Speech to the Murray Darling Association

By Terri Butler

15 September 2020

There are so many interests in the million square kilometres making up the Basin. The river system is called upon to provide water for human need, agriculture, cultural purposes, spiritual purposes, tourism, recreation, community life.  The Basin is home to over 30,000 wetlands, 100 of which are recognised as nationally important due to environmental, heritage or cultural significance. It makes up about 41 per cent of the total gross value of Australia’s agricultural production. 2.1 million people living in the Basin, and another 1.3 million people living outside it, rely on the Basin for drinking water.

Thank you, Dominique. I acknowledge the traditional owners – from more than forty First Nations – of the lands and rivers throughout the Murray Darling Basin. I pay my respects to elders past and present. Thank you to Cr David Thurley OAM, National President of the Murray Darling Association and Albury City Councillor, and to CEO Ms Emma Bradbury, for inviting me to address this conference. I acknowledge Mayor Seema Abdullah, Mayor of City of Greater Shepparton, the hosting council. Were it not for covid, I would be with you in Greater Shepparton today. I acknowledge all my parliamentary and local government colleagues who are present, and I acknowledge, too, the many community leaders who are online.

In their absence I acknowledge the many different authors of the various recent and useful reports and inquiries in relation to the Basin, some of which I will mention in these remarks. In his absence I also acknowledge the new Chair of the Murray Darling Basin Authority, Sir Angus Houston, and wish him, the CEO Phillip Glyde, and all those working in the Authority well in the months and years to come. I express the same good wishes to the Commonwealth Environmental Water Holder and to all who work in the service of the public more broadly in relation to the Basin.

Today I want to talk about Labor’s approach to Basin issues, and the importance of instilling trust, confidence and respect into Basin management and governance. Before I do, I wanted to acknowledge the work of the Association.

You have faced the challenges of 2020 – Summer’s drought, fires, and in some areas floods, policy and political uncertainty, and now the global pandemic and the recession. And you have also kept the organisation firmly focussed on the challenges ahead. Congratulations on being able to convene this important conference with its broad agenda and high-quality speakers.

Congratulations, too, on the work you have done to date to prepare your next Strategic Plan, and on the work you have done to ensure that the communities you represent have been heard in all of the many consultation processes and public discussions about the future of the Basin.

Now, let me make some brief remarks about the Plan.

On the day he signed the Plan into law in 2012, the then Water Minister the Hon Tony Burke MP told the nation that the Plan had been overdue “ever since it was failed to be properly addressed in the Federation debates in the late 19th century.”  Throughout the decades since, there have been many challenges and a fair amount of conflict in the Basin. Meeting the challenges and resolving the conflict requires leadership, and leadership requires trust, confidence, and respect.

In an address on Friday the Water Minister the Hon Keith Pitt MP said that “the speech made on 25 January 2007 by former Prime Minister John Howard … was actually the catalyst for the Murray Darling Basin Plan.” But I would argue that the catalyst for the Plan was the original COAG Agreement on water reform, brokered by the Keating government in 1994. It was remarkably forward-looking to include water reform in the economic reforms of the time, and the Keating government had a lucid understanding of the Basin as a common property resource susceptible to all the problems of over-use that such resources face.

The reform principles determined in 1994 laid the foundation for the National Water Initiative in 2004, the 2007 water legislation, and the Plan itself.

As then ACCC Commissioner Ed Willett said in 2009, “By world standards of the day, and perhaps even today, the COAG framework represented ground breaking recognition of economic and market principles in water policy."

And those Keating-era reform principles followed not too long after an event that Tony Burke described, much later in 2012, as “the game changer”:  the 1991 blue-green algae outbreak. As Tony said when he signed the Plan into law:

“The environment turned up to the negotiating table in 1991 and said, ‘if you're going to manage the river this way then none of you can have the water.’”

He described the Basin as “the largest environmental asset on the continent and our most important production asset.” And he said the then government intended to deliver reform that restored the rivers to health, and ensured strong regional communities and a vibrant irrigation industry.

There are so many interests in the million square kilometres making up the Basin. The river system is called upon to provide water for human need, agriculture, cultural purposes, spiritual purposes, tourism, recreation, community life.  The Basin is home to over 30,000 wetlands, 100 of which are recognised as nationally important due to environmental, heritage or cultural significance. It makes up about 41 per cent of the total gross value of Australia’s agricultural production. 2.1 million people living in the Basin, and another 1.3 million people living outside it, rely on the Basin for drinking water.

The multiple and different interests are not necessarily constrained by state borders or electoral boundaries. Which is why it is very clear that, despite all the potential for conflict and challenge, co-operation is crucial.

Now more than ever the people of Australia want collaboration and bipartisanship. That is reflected in Labor’s approach to the Murray Darling Basin. We seek to maintain good, open communication with the Minister. I get along well with the Minister, perhaps partly because we are both from regional Queensland. My electorate is in Brisbane but I grew up in Cairns and lived in Townsville before moving South twenty years ago, and I still spend time up north with family.

But a good working relationship and an intention to be bipartisan where possible does not absolve me, as the shadow minister, of my responsibility to hold the government to account, or to offer constructive criticism where it is warranted. 

So let me offer some now.

You and your communities deserve to be able to trust that water is being managed well in the Murray Darling Basin. And you deserve to be able to have confidence in the decisions that are made, and to be respected. That respect can be expressed well through words but it is best demonstrated through inclusion. Not just consultation, but through being given the respect and the space to take the lead in decision-making.

The Minister’s announcements on Friday, to the extent they recognise that local communities are best-placed to know what is needed, are welcome. This fits very well with your theme this year of Local Leadership: A National Priority. I want to see the money delivered quickly and fairly, whether it’s for the new Indigenous rangers, the community grants, or information gathering. The commitment to the single point of truth is important and consistent with recommendations made in past reports but again the proof of the pudding will be in the tasting. Specifically, we will have to wait and see what cooperation the government can get from the states, because without their willing involvement it is difficult to see what information the new platform will provide that is additional to the information already available from the MDBA’s website. The announcement of a new National Partnership implies there will be more emphasis on carrots than sticks, to secure cooperation. We will have to wait to see how that plays out.

Increasing transparency is an important aspect of any moves to fix the erosion of trust. The broader question of the loss of trust and confidence is an issue that is particularly worrying, and it is an issue that has featured in multiple reports and submissions about the Basin.

On Friday the Minister released the final report from the Independent Panel for the Assessment of Social and Economic Conditions in the Murray– Darling Basin, led by Robbie Sefton.  She and her panel said

“We found many people have diminished trust in federal and state governments to deliver good long term policy and support rural and regional Basin communities. … People in Basin communities repeatedly said they had lost trust because they feel over-consulted and under-listened to. We heard strong messages that successive governments have hollowed out their local and regional capability and knowledge and have not provided clear leadership or a compelling vision.”  

They made a series of recommendations, commencing with recommendations about how to “improve the way we work together.” They started that section by saying:

“Governments and Basin communities need to work together to rebuild trust, and communities need to be put at the centre of conversations about their future.”

The Productivity Commission’s 2018 five-year review of the plan spoke of a “legacy of community distrust” and warned that if the implementation of the Plan didn’t improve, community trust and confidence would be reduced further, particularly if there was a perception that money was being wasted as governments were unaware of issues or unwilling to confront them.

Infrastructure Australia has acknowledged the effect that the Menindee Fish Kill and other events have undermined confidence in the governance and management of water.

Perhaps the most blunt assessment came from Mick Keelty AO, the Interim Inspector General. In his report earlier this year he talked about the need for leadership, saying:

“In the absence of strong, basin-wide leadership, there is a perception that some parties are too busy ‘playing politics’ and are ineffectual at making any tough decisions—especially when it comes to making decisions in the national interest and at the ‘whole of Basin’ level.

A more unified Basin-wide position and plan of action for Basin Plan implementation is required across all levels of government to improve leadership in the Basin and address the current crisis in confidence. Coordinated and strategic leadership will help by providing more certainty about water reform in the long-term, which will be beneficial for everyone in the Basin.”

And in addition to these issues, stakeholders have raised with me perceptions of corruption. These fears are stoked by the knowledge that there is a long-running ICAC investigation on foot.

We need serious measures to restore trust and confidence. None of this is news to the government. And one of the most important measures that can be taken is to establish strong compliance and assurance measures.

Back in its 2018 report, the Productivity Commission acknowledged that the MDBA had conflicting roles, and that those conflicts would intensify in the following five years. It recommended that the MDBA should be split into two, to separate policy and compliance. More than six months passed, and finally the government announced, not the split that had been recommended, but the establishment of an Inspector-General.

The position would be interim at first but would be constituted by statute and given enforcement powers. It would be able to investigate issues and refer matters to other agencies including the Commonwealth Integrity Commission. It had the backing of the Ministerial Council and then COAG. So we were told in August 2019.

More than a year has passed since the Inspector General was announced. We’re heading towards the second anniversary of the Productivity Commission’s recommendation to create a separate compliance body. Soon, Mick Keelty’s 12 month appointment will finish. The position is not statutory – it is reportedly operating pursuant to a letter – and we have not seen any bill to establish the position. Needless to say, in the absence of a statutory basis it has no enforcement powers. And there is no National Integrity Commission to which it can refer. Australians were promised a “cop” but to date we remain copless.

And now, on Friday, the government has made yet more announcements.

It is a good thing that the government is finally moving to adopt the Productivity Commission’s recommendations. Labor went to the 2019 election promising to separate out the compliance function from the MDBA, and it is a good thing that the government is now seeing the value in doing so. It also appears to make sense to merge the Inspector-General role with the new compliance arm, rather than having a multiplicity of bodies. But as the Daily Telegraph reported yesterday, the government only plans to establish the role by September 2021 – almost three years after the Productivity Commission recommendation was made.

One of Labor’s criticisms of this government has been that they are big on announcements, but poor on delivery. Or, as Anthony Albanese says, they are there for the photo-op but not for the follow up.

The failure to deliver on the Inspector General is an example of this. Another example is the National Water Grid Authority.  The creation of this body as a statutory authority was a key plank of the government’s 2019 election commitments. In July 2019 the Deputy Prime Minister said it would be in place by the end of that year. In September he said it would commence on 1 October that year.

But in October last year the then Deputy Secretary of the responsible Department, Dr Rachel Bacon, told Estimates that “it’s not actually an independent authority.” It’s now September 2020 and there is no such independent statutory authority, just a group within the department. This is a broken promise, and it’s another announcement not matched by delivery.

While I’m on the topic of the “Authority”, I wanted to say something about yesterday’s announcement that the government is going to establish an advisory committee for the National Water Grid, to provide independent expert advice to the Government on water infrastructure policies, projects and investment priorities. This announcement is being made six years after the government declared “mission accomplished” on water management and abolished the National Water Commission. So I’m pleased the new advisory committee has been announced, but this government has a long way to go to make up for its neglect of water policy and water reform over many years. And they know they need to do more. Almost eighteen months ago the Drought Coordinator-General told them they needed to undertake a systematic and prioritised assessment of Australia’s water resources. More than six months ago Infrastructure Australia listed a National Water Strategy as a High Priority Initiative on its priority list. Announcing the creation of a committee to advise on infrastructure falls well short of these imperatives. 

But as I was saying, we have been concerned about this government’s gap between announcement and delivery. Probably one of the most notorious examples relates to water infrastructure. Before they were elected they claimed they would build 100 dams. They have built one in seven years  – the Camden Rivulet dam, in Tasmania, which had initially been planned under Labor.

Given the government’s record, I think we can be forgiven for being a bit skeptical when big announcements get made. But having said that, I want to make clear that I hope the government succeeds. Labor will carefully consider the proposal to separate the compliance function from the MDBA and merge it with the renamed “Inspector General of Water Compliance”. We will scrutinise any outcome of the Commonwealth’s discussions with the states in relation to the new model. We will also properly consider any proposed legislation, if and when it has been drafted. I will say that it is crucial that the government ensures the new agency is beyond reproach and upholds high ethical standards. The agency must also be accountable to the community, not just to the government. We will want to be assured that the new compliance body will work closely with you and your members. Those of you in local government know better than anyone that yours is the sphere of government best able to build trust.

Another crucial plank in any attempt to increase trust and confidence must be addressing the water trading rules in the Basin. The ACCC inquiry was due to provide its final report by the end of November. That has now been pushed out to the end of February. The Interim report was a high quality and useful document. It observed several problems with water trading including the lack of regulation for brokers and intermediaries, the absence of market surveillance, pronounced information asymmetry, inconsistencies between the states, the disconnect between the rules of the trading system and the physical characteristics of the river system, and governance failures. The report says that these problems have the effect of eroding trust in the markets and the institutions. People do not trust that they operate fairly. This is a familiar concern and as I have already said the erosion of trust has been discussed in many different inquiries. I would encourage the government to make sure that market participants and other affected parties have ongoing input into market design, as that will increase trust, create buy-in, and engender a willingness to play by the rules. The significance of the market rules should not be underestimated. They need to be got right, especially given the increasing scarcity of water. I look forward to seeing the final report once it has been provided next year.

As you all know the Wentworth Group of Concerned Scientists recently published a report on observed versus expected flows, which showed that two trillion litres, or 20%, of water was missing over the past seven years. They found that 24 of 27 sites received less water than expected when modelled in 2012, even accounting for the drought conditions, and three sites received less than half of what was expected. They said that reasons for the lost water might include climate change, water theft, floodplains being interrupted, or on-farm efficiency measures reducing the amount of water returning to the system. Having regard to that report it is clear that the government must improve its monitoring and data collection, make sure its proposed new compliance and assurance body is robust, and devote significant attention to the implementation of the Plan.

This leads us to the other measures the Minister announced on Friday, and to questions about how well the Plan is being implemented under this government’s watch.

On Friday Minister Pitt reminded Australians that across 125 years’ worth of records more than half of the driest years have happened in the past 20. It is self-evidently true that climate change is affecting the amount of water in the river system. This should not be news to anyone. There are also other issues affecting, or potentially affecting, water availability, which I have just mentioned.

The Minister also talked about the progress, such as it is, in relation to efficiency measures to recover the additional 450 GL by 2024, consistent with the Basin Plan legal requirement to achieve neutral or improved socio-economic outcomes.

Back in January 2018 the Basin governments received a report from EY that said it would be difficult but possible to deliver the 450 GL. They offered advice as to the program design. In late 2018 the Productivity Commission sounded the alarm about the need to have a clearly articulated overarching water recovery strategy for the 450 GL. Now, almost two years later, the Water for the Environment Special Account Review has said that the 450 gigalitres would not be recovered by 30 June 2024. The report said that as at February 2020 only 1.9 GL, or less than 1% of the required volume, had been recovered.

The government has done little to explain this state of affairs. I look forward to hearing from them how they intend to make sure both the letter and the spirit of the Plan are to be fulfilled. And I also look forward to seeing the government implement their recent commitments of $38 million for downstream river health projects.  On Friday the Minister said that 150 GL in water savings could be achieved through a pivot to off-farm projects. We will be watching closely to see how the government tracks against that commitment, of which they said 70 GL in water savings is to be delivered “quickly”.

The Minister also talked about the package of supply measures equivalent to 605 GL in water recovery. Two years ago the Productivity Commission described the package as “highly ambitious”, and last week the Minister described its projects as “well behind schedule” and “at serious risk of failure”. He said the National Water Grid “Authority” would partner with the states to get the projects back on track. His announcement on buybacks puts a lot of pressure on him, and on the “Authority”, to make sure that these measures succeed. As you would expect a diligent Opposition to do, we will be watching carefully.

I greatly appreciate the opportunity I have had today to talk about Labor’s approach to Basin issues, and to talk about trust, confidence and respect. I look forward to working constructively with you, and with the government, in the interests of all parties and the natural environment.