therefore, a State's account can be reduced only by the actual use of water. That is, frankly, fairer and leads to more efficient use of the water. With the added certainty that continuous accounting provides, better and more sustainable resource management can occur. I note also that the Murray-Darling Basin Commission has a similar continuous accounting scheme for the Murray system involving New South Wales, Victoria and South Australia. By virtue of this bill, New South Wales will have a consistent approach to accounting for water in respect of its southern and northern borders. I understand that the Queensland Parliament has already passed similar legislation, so it is important that the New South Wales Parliament passes this bill. I note that in Queensland legislation does not have to go to an upper House but, luckily, that still happens in New South Wales. The Opposition will not oppose the bill. In fact, we will do better than that: we will support it because, unusually for this Government, it is solid, sensible legislation.
The Hon. IAN COHEN [9.10 p.m.]: The Greens are pleased to support the New South Wales—Queensland Border Rivers Amendment Bill, which aims to improve the system of accounting for water in the New South Wales—Queensland border rivers area. I hope that the bill will lead to better management of the precious water that flows in a region that contains some outstanding rivers. As to the Government's record on inland water reform, Kim Yeadon as Minister for Land and Water Conservation took substantial action to release water for environmental purposes, which was much appreciated by the Greens at the time. This legislation is a continuation of that policy. It is clear that inland rivers are under significant stress and that a water quota must be maintained for environmental purposes. Continuous accounting in respect of the border rivers is an appropriate and sensible move on the part of the Government. Some years ago I received a letter from Sarah Moles, co-convenor of the Toowoomba and Region Greens, expressing significant concerns about the environmental damage caused by mismanagement of water in Queensland and proposals to pump water across the border from New South Wales. In that letter, dated 3 May 1996, she stated:
She went on to request information about the New South Wales position on inter-basin transfers and the impact on the North Coast fishing industry and on the Clarence ecosystems and those industries dependent upon them. This letter highlights the concern on the part of many in Queensland at the possibility of significantly upgrading water extraction and use. It is heartening to see recognition of the importance of this resource and the introduction of regulation and accountability measures.
The new Queensland government has revived talk of an inter-basin transfer from the Clarence to the Condamine catchment. Minister for Natural Resources, Howard Hobbs, has been touting a tunnel under the Divide incorporating a hydro scheme, and dam at Elbow Valley.
The Toowoomba Greens oppose the diversion for a number of reasons, and there is a small but growing number of Queensland farmers who are also concerned.
Unfortunately there is a much larger group, notably irrigators, who are lobbying hard to secure government commitment to the project. Darling Downs Vision 2000 has devoted considerable time, effort and money to promoting its benefits to Queensland, and I understand that the Watering Australia Foundation is currently conducting some kind of impact study of its own (on the Clarence system).
I have been active in my regional catchment management organisation (the Condamine Catchment Committee) for a couple of years, and in Landcare for 3 or more. Of great concern to me is that the diversion will be used to justify the enormous (and continuing) investment in resource intensive industries in the Queensland Murray Darling Basin. There are 2 new cotton gins under construction, both near Dalby on the Darling Downs, but the rapid expansion of the pig industry is also of great concern.
Work is due to begin later this year on the DanPork 10,000 sow (100,000 pigs) piggery, export abattoir and feedmill on the Condamine River near Warwick … The Toowoomba Greens also oppose this unsustainable development, partly because it requires a constant and reliable water supply. At a time when all producers in the QMD are having to curtail their own water use to meet environmental flow requirements, here is a multi national being handed 1200M/l of a scarce resource. The branch has issued press releases, but little coverage is gained.
This issue is high on my list of priorities and I hope that the Government will take this opportunity to rule out categorically any transfer of water from the Clarence and other significant New South Wales rivers. The border rivers agreement is now 50 years old and is a relic from an age when the water resources of this country were considered to be available for unlimited use in the arid interior of the continent. The consequences of inland river mismanagement are now leading to obvious environmental, social and economic disasters. I remind honourable members of the well-publicised salinity problem. It is good to see governments and rural and farming groups working to address that issue now and into the future. Such action is part and parcel of the careful regulation of the river systems and appropriate land use rather than overextraction.
The agreement allocates water between the States. Once the allocation is made, the use of water in this State is determined in accordance with the new Water Act. One of the main issues that the Greens raised when the Water Act was debated in this place last year was compensation for reduced water rights. It appears likely that this issue is now threatening the environmental gains that the Government promised were a key aspect of the bill. The Government is now determining the bulk access regimes that will apply in order to ascertain the quantities of water that will be available for various purposes, including environmental flows, in each catchment. The Greens have never accepted the claims of irrigators and other water users that they have any right or entitlement to water. Water use should be regarded as a privilege, not a right. The Government has accepted unthinkingly the assertion that water users should be compensated for increased environmental flows. The Greens do not accept that any water user should be compensated for water that is urgently needed for environmental purposes. We do not accept that any land-holder or water user has any property rights to extract and use water.
The border rivers agreement is to be redrafted to ensure that it reflects current thinking about sustainability. In the meantime, the Government must resist the demands of water users. The insatiable demand for water has far outweighed the level that would ensure the long-term sustainability of this resource. Current rates of use threaten the environmental, social and economic health of the inland. That said, the Greens are pleased to support this bill as a step towards regulation.
The Hon. RICHARD JONES [9.15 p.m.]: This bill amends the New South Wales-Queensland Borders Rivers Act 1947—an ancient Act that is still in force—in order to ratify and approve an agreement between New South Wales and Queensland to replace the existing system of annual accounting used in the sharing of water between the States with a system of continuous accounting. Under the existing annual accounting system, any unused portion of the 57 per cent annual water allocation to New South Wales is pooled and shared between both States at the end of each accounting period. The system is therefore said to encourage potentially wasteful practices as it is in an individual's short-term interests to use all available water each year. In contrast, the new continuous accounting system will allow any unused entitlements to be carried over within each State's account to be used in the following year or years. It is therefore said to enable each State to manage its resources better.
Continuous accounting also supports the property rights concept by minimising the effect that the water use activities of other water users has on water availability. Under continuous accounting, water not used will be made available in subsequent drier seasons or when water has a higher economic value. While there is no doubt that under the current system the State that uses water more efficiently is penalised—this must be rectified as soon as possible—many more important matters also need to be addressed in relation to the efficient, effective and ethical operation of the agreement. For example, environment groups have raised concerns about the lack of priority given in the agreement to ecological and environmental values in allocating water and the lack of any recognition of the need to apply the precautionary principle and the principles of ecologically sustainable development to protect, enhance and restore ecological processes and biological diversity.
The groups have also expressed concerns about the lack of recognition of the need to deliver environmental flows and provide for the passage of fish via fishways and weir removal, and the lack of any requirement for consistency with the memorandum of understanding between New South Wales and Queensland over co-management of the border rivers. The agreement also lacks both a requirement for consistency with the Murray-Darling Basin cap on water diversions and a requirement to comply with threatened species legislation, such as the Threatened Species Conservation Act and the Fisheries Management Act. Many of these values, principles, needs and requirements are now enshrined in the New South Wales Water Management Act 2000 and will, therefore, determine how our portion of border rivers water is used.
This legislative framework, however, cannot and will not have any force in Queensland, and will therefore not affect the way in which Queensland's portion of the water is managed. Despite the fact that Queensland is a voluntary signatory to the memorandum of understanding in regard to co-management of the border rivers and the Murray-Darling Basin cap on water diversions, the provisions of that legislation will not have any legal force in Queensland unless they are enshrined in the Border Rivers Agreement. While it is not possible to amend the agreement through this bill, it is clear that the Act which provides for the agreement's ratification and implementation—the New South Wales—Queensland Border Rivers Act 1947—is out of step with the times, deficient in many areas and urgently needs to be rewritten. I therefore ask the Minister to give a commitment in this House today that the Government will ensure that a review of that ancient Act is embarked upon as soon as possible.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [9.19 p.m.]: The Australian Democrats are concerned about this bill. We recognise that it is a step forward for New South Wales and Queensland to be talking about rivers and their allocations of water. This is the third agreement between the Premiers of New South Wales and Queensland over the management of the Severn, Dumaresq, Macintyre and Barwon border rivers and tributaries and their underground water. A key aspect of the Act is the water-sharing arrangement entered into by the two States. Both the New South Wales and Queensland Acts deal with the construction of weirs and dams and sharing the natural resource of the border rivers. A substantial part of this bill merely makes procedural amendments which relate to the ratification of the amendment to the principal agreement. However, it will change the system for accounting for water extracted from the border rivers from annual to continuous.
Under the current annual accounting system, the unused portion of each State's annual water allocation at the end of the accounting period is pooled and then shared between the States. It has been argued that this system of accounting usually resulted in the State which has been the most efficient in using its allocation of water forfeiting a proportion of its allocation to the other State. That takes away any incentive for sustainable usage of water as most users under this system had to use it or lose it. This bill will implement a continuous accounting system where any unused allocations are carried over and can be used year after year. It has been argued that this will lead to better efficiencies in water use, that it will provide an incentive not to waste water, and that it goes some way to ensuring secure entitlements to water users along the rivers. However, the Democrats have several concerns in regard to the bill.
The Act does not entirely reflect the memorandum of understanding between New South Wales and Queensland over co-management of the border rivers. The intergovernmental memorandum of understanding states that the signature parties agree to ecologically sustainable development principles as set out in the National Strategy for Ecologically Sustainable Development. However, there is nothing in the principal Act or in this bill that reflects such a commitment. The objects of the Act need to be reviewed, as there is a need for inclusion of ecologically sustainable development, delivery of environmental flows, precautionary principle, protection of ecological processes and biodiversity, wetlands and floodplains. The objectives listed in the Water Management Act would be a good place to start. However, this is beyond the leave of the bill, and I want an assurance from the Government that the Act will be reviewed in the near future.
Under the provisions of the bill, water is still treated as a commodity that can be stored like wool and will be available whenever it is needed. That is based on wrong assumptions, because storage capacity is limited, there is continuous loss of water from the storage due to evaporation and seepage to groundwater. There may be low flows in the river. The savings are thus a wasting asset. After a few years of low rainfall, the amount of water hypothetically saved in previous years may exceed the total amount actually stored and available. To treat water as a commodity is a ridiculous concept and is cause for concern. It is one thing to set up these agreements in order to stop wastage of water and to make it tradable, but it is another to assume that that is the only factor in an ecosystem. The current legislation has gone too far towards locking in economic principles of pricing without having regard to other ecological aspects which will cause considerable problems and angst in the future.
The State of the Environment report noted that extractions from each of the border rivers were below the long-term cap. However, no long-term adjusted cap models were developed at the time of assessment and extractions from the Barwon-Darling catchment area substantially exceeded the long-term cap to agricultural irrigation. There was no mention of the need to honour the Murray-Darling Basin cap on water diversions. The Act also needs to be amended to provide for fish passage in inland waterways. For example, weir removal is necessary for some of the migratory species and the Act needs to be more in line with threatened species legislation. I thank Stuart Blanch from the Healthy Rivers Campaign of the Australian Conservation Foundation for some of this information.
The bill ignores the Water Management Act 2000 and the hierarchies of water allocation established by section 60 of that Act. No consideration is given to the sustainability of saving water from year to year. It is important that a cap be determined for the total allocation of water at the beginning of each irrigation year and after an environmental flow has been allocated for the coming year. There must be a limit to the amount of water savings that can be carried forward from year to year. It must not exceed 100 per cent of the license amount, but it may well need to be lower in times of water shortage. A practical consideration is that not everybody can cash in their allowance at the same time, particularly in a low rainfall year.
The possibility of saving water allocations from year to year may encourage on-farm storage of floodplain water. This can damage the environment of the floodplain and downstream as there is no holding capacity in the dam in times of floods. It may also encourage unlicensed water pumping. The Australian Democrats recognise that this bill is a step towards having a more realistic agreement, but we are concerned that a number of important factors have not been taken into account. We hope that these concerns will be addressed in the future.
The Hon. EDDIE OBEID (Minister for Mineral Resources, and Minister for Fisheries) [9.26 p.m.], in reply: I thank all honourable members for their contributions. I am aware that the Hon. Richard Jones requested that the Minister give a commitment that the 1947 Act will be reviewed. I have been told that we would agree to that. I commend the bill to the House.
Motion agreed to.
Bill read a second time and passed through remaining stages.