It's about time we had a cop on the beat in the Murray Darling Basin

By Terri Butler MP

03 June 2021

I rise to speak in relation to the Water Legislation Amendment (Inspector-General of Water Compliance and Other Measures) Bill 2021. In so doing, I also move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that the Coalition Government have bungled the implementation of the Murray-Darling Basin Plan and have all but abandoned its targets, leaving basin communities behind and risking our future water resources".

This is an important piece of legislation. Of course, as the minister said in his second reading speech, water is essential for the health and wellbeing of the basin's 2.2 million people and it's essential to support our national economy. The basin contributes $24 billion in agricultural earnings and $8 billion in tourism dollars in a normal, non-COVID, pre-COVID year. Water is of course also essential for the natural environment in the basin, including the 16 internationally significant wetlands and all of the endangered species that inhabit the basin.

Water is incredibly important to everybody who needs it to survive, but the water resources of the Murray-Darling Basin are important to all of the basin jurisdictions. That's why it is so important that people living and working in the Murry-Darling Basin and people across Australia can have confidence that water resources are being used properly and fairly. That's why this bill is so important, because report after report, study after study, has found that there is a growing lack of confidence and lack of trust amongst people living and working in the basin and amongst people who have an interest in the Murray-Darling Basin water resources.

This particular bill would amend the Water Act 2007 to effectively split the Murray-Darling Basin Authority to create a new agency with responsibility for the compliance function. That new agency would be headed by the new Inspector-General of Water Compliance, which is being established by this bill. This bill establishes that role, and that role will monitor and provide independent oversight of water compliance. The bill also proposes new offences and civil penalty provisions for unlawful conduct relating to contraventions of the Basin Plan; taking water when not permitted, as a basic provision, and there's an aggravated provision; and also water-trading issues akin to insider trading.

It's important to note that the government has sought to secure agreement on this new position and agency from the other basin jurisdictions. It's also important to note that, because conduct relating to taking water would also be the subject of the basin states' laws, this bill would actually require the new inspector-general to notify the appropriate agency of the state before taking certain compliance action, and, if a state says that they're dealing with the matter, provide them with an opportunity to do so before this new agency itself takes enforcement action. The intention is obviously for the Commonwealth to have the ability to take action but only after giving the basin state the opportunity to do so first, as the primary, frontline compliance body.

Compliance has been an issue of concern and has been considered in various reports and agreements, including the 2017 Murray-Darling Basin Water Compliance Review conducted by the Murray-Darling Basin Authority and an independent panel; and the Murray-Darling Basin Compliance Compact jointly agreed to by COAG in December 2018. But it's important to note, in particular, that the Productivity Commission has been sounding the alarm for some time about the problems that arise, the potential for conflict that arises, when the Murray-Darling Basin Authority has multiple different functions that, as I said, can come into conflict.

In its five-year review of the Basin Plan that was published in 2018, the Productivity Commission raised concerns that the conflicting roles that the Murray-Darling Basin Authority had, such as supporting the other jurisdictions to implement the plan, and plan evaluation and compliance, could create conflicts and lead to the Murray-Darling Basin—as the Productivity Commission described it—'marking its own homework'. The Productivity Commission, in that report, recommended that the Murray-Darling Basin Authority be split into two separate institutions: the Murry-Darling Basin agency and the Basin Plan regulator. That, as I said, was a recommendation that was published in the Productivity Commission's 2018 report. But it isn't until now, until today, 2021, that the government has actually taken steps to give effect to that recommendation—this step of splitting out the compliance function and creating a new agency, and it has been a long and winding road, frankly, to get to this point that we are now at.

In 2016, there was a Northern Basin Review, and that Northern Basin Review proposed that the water recovery target be reduced by 70 gigalitres per year in the northern basin, provided that the jurisdictions committed to what were described as Northern Basin Toolkit measures. After that review, there was a new role established, and that was called the Northern Basin Commissioner. That was a non-statutory role, and it was intended to be funded for three years, and that role arose from the Basin Plan commitments package in May 2018, which was a collection of commitments agreed between various jurisdictions, in respect of which we were also consulted. Former AFP commissioner Mick Keelty was appointed as that Northern Basin Commissioner in August 2018. So it was meant to be a three-year role, but only a year later, in August 2019, the Liberal-National government decided to scrap that role and create a new role, an Inspector-General for the Murray-Darling Basin. They said at the time—this was in August 2019—that that new role of inspector-general for the basin would have the powers needed to ensure integrity and delivery of the Basin Plan, that it would be a statutory position and that it would be able to refer issues to the Commonwealth Integrity Commission once it was established.

So in 2018 the Northern Basin Commissioner is created. In 2019 a Murray-Darling Basin inspector-general is announced. That new inspector-general is supposedly going to be a statutory role and is supposedly going to be able to refer matters to the new Commonwealth Integrity Commission. What happened was that Mr Keelty was appointed to the new position. His appointment was for a year, and that came and went without a statute being enacted, without a bill even being tabled, and obviously, as everyone in this place knows, without a Commonwealth integrity commission even being established, let alone his being given the capacity to refer to it. Then we had a period where there was no Murray-Darling Basin inspector-general whatsoever. So, there was a gap between Mr Keelty's appointment and his successor's appointment. But, at the same time, not only did his position come and go without being established as a statutory position, without being given any powers, without having a Commonwealth integrity commission to refer matters to, which were all breaches of the commitment made the year before by this government—yet another example of this government being all about the photo-op but never about the follow-up and all about the announcement but never about the delivery—they announced all of these things, they committed all of these things, Mr Keelty was in the position for a year, and his appointment came and went without any of those things ever actually happening.

Then there was a period of no inspector-general, and then, in September 2020, last September, the Commonwealth announced yet another new arrangement. They'd had the Northern Basin Commissioner and scrapped it. They'd had the Murray-Darling Basin inspector-general. They've now announced that they are scrapping that. They announced that there would be a new position which is Inspector-General of Water Compliance. They announced it in September. They announced the establishment of a statutory Inspector-General of Water Compliance position, and it was at that time, a bit more than a couple of years after the Productivity Commission had recommended it, that they finally announced that the compliance functions would be moved out of the Murray-Darling Basin Authority.

As I said, it has been a long and winding road to get to this bill. I'm pleased that we're now in a position where we are debating this proposed legislation, because this is something that should have been done years ago. The major difference, I should say, between that September 2020 announcement and the announcement that the government made more than a year before in August 2019, was that the announcement at the end of last year provided, as I said, not just for the creation of yet another new inspector-general but also for the splitting of those compliance functions from the Murray-Darling Basin Authority. So, after a couple of months of just no inspector-general whatsoever, no cop on the beat in the Murry-Darling Basin, even though the government had been talking about a cop on the beat for a very long time, the government finally appointed, in December 2020, the Hon. Troy Grant to the newly created role of Interim Inspector-General of Water Compliance for the Murray-Darling Basin.

So, we had the Northern Basin Commissioner, the interim inspector-general of the Murray-Darling Basin, no permanent inspector-general of the Murray-Darling Basin, then a gap, and now an Interim Inspector-General of Water Compliance. Hopefully, now that this bill is finally before the House, we will finally get a permanent, statutory, independent Inspector-General of Water Compliance and that person will be able to rely on actual powers, not just moral suasion, to do their job to restore confidence, to restore trust, to restore the sense that people are all playing by the rules and that everyone is playing by the same rules—that everyone is getting a fair go and that no-one's being taken for a mug. That's the importance of this really significant role. I'm looking forward to the inspector-general having the statutory basis, independence and budget that he needs in order to undertake this work. But the passage of this bill is not enough by itself to make that happen, because if you read the bill you can see that it doesn't commence until after the state jurisdictions, the basin jurisdictions, have all approved the referred provisions.

As I said, we had the 2016 review, we had the 2018 announcement of the position, we had the 2019 announcement of the new position, we had the interim inspector-general, we had the gap where there was no inspector-general, we've now got another interim inspector-general and we're now finally seeing this bill. But what we're not going to have is a statutory inspector-general until all of the basin jurisdictions have approved the amendments to the referred provisions. I just want to encourage our friends in other jurisdictions to make sure that they do move swiftly to undertake the necessary work to ensure that this legislation can commence as rapidly as possible. I wish the minister very great luck in securing those referrals, those approvals, so that this legislation can finally kick in and we can have the inspector-general empowered, independent and really doing the work that's necessary to restore that confidence in the basin.

It's important to note that this inspector-general would be appointed by the Governor-General and he would be conferred—and I say 'he', because we assume that it will continue to be Mr Grant, though I can be corrected if I am wrong—with the existing compliance functions and the powers of the Murray-Darling Basin Authority. He would also replace the existing non-statutory interim inspector-general role. The functions of the new statutory role would include monitoring and providing independent oversight of Commonwealth agencies in the performance of their functions and exercise of their powers under the act, the regulations, the Basin Plan and water resource plans; monitoring and overseeing basin state agencies in relation to their obligations in the management of basin water resources; monitoring the implementation of water restrictions of various agreements that are specified in the bill relating to the basin and the Basin Plan; community engagement; and exercising the proposed new enforcement provisions, which, as I said at the outset, include both civil penalty provisions and offences. These functions would be supported by new inquiry powers and the power to issue guidelines and standards. The power to undertake audits would be transferred from the Murray-Darling Basin Authority and the inspector-general.

It's also important to note that the Murray-Darling Basin Authority will obviously continue and that this new position, the inspector-general role, to ensure that it is able to undertake its work, will have a significant degree of independence, will be making its own decisions, as I'm advised, in respect of the work plan and will have budget allocations. It will also be able to appoint other people to assist in the performance of the roles and, where those people are not directly employed and subject to Australian Public Service obligations, they will be subject to a fit and proper person test.

I'm grateful to the minister for the collegiate way in which he has worked with us in respect of the establishment of this new role, and I also thank him for consulting with us as to the proposed provision of this legislation and listening to us with matters that we have raised. I also want to say to all Australians who have an interest in the Murray-Darling Basin, which is really all Australians, that we recognise the importance of the Murray-Darling Basin Plan and of making sure that we continue to insist that there be Commonwealth leadership in relation to this plan.

This plan is really one of the most crucial instruments of the Commonwealth because it does go to the management of those water resources—as I said at the outset, agricultural use, tourism use, environmental use and community use. It's also important to acknowledge the very significant cultural use of water by traditional owners. There are tens of Aboriginal nations in the Murray-Darling Basin to whom these water resources have a great spiritual and cultural significance as well as environmental and economic significance and, for that matter, their significance for the sustenance of human life.

It is important that as a nation we do better when it comes to the Murray-Darling Basin and the Murray-Darling Basin Plan. It has been, I think, really regrettable to see some of the delays and concerns about the implementation of the Murray-Darling Basin Plan. For example, there's a great deal of concern in our community about the environmental outcomes that are intended to be delivered, that would be equivalent to 605 gigalitres per year of water, and whether those outcomes will actually be delivered given the delays and failures of implementation in respect of the projects that are meant to give rise to those outcomes.

There is also, I think, a great deal of concern about the very significant underperformance in respect of the 450 gigalitres per year of additional water that's meant to be delivered through efficiency measures. This 450 gigalitres per year secured South Australia's participation in the Murray-Darling Basin Plan. Yet here we are, only a few years before the deadline for that 450 gigalitres, and we've had the Water for the Environment Special Account report last year saying that only 1.9 gigalitres of that 450 gigalitres has been delivered to date. That report said that the water is just not going to be delivered. In September last year, at the same time as the government announced the creation of this new inspector-general role and the splitting of the compliance functions from the Murray-Darling Basin Authority, they were also making clear that they—the government with responsibility for national leadership for the implementation of this plan—were almost fatalistic about their capacity to deliver that 450 gigalitres per year. The minister announced that there would a shift from all other forms of efficiency measures to exclusively looking to off-farm efficiency measures to deliver the 450 gigalitres. We've now seen, in recent days, the release of a report from the Australia Institute and the South Australian Conservation Council that says that, for those off-farm efficiency measures, so far the only proposals listed by the government are proposals for irrigation infrastructure in New South Wales, and a number of them—almost all of them—don't specify the amount of water that would be recovered through those proposed irrigation infrastructure measures.

The government is really running out of time to explain to the Australian people how they're going to deliver that 450 gigalitres of water per year. If it's not delivered, that's a significant problem. As I said, it was that 450 gigalitres that really secured South Australia's participation in the plan. I think South Australians would be entitled to be deeply concerned about the future not just of the basin more broadly but of, for example, Ramsar listed wetlands in South Australia if that water is not delivered, if that commitment is not met. I think South Australians would also be looking to their own government and asking questions about whether their own government has done enough to secure that additional 450 gigalitres.

We know that as a nation we have to protect this crucial water resource for all of those reasons that we have talked about—the agricultural benefit; the tourism benefit; the sustenance of farmers, farming communities, local communities; the cultural use of water; and the environmental use of water. The government really needs to explain to the Australian people how they're going to make sure that the spirit of the plan and the letter of the plan are met and delivered. They need to explain to the Australian people how we're going to, in the face of declining inflows—that was the finding from the previous interim inspector-general when he did his report—in the face of climate change, in the face of growing demands on the water resources that we have, make sure that those water resources are managed as well as possible and that they're managed in a way that maximises the best possible use of the water, not in a narrow sense but in the sense of all of those different uses of water that I've talked about.

This bill excludes the ACCC from its purview, but it is worth noting that the ACCC has been doing some complementary work that would assist with the restoration of confidence in the basin, and that is to look at water market rules within the basin. I really want to encourage the government to step up its game in considering the recommendations from that ACCC report. They've done an excellent piece of work in looking at all of the different issues in water markets, whether it's information asymmetry, whether it's the lack of real oversight and the lack of things like market surveillance, whether it's the special nature of water markets because of the physical nature of the water and things like the loss that you have from the conveyance of water when water rights are traded. There are a range of issues that have been considered through that ACCC report. I know the government have set up a committee to consider the report. The report was produced by the ACCC, the expert competition regulator. Setting up the committee is one thing, but actually implementing the tough changes that need to be implemented arising from the recommendations that have been received is quite another. So I encourage the government to really step up and take action to make sure that the water markets are as fair as they can be and function as well as they can because these things go to trust, to confidence and, frankly, to water security and ensuring that the water is going to its best possible uses in the Murray-Darling Basin.

I should also mention that Australians are looking to the government for leadership as to the future of the plan. Certainly, as I said, there's a range of concerns from people about the role of climate change and the effect that that is having on the amount of water that is available in the basin. I've had concerns flagged with me about how well or otherwise the issue of floodplain harvesting is being considered within the plan. These matters are all about making sure that the government continues to take a science informed approach to adapting to changes that occur over time, and making sure that it shows that national leadership when it comes to managing this incredibly precious natural resource that we have that sustains our environment, our lives, our agriculture, our tourism, our cultural life, our spiritual life, all of the different uses that this water is put to across many different communities and by many different peoples and, as I said, by many different Aboriginal nations as well.

This is an important bill. It's a bill that needs to be passed. It is also important that the approval of the other basin jurisdictions be secured as rapidly as possible, so that this bill can actually commence operating. It has been a bit of a winding road to get here, but we're here now. Let's see the new Murray-Darling Basin Inspector-General of Water Compliance empowered, independent and able to actually undertake that work to help to restore some of that confidence and that trust in and amongst basin communities. It's absolutely fundamental, and I ask that the government take every step that it can to continue to improve the circumstances for the people who rely on the water resources and the environment that relies on the water resources in the Murray-Darling Basin. Thank you.