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Good morning.
I would like to start by acknowledging the traditional owners of the land on which we meet today, the Ngunnawal people and pay my respects to their elders past and present. I also acknowledge and pay respect to the Traditional Owners, and the Nations, of the Murray–Darling Basin. There are more than 40 Aboriginal Nations that comprise the Murray–Darling Basin. They all have a deep cultural, social, environmental, spiritual and economic connection to their lands and waters.
Can I also add my thanks to those of Neil [Andrew] for all of you who have been involved in our consultation — I apologise for that up front — and the research that has been done as well. Can I also thank you for giving us your time this morning, to mark what is really quite a significant step in the evolution of the Murray–Darling Basin Plan.
The Plan has a really clear intent. It's simply to safeguard one of Australia's greatest national assets — one of the great icons – so that future generations can enjoy life in the basin, they can work in the basin, they can play in the basin, it will be there forever.
The basin is home to more than two million people. Its water is used by almost four million people — and it produces enough food to feed the nation and beyond.
Forty per cent of all of Australian farms are located in the basin. Twenty billion dollars worth of agricultural production comes out of the basin on average every year. And 50 per cent of irrigated agriculture comes from the Murray–Darling Basin.
It's also a complex ecosystem — stretching for one million square kilometres, it occupies 14 per cent of the Australian continent, it's got subtropical, temperate as well as semi-arid zones. It's home to 23 river catchments including Australia's longest rivers, 16 internationally significant wetlands and it provides essential habitat to 35 endangered bird species, 16 endangered mammal species, and 46 species of native fish. It's also home to more than 40 Aboriginal Nations.
We knock ourselves a lot about our Murray–Darling Basin Plan and management of the Murray–Darling Basin, but by international standards it's very well managed.
Australians can and should be proud of the foresight and the political will that has gone into agreeing the Plan and the operating rules that ultimately will benefit all river users.
Each year the Murray–Darling Basin Authority and the department get lots of visitors from overseas, trying to figure out how it is that we've got to this space. They really look in awe at where we've got to.
Like any good Australians, we like to fight over things. Someone once told me, that whisky is for drinking and water is for fighting, and that is what we've been doing a fair bit of in recent times. But we do have a path to sustainable future for the basin. It's a hard path to follow and I'll get into that in a little bit more detail later on.
When the Plan was drafted in 2012, and despite the well managed internationally recognised regime that we have, the system was under serious and damaging strain. Before this period, water use in the basin had increased four-fold in a 50 year period. Regulation of flows had all but put a stop to the beneficial peaks and troughs that underpin so much of Australia's riverine environment. Salinity levels had gone up and algal blooms threatened water quality for all water users. In summary, and it's easy to say this with the benefit of hindsight, governments had collectively over-allocated this resource.
The future of the industries, and communities that depend on those industries, was uncertain because the very resource base on which they depended was not seen as sustainable.
In 2007 — which is the year in which the lowest inflows to the Murray–Darling Basin were recorded — irrigators faced the real prospect of zero water allocations for the following year.
The millennium drought was a wake-up call. We needed a plan —a plan to better share the basin's water from top to bottom.
And that was what was achieved in 2012. The Plan received bipartisan support from all basin states and the from the Commonwealth parliament.
Back then, it was clearly recognised there would be some significant short-term impacts, particularly on the communities that depend on irrigated agriculture, because in its simplest form the Plan is about reducing the volume of water that's available for consumption. The reason for doing that is to try and provide a long-term future. Around 20 per cent of the water that was previously being used is being returned to the environment. That's a figure of 2750 gigalitres (GL). It was recognised at the time that there would be significant pain involved in that. But it was done in the knowledge that there was a long-term gain.
Unfortunately, Murray–Darling Basin communities have been living with this pain for quite some time. It's not that evident to metropolitan media and others, that this has been a long process. So far, 72 per cent of that water has been recovered. And that doesn't come without a cost.
To help people with the transition from one state to another, the Australian Government made $13 billion available to improve irrigation infrastructure to recover water. And it was in recognition of the adjustment that irrigators were clearly going to have to go through, as were the industries that depend on agriculture and irrigated industries – in the towns that depend on those industries. It's all about trying to achieve a better future.
Of the $13 billion, more than $8 billion has been targeted to improve on and off-farm water infrastructure. Trying to improve the efficiency and effectiveness of how the water is used, so that production continues, and the water returned to the environment at the same time.
Critically, the Basin Plan was developed on the best information that we had at the time. It wasn't perfect, but it was the best. A lot of work went into coming up with the settings, a lot of analysis. And the Plan is legislated. It doesn't mean however that it is set in stone.
What we're here today to do is realise - to actually mark that opportunity for a change.
Governments recognised that our understanding would indeed change over time. And that's why regular reviews are hardwired into the plan, allowing us to update it and refocus it when it's needed.
In order to do that though, because it is legislated, we need to make amendments to it. And what we're releasing today is a series of proposed amendments that will go through a public consultation process, before being presented to the Deputy Prime Minister to introduce into this place [parliament].
There are three amendments we've got in place that we're announcing today.
The first is in relation to the northern basin. The second is in relation to groundwater, and the third is in relation to some minor technical amendments to improve the plan.
I wanted to focus most of the talk today on the northern basin because that's where most of the action has been.
Northern basin
The northern basin for those of you who aren't familiar with it, is the bit above Menindee Lakes. It covers pretty much the top half of New South Wales to the Great Dividing Range, and a fair chunk of southern Queensland.
The northern part of the basin contributes to the 2750 GL to be returned to the environment. In fact the number legislated in the plan is 390 GL. It represents 14 per cent of the total contribution that has to be made back to the environment.
At the time at which the Basin Plan was constructed, it was recognised that the level of information that we had on the north was nowhere near the level of information we had for the south. We've used the rivers in the south for a much longer period, there's been more study of these. So at the time it was recognised that we needed to do a review and the Murray–Darling Basin Authority was sent away and over the last three and a bit years, we've tried to improve the level of knowledge we had.
We've done ground breaking research on the economic side, the environmental side and the social side. For the first time in this country, we have quite detailed community level information in relation to 21 communities where we can plot and map what the impact of water returned to the environment actually has been in those towns.
In relation to the environmental work, we've got a thousand kilometres of the Darling that have been GPS mapped for where the snags are located, so we know exactly what levels of water provide what sort of environmental outcomes. And we've had, with the assistance of the Northern Basin Aboriginal Nations, we've done some really good work as they explained and got us to understand the values that Aboriginal people put on water.
We've consulted widely with communities and experts, to see if 390 GL is actually that right balance between economic, environmental and social demands on the system. To ensure that is it the right balance — to make sure that we've got a resource base that is capable of surviving into the future.
After considering all of that new information and lots more, it is the Authority's view that the 390 GL amount is not the best balance between river users and the environment. So we're proposing an amendment to the Plan to reduce the water recovery target by 70 GL to 320 GL. Provided — and it's an important proviso — that relevant governments Commonwealth, NSW and QLD — are able to make a commitment to implement a range of complementary measures that will actually improve water management in the north.
This is a decision steeped in multiple lines of evidence. The information we have now shows we can achieve almost the same environmental gains using 320 GL of water as we envisaged with 390 GL of water. This depends on using that water in a smarter and more effective way than we're currently doing.
So what does that difference make? It doesn't sound like very much, 70 GL, but it's a lot. As I mentioned earlier our social and economic research separated the effects of water recovery from other things that are happening in the communities within the northern basin. Technological change that reduces the employment in the cotton industry, changes in commodity prices, seasonal factors, all contribute to making it pretty hard to earn a quid in agriculture. But for the first time we've been able to separate out what has been the impact of various levels of water recovery on those communities.
We can say with confidence that the decision to reduce the amount of water returned to the environment means that about 200 fewer jobs will be lost in irrigation dependent communities across the northern basin.
That's around 66 fewer jobs lost in Moree, 23 fewer jobs lost in Warren — and 15 fewer jobs lost in Dirranbandi.
Now these might not be big numbers by city standards — but in a community of 700 people, 15 more secure jobs is extremely welcome news.
The 320 GL target is actually quite close, it's within grasp. Depending on series of decisions that the NSW Government might make, there may be as little as 11 GL needed to get to 320 GL by 2019.
There's no easy wins in water. The decision to recommend a 320 GL cap means there will be small decreases in environmental outcomes. We did a fair bit of work with a panel of independent scientists about how much water is actually needed so that we can be confident that the health of the basin is maintained. We particularly looked at the environmental water requirements for the Condamine-Balonne system and the Barwon-Darling system. We have developed 43 environmental indictors — indicators of flow — that confirm, some were confirmed from the previous work we'd done in the lead up to the Basin Plan in 2012, we also added some new ones.
Those 43 indicators — the markers we use to estimate what is a healthy river system — we modelled umpteen different levels of water recovery, from the current level of water recovery, which is about 278 GL right through in one extreme case to 500 GL.
What would be the economic, environmental and social consequences of different levels of water recovery? At the 390 GL level we hit 21 of the 43 environmental indicators. We make improvements in the others but we don't quite achieve them all.
One of the scenarios we modelled and consulted on was 415 GL and that gives you an extra three environmental indicators. You get 24 indicators at 415 GL. At 320 GL, which is our recommendation, we can hit 22 of these environmental indicators, it's a slight improvement in the gross number of indictors, but the devil is in the detail because some of the progress towards some of the other indicators we weren't able to achieve did go backwards. So what we're saying is we're not getting exactly the same environmental outcome but it is pretty close.
That's the balance that we're trying to get with this decision: about 200 fewer job losses for communities, and environmental outcomes which are close to those that are achievable under the current settings in the Plan.
This might surprise those people who think that the Basin Plan is a purely environmental document, or indeed that the MDBA is only interested in the environment. I've been surprised in going around and talking to communities, how many people just assume we only have one objective which is to achieve environmental outcomes to improve the environment of the basin. Nothing could be further from the truth. Under our Act, we're obliged to look at — the jargon is the triple bottom line framework — but to look at the environmental, social and economic consequences at the same time and try and find the right way through.
The goal of the Basin Plan has never been to return the basin to a pristine state. The goal of the Basin Plan isn't to maximise agricultural production. The goal is to ensure we've got a healthy and productive basin into the future.
While our overall decision for the whole of the northern basin demonstrates a balance, it's really important to understand that the devil is in the detail and the outcome varies enormously across the valleys.
Eight of the 12 northern valleys are likely to have no more water to recover under our proposal. And in fact, the Macquarie-Castlereagh and Gwydir are actually over recovered as a result of this new work. The government now holds more water than it needs for those particular catchments, which is something that environmental water holders will need to work through.
Ten of the 12 northern valleys have reduced water recovery targets. Of the four valleys I mentioned that do need further recovery, the Condamine-Balonne has the biggest task. Under our settings of 320 GL, it still has to recover 35 GL of the 100 GL target that is needed. That's a lot of gigalitres, that is a lot of jobs. Whilst it is a reduction from what the current setting in the plan is, which would see 77 GL still to be recovered, it's a halving of that, it is still a significant task.
Why is that? The reason we've gone there is that the Condamine-Balonne has seen absolutely exponential growth in water entitlements over a 10 year period. It's the most over allocated valley in the basin. We need to rebalance that and we acknowledge that in that rebalancing, even though it's a reduced task, that's going to have a very significant impact on Dirranbandi and on St George.
The other three valleys where there is recovery, the Namoi needs a further recovery of 7 GL, which again is a reduced target, the NSW Border Rivers need a further 4 GL, which is a reduced target, and Queensland Border rivers needs 14 GL, which is an increased target.
Now if you're starting to try and add any of those numbers like me you'll see they actually add up to more than the 11 GL that I said we still need from the north. That's because of this problem with over recovery and so some of that over recovery might be returned to the consumptive pool, which would leave net recovery of around 11 GL.
Another important thing we've learnt, and it's probably obvious to all, is that where water is recovered is critical to determining the environmental benefits that we get. We've chosen to adopt a much more targeted approach to minimise the economic impacts; to be able to get the environmental gains we need at minimum cost. That reduces the freedom that state governments have for moving water around between valleys. And it's one of the reasons that some catchments still have these significant water recovery targets.
So we've had to be targeted and we have had to be specific about where the water comes from.
The other key element in all of this as I mentioned right at the start is that we are recommending an approach that goes beyond water recovery. Water alone is not enough for a healthy working basin, particularly in the north which is relatively unregulated compared to the southern basin. Having the water there is great, but it's not enough on its own.
So with the feedback that we've got, and I'd have to say that it has been strong in the last 10 months I've been here, but I've been told over the last four years that the Northern Basin Advisory Committee, that Mal Peters chairs, have been yelling at us for ages to realise that it is not just about water — there are other things we need to do. There are tools we should be using to make sure we get the right outcomes. So we need basin governments to complement the work that we're doing by increasing the use of things that are in their control. All we [the MDBA] can do is talk about what we believe is the right volume of water that should be returned to the environment. But how that water is used, will be the critical determinant of getting environmental outcomes while minimising social impacts.
So for example, use of things like infrastructure such as fishways, which enable fish to migrate up and down the river when they come to a barrier, is pretty important. We also need the states to use their regulatory frameworks to better protect water returned to the environment. There's not much point in extracting water from one valley from an irrigator, from production, damaging those communities, to return it to the environment and in another valley have that water pumped out by an irrigator.
It's really important that we make sure that we get the maximum value out of the water that is returned to the environment. We need more imaginative use of environmental water.
We're also recommending maximising water recovery through improved irrigation infrastructure wherever possible, not through the purchase of water. Our economic analysis certainly can demonstrate those impacts.
We know that investing in irrigation infrastructure is a direct investment in communities and it leads to benefits that stay within the community, as Minister Joyce said earlier today.
Our Northern Basin Advisory Committee has called these complementary measures a toolkit, which makes sense. We've got the water and we need to use this toolkit to make sure it is used properly. And I really do want to thank the Committee for continuing to persist with highlighting that it isn't just about water.
If governments can get on board with these complementary measures our confidence in achieving the environmental, economic and social objectives of the Plan is greatly increased.
But we have to recognise that there will be a significant level of economic and community pain to come, particularly in the four valleys that I mentioned earlier on.
There's also going to be a fair amount of disappointment for many of the advocacy groups and representative groups that we've worked with very closely over the last four years.
There are many groups that wanted a higher recovery target and there are many groups that wanted a lower one.
The Aboriginal Nations — Fred Hooper and the members of NBAN — worked with us to really deepen our understanding of the values that Aboriginal people place on water. They also asked for more water to be returned to the environment. They wanted us to at least stay at 390 GL, if not go beyond. As did the floodplain graziers.
The environmental groups of course want much more water to be recovered than the 390 GL. The ecosystem of the MDB has suffered for too long in their view.
The irrigation industry ran a campaign — is still running a campaign — that there should be no further water recovery. Enough is enough would be the way they put it.
However, I believe, as Neil [Andrew] has already said, that based on the evidence we've got, the new research, the best possible information we could pull together, the views of the communities that we've worked with, we believe this new balance is the right balance.
I reckon that the amendment means that all Australians can have confidence the northern basin will continue to sustain its communities, its industry and the environment on which they all depend, well and truly into the future and I certainly recommend it to you all.
Groundwater
The second area of amendment is in relation to groundwater. It won't take as long to go through as I have with the northern basin but it's about changing the volume of groundwater that can be extracted at three aquifers within the basin.
For the very first time, the Murray–Darling Basin Plan placed limits on the amount of groundwater that can be extracted from the basin, in 2012. That was crucial to making sure that we did indeed get the health of the system right.
As part of finalising the Basin Plan in 2012 governments agreed to review the settings in three aquifers — two in NSW, one in Victoria — and these reviews have been completed.
Again, this is about finding the right balance and in this case the amendment has recognised — sorry the amendment is recommending — we increase the amount of groundwater that is extracted from those aquifers. It's a 5 per cent increase, 160 GL in fact, which takes the overall basin-wide total for groundwater take to 3494 GL to be precise.
Our recommendation is on the condition that management controls are introduced— and that's something again that we'll work with the state governments on. And in addition, a number of the states have changed the boundaries that they've used to describe those groundwater aquifers and we're putting in place an amendment to make sure that the Basin Plan is consistent with those new lines on the map.
Technical amendments
The third area is technical amendments where we are recommending some minor changes to the Basin Plan to make sure it operates more smoothly than it currently does.
These changes include clarifying water trading rules. Some of the rules don't quite operate in the way in which they were intended, and so we're taking the opportunity after some advice from the Australian Competition and Consumer Commission to clarify some definitions without changing the overall effect.
Conclusion
So today marks the commencement of the public comment process for these amendments.
One of the great strengths of the Basin Plan is that it is legislated, it is set in stone, it provides certainty to everybody. One of the great weaknesses of course is that in order to change it we need to have changes get through Commonwealth parliament. So, there is a statutory process where we seek submissions from today until 5 PM [AEST] on the 10th of February. We consider those submissions, and we might make some changes as a result of the new information we might receive. We then consult with Ministerial Council — the state ministers — with relation to the Murray–Darling Basin and we might make further changes. We then provide those amendments to Minister Joyce and it's his task to either agree with those amendments and introduce them into the parliament or make a different decision.
In order to facilitate that public submission process, we'll be holding meetings in 12 regional centres, in November and December, mainly in the north, to try to explain the changes, to answer questions, to try and explain why it is that we've come to the landing that we have. We'll also be holding some meetings in the south, particularly around groundwater, but there are clearly some linkages between what is done in the north and what is done in the south.
Without an amendment to the Plan the 390 GL recovery target remains in place. So, from my perspective, we believe we've come to the better landing, we'll need strong support for these amendments so that the amendments can progress through the parliament. The quicker they get through, the quicker the changes are made to the Plan and the quicker the communities can have certainty.
Again one of the great strengths of the Basin Plan is that it allowed seven years to make this huge adjustment, to make this major reform. That is a long period, it gives time to people to adjust, but it's also a long period of uncertainty and one of the critical things we're trying to get out of the plan is a more certain future for everybody.
The amendments that we've proposed today are aimed at safeguarding the future for the whole of the Murray–Darling Basin. We're trying to take into account those absolutely competing demands from communities, industries and the environment.
Reducing the water recovery target in the north from by 70 GL is in my opinion a much better-balanced outcome.
It delivers for communities, it delivers for the environment and it delivers economically.
It is what the Basin Plan is all about — securing a healthy and productive system for future generations. I commend it to you and again I thank your time here this morning.
Thank you