Mike Elliott: Water Resources (Reservation of Water) Bill

Extract from Hansard

Legislative Council
4 July 2001

Mike Elliott
Leader Australian Democrats
Member of the Legislative Council

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The Hon. M.J. ELLIOTT: The Democrats are not opposed to the bill because there is nothing in it to oppose. It is an almost `do nothing' bill, which is really what the government has done, at least in substance, for the best part of 1½ years. I was approached by government representatives early last year-I think, probably, initially in January-wanting to discuss proposals in relation to the allocation of water in the South-East. I met, in the first instance, with the minister's advisers and then, some time in February I think it was, I met with the minister himself and said, `Look, I think that we have some problems here with the direction in which you are currently heading. Your current proposal of simply granting water licences and transferable water licences will not work if you do not take into account the fact that changes in land use could impact on the amount of available water, and you just cannot ignore it.'

The bill, nevertheless, emerged in the parliament-it must have been at the very end of April or in early May. Certainly, I spoke to the second reading of the bill on 2 May 2000 in this place and expressed concern that, at that point, that issue had not been addressed. I continued to express concern as we moved into the committee stage; and I moved amendments which empowered the minister to take into account the potential impact of trees.

The Hon. M.J. ELLIOTT: The bill that came into this place was a government bill-the government of which the honourable member is a member.

The Hon. M.J. ELLIOTT: Will the honourable member just wait until I have finished? The honourable member makes an interjection, I set about answering it but he has his next interjection going because he does not really want to hear the answer.

The bill that came into this place last year, as I said, contained one fatal flaw, and that fatal flaw was the notion that the government was going to grant water licences, that they would be transferable, and it simply ignored the fact that the amount of available water could be altered by changes of land use in areas not holding water licences. I was not arguing last year, and I am not arguing now, about whether or not you should have a transferable licence or whether or not landowners should be able to do whatever they like on the land. What I am saying is that the two notions have a serious compatibility problem.

The Hon. M.J. ELLIOTT: The current Independent turned Liberal and threatening to be Independent again member has certainly failed. But there was a fatal flaw in what the government introduced-the government to which the interjecting member belongs. If the member was concerned about whether or not farmers should have absolute right over rainfall that falls on their land, the government should have got it right then and not introduced the concept of transferable licences- and not only that: they were going to allocate 90 per cent of the water that was available at that time. That was the proposal before us.

It did not take a significant change in land use for the equation to break down, and that was a problem. The mathematics of what the government brought in last year did not work. As I said, regardless of which view you take about transferable licences or the right to use the water that falls on your land, you cannot take them both, unless you are mathematically stupid, because the equation will not work. What you will have, the way things were and the way things are, but to a slightly lesser extent, is that-

The Hon. M.J. ELLIOTT: The back bench interjects again, blindly supporting government policies that have been an absolute and dismal failure, the biggest catastrophe that this state has seen-it has to be comparable with the State Bank.

The Hon. M.J. ELLIOTT: Having expressed concern about that last year, after there was a conference of the two houses the minister gave a clear undertaking to this parliament that, by the end of the year, he would have addressed the issue. The parliament acceded to the legislation going through, but the minister gave a clear undertaking that the issue would be addressed by the end of the year. In fact, he did not resolve it by the end of the year, and he still has not resolved it. On my advice, he has now been to the cabinet on 12 occasions and he has been rolled on almost every occasion. I understand that he got to the party room on one occasion, that he got past the cabinet, and then was rolled in the party room. But we should give him some credit: he at least had the brains to work out that there was a problem that needed fixing-and, unfortunately, too many members of the government have not worked out what the real problem is at this stage.

We have before us a bill which masquerades as addressing the issue and which does very little. The minister, in introducing the bill, said that the government would be reserving an amount of water in prescribed areas, where it is thought appropriate to do so for a strategically important economic development or for environmental purposes. The notion of reserving water is a good one. Initially, as I said, last year the government was proposing that it would seek to reserve 10 per cent. The figure now proposed is 20 per cent- although, in fact, the legislation has no figures in it at all; it is just the minister saying that he will seek to reserve 20 per cent. It would be true that for a significant number of hundreds the allocation of water is already such that nothing like 20 per cent could be reserved. Indeed, there is a danger in some hundreds that there may be an over allocation.

On my recollection, last year the minister did not-and still has not-indicated exactly what environmental purposes means, whether he means that Eight Mile Creek will continue to flow or whether he means something more than that, I really do not know. He has not given any explanation as to what it means. We do not have an indication at this stage, but with 20 per cent being reserved, is the minister thinking that half of that is for future economic development and half for environmental purposes, or is it some other ratio? How exactly does he derive that environmental purposes figure?

Clearly, it only takes a marginal change of recharge rate to have a significant impact on the available resource and a change in land use is not the only threat to recharge rate: a change in climate has that capacity as well. Certainly over the last couple of years my parents have indicated to me that they feel, on average, the winters are a little drier than they were in earlier years. Certainly, climate change models that are-

The Hon. M.J. ELLIOTT: No, they do not have a vested interest in this issue at this stage. The predictions of future climate change suggest that the climatic zones will tend to spread further away from the equator, so the consequences of that would be that the climate of Mount Gambier would become a little more like that of places further north, so a bit more like the climate of Naracoorte-

The Hon. M.J. ELLIOTT: That has significant implications in terms of the amount of rainfall that actually arrives, to start off with, but it also means that the place is slightly warmer, which increases the evaporation rate. Of course, winter rains will tend to penetrate and be absorbed, whereas rain at other times of the year tends to be less likely to be. Any climate change-and I think the overwhelming majority of climatologists indicate that that is likely to happen-is likely to be detrimental to the water resources of the South- East. The reserve amount that has been set of 20 per cent needs to also anticipate the potential for change, which could happen within the lifetime of some investments currently being made.

I note that the minister in his speech says that he wants to have further time to address the complex matter of the impact of land use change on recharge of water availability, and there is an indication that scientific research will be carried out. The question I ask of the minister is: considering this issue was raised with him early last year, why has he waited almost 18 months before starting to address the issue of scientific evidence? Frankly, I think that there is already a great deal of scientific evidence available to groups such as the CSIRO that have done work on evapo-transpiration on various species over many decades. I think that, more than anything else, this is buying time to get the issue off the agenda until after the next election, which we are seeing happening with a number of issues.

While speaking of scientific evidence, I met with representatives of the timber industry from the South-East from the regional development board. They asked to meet with me so that they could discuss their viewpoint, and we had a very free and frank exchange on the issue of land use and so on. Some of them were trying to argue that in fact there would be no impact on recharge and that, indeed, expansion of forestry was not a threat to available water.

I put it to them that, if that was the case, I would even accept a back-of-an-envelope calculation to demonstrate it in relation to a couple of hundreds where there is already a high level of allocation of the available resource, and the area around Coonawarra is one example. I gave them two hundreds that I thought were good illustrations. I told them to come back later and show me that, with the current irrigation practices and forestry expanded in those hundreds, the water would still be available and, if they did that, I would be convinced. They said, `Okay. No worries; we will go away and do it.' I have not seen them since.

The Hon. M.J. ELLIOTT: I don't know; the envelope was not big enough, or something. My response to them was to say, `Let's take the most extreme example of those areas that are most heavily used already and demonstrate that your claim will work.' It seems that they simply could not do that. The minister is now saying that he will do more scientific assessment.

Some people are trying to turn the current debate into a philosophical one and trying to ignore the science of what is happening in the South-East. As I indicated, I do not mind having a philosophical debate. I suppose the Liberal Party could put up a position that says, `You can only use the rainfall that falls on your land' and an irrigator who wants to operate should buy land with sufficient rainfall to irrigate. That is another way to go and it would be scientifically defensible in terms of saying that the water balance will remain.

I suppose there are other ways of getting a mix of the two. You might say that a certain amount of land is available for forestry use or whatever, and a certain amount of the total allocation of water always remains attached to particular properties and remains on the property. That would not be a problem at all. If the government wants to pick winners-including forestry-it can actually designate that a certain percentage of water is allocated only for forestry purposes.

The Hon. M.J. ELLIOTT: It shows again that you have taken no notice of the debate. In relation to the competitive use of water, my argument is that if forestry is the best economic use of water-and it has to compete with water, as with every other industry-the best economic use should prevail. That is the sort of philosophy that the Liberal Party has argued in relation to a lot of things over many years. In fact, that is the precise argument that this government has used in relation to the transferability of water licences in the Murray-Darling Basin. The government's argument is that we will get the best economic return by having transferability of water licences. It seems to be a matter of convenience because it quite happily uses it in relation to the Murray-Darling, but some members of the government say that they do not like that elsewhere. I am not trying to pick forestry as a winner by bringing it into the equation.

I have a view that, with water in the equation, there would still be substantial expansion of forestry. For instance, there are areas in the South-East that are not suitable for irrigation but are suitable for forestry for a range of reasons, such as the groundwater is highly saline in some areas. In fact, the more forestry that goes into those areas the better.

The Hon. M.J. ELLIOTT: I do not think you would have heard a justification for both transferable licences and, at the same time, saying that land use should not be impacted on in any way. With the minister now reserving 20 per cent of water, where that is available, I cannot find anything in this bill that addresses the question as to what will happen in the meantime in terms of forestry.

The Hon. M.J. ELLIOTT: If you want to talk about a capital strike, there is a real danger of a capital strike in relation to dairy farming and horticulture because there have been investors, and some investors were in Mount Gambier for quite some time looking to expand dairying, for instance.

The Hon. M.J. ELLIOTT: The investors who were wanting to invest in dairying had come from New Zealand where the costs of production, land, and so on, were significantly higher than those in Australia. They were highly capitalised and in a position to take advantage of the situation in South Australia. They were, indeed, becoming somewhat reluctant at the point of deregulation, but the major impediment they have at this stage is the question not only if they can get a water licence in the short term but, indeed, how secure they are in the long- term. That is quite a different question from that about existing dairy farmers who have been there for many generations and who are not, in many cases, highly capitalised as are these investors who have come in from overseas and are finding themselves in a very different position. So, the member's interjection of `idiot' is, as usual, just inane.

There was a clear justification for expressing a concern that investors were looking to go into the industry. It is the same as we saw in horticulture for many years in the Riverland. Some people were doing very nicely. The people who were highly capitalised were in a position to take advantage of opportunities, even when things were bad. People were investing in almonds, etc., and people who had plenty of capital did not have a problem. But the existing growers up there who were not highly capitalised were in desperate trouble.

That is situation with dairying. There are people coming into the industry who, with sufficient capital, were making a go of it, even with the low prices. But many other people were trapped, as I said, undercapitalised as they were for the rapidly changing situation. I think that justifies both concerns: a concern that many people are hurting and that other people who want to invest have so far been precluded.

As I said, I will wait for the committee stage to consider individual clauses but, for the most part, the bill does not really change an awful lot. The only thing that superficially that is attractive is that the minister proposes 20 per cent of water being reserved but, in fact, that figure is not actually found within the bill at all.