Government Lacks Strategy on Murray Darling Basin Plan, Despite Election Promises

Senator ROBERTS: How much has been spent on the Restoring Our Rivers draft framework so far? After two years in office, I expected a more detailed and transparent document than this.  

Ms O’Connell: The Restoring Our Rivers framework followed the amendments to the basin plan and Water Act at the very end of last calendar year. That’s a framework released on 29 January, earlier this year, to go through and explain how we’re proposing to deliver the 450 gigalitres. It was released with a range of principles and programs around the delivery of the 450, and released for consultation. With the new legislation there’s an expanded time frame to the end of 2027 to deliver the 450. This is an important consultation document that was released early to seek views and public consultations on how we’re going to go about delivering that 450 gigalitres. We had over 100 submissions. We had lots of consultations with representative groups. At the same time as releasing that framework for consultation we did open one of the programs. That program is our water recovery infrastructure program, which is state led. It was launched on 29 January, and that’s an opportunity for basin states to bring forward water-saving infrastructure projects. So, that’s actual projects to be delivered. Those projects would include off-farm projects, on the property and non-farm projects. That’s a program that opened on 29 January. 

Senator ROBERTS: This document came out in January this year; that’s what you’re saying?  

Ms O’Connell: The Restoring Our Rivers draft framework document?  

Senator ROBERTS: That’s it.  

Ms O’Connell: It followed the changes to the legislation. That’s the important thing. The legislation changed at the end of November.  The legislation passed parliament at the end of November and commenced on 7 December.  

Senator ROBERTS: I would have thought there would have been a lot of work put into that legislation. I’m assuming there was, but I’m amazed at the lack of any real data in this plan or draft framework. It suggests to me that the department is flat out of ideas. It’s like nobody cares anymore. Just buy what we need in water buybacks and destroy the bush and call the job done. Minister, are you stalling for an election rather than upsetting people now with buybacks?  

Ms O’Connell: When that framework was released, we also opened a program—not something for consultation, an actual program—for state-led infrastructure projects to come forward to be proposed.  The framework is, as it says, a framing document. It articulates three proposed programs. The first program that Ms O’Connell refers to, the Resilient Rivers Water Infrastructure Program, is supported by a range of extensive guideline documents, which are available on our website. There are discussions going on with states about getting access to what I think is almost half a billion dollars worth of funding. We have been consulting extensively in relation to another proposed program under the framework, which is a sustainable communities program. Once the results of consultation have been taken on board and that program commences, additional information and guidance around that program will also be published on the website. The third proposed program is in relation to a proposed voluntary water purchase, and the same thing will occur there. It’s a framing document to articulate a range of proposed programs across a variety of recovery tools.  

Senator ROBERTS: It just seems that it’s lacking in data and detail. It just seems light on. But thank you for your answers. Minister, the draft plan actually proposes on page 16 to count the water overpurchases towards the 450 gigalitres. Minister, will you give an undertaking to do exactly that?  

Senator McAllister: I think it is dependent on understanding what any overrecovery might have involved and officials can give you an update on how the system works to produce an evaluation of the state of play, for want of a better term.  

Ms Connell: Currently, there are approximately 78 gigalitres of overcovered water across the northern and southern basins. In terms of being able to count that amount of water towards the 450 gigalitre target, some of those catchments are in New South Wales and they’re in catchments for which water resource plans are yet to be accredited. To be able to determine what the final overrecovery amount is requires the water resource plan to be accredited and for the MDBA to have assessed and verified the modelling so we can have the assurance of exactly where the overrecovered amount falls. We expect to be in a situation across all of the relevant catchments—and I think there are about seven or eight where there are overrecoveries—where work is completed by the MDBA by about June next year.  

Senator ROBERTS: We’re waiting on some of the New South Wales valleys, I understand?  

Ms Connell: That’s correct.  In earlier evidence today, there are six remaining water resource plans to be accredited out of the 20 for New South Wales. There is a dependence there, as my colleague outlined.  

Senator ROBERTS: I can understand you’re not making a commitment without those plans, but assuming the plans are in place then overrecovery will be counted as part of the 450?  

Ms Connell: The draft framework contemplates that exact situation, and we’re in the process of assessing. We got over 100 submissions and they’re of a really high detailed quality. We recently released a report which digests all of that consultation feedback. That’s been now put on the public record. The next step is to publish the final framework. The final framework will set out the government’s proposed approach in relation to overrecoveries.  

Senator ROBERTS: How is the government implementing the Productivity Commission’s recommendations on a new approach to water recovery while also meeting the legislated requirements to consider the socioeconomic impacts on river communities? 

Ms Connell: As you refer to, the Productivity Commission released its, I think, second implementation inquiry into the basin plan, which was published this year. It had a range of recommendations and many of those recommendations have actually been implemented or acted upon in terms of securing the Our Rivers legislation. Then there are a range of other initiatives that the government is undertaking to implement those recommendations. There’s quite a number of them. If there’s a specific recommendation you’re interested in, I’m happy to give you an answer about that one.  

Senator ROBERTS: Can you give me an overview of how the government is implementing the Productivity Commission’s recommendations?  

Ms Connell: The first key critical step to deal with the range of issues the Productivity Commission raised was actually the passage of the Restoring Our Rivers legislation. The Productivity Commission released its interim report while the legislation was in parliament and progressing through parliament. A lot of the amendments moved in the House of Representatives and in the Senate went to addressing issues in the Productivity Commission report. Time Frame extensions were a key issue the Productivity Commission raised. They called out, as many reports have over the last couple of years in terms of basin plan progress, that more time was required. That was a key component of the legislation. They called out the fact that the 450 gigalitre target would require water purchase. Voluntary water purchase is one of the pathways for recovery. They noted that was more cost-effective relative to infrastructure projects. One of the key elements of the Restoring Our Rivers Act was to make water purchase a feasible pathway.  

Senator ROBERTS: What about in relation to meeting the legislated requirement to consider the socioeconomic impacts on river communities?  

Ms Connell: The legislation included several reforms in relation to that proposal. Firstly, there’s a requirement for a third independent review of the WESA. Unlike the first two reviews, the third review has to actually look at socioeconomic impacts on basin communities. The minister is now also required to consider the social and economic impacts on basin communities of a proposed water purchase program before she launches a water purchase program. There is quite a range of initiatives in relation to socioeconomic impacts.  

Significantly, more broadly, there are three principles that guide overall water recovery. The first of those is enhanced environmental outcomes. The second is minimising socioeconomic impacts, and the third is achieving value for money. So, there’s an overall set of principles.  

I will just note one of the key recommendations of the commission—I think it’s recommendation 2.4—was that in terms of water recovery the government should take a staged and gradual approach and it should provide adjustment assistance to communities to deal with proposed water purchase. As Ms O’Connell said, that’s at the core of the draft framework. One of the three pillars, if you like, is looking at socioeconomic impacts, and one of the responses to that is the establishment of a sustainable communities program. The purpose of that program will be to provide adjustment assistance to communities.  

Senator ROBERTS: I’ll come back to that later. Why has the government not released the Water Recovery Strategy foreshadowed by the Productivity Commission? Six months after the passage of the restoring our rivers bill, why do we only have a draft framework lacking in detail?  

Ms Connell: As I said earlier, the draft framework foreshadows three programs. One of those programs is a water purchase program. When the government moves to commence water purchase, it will release the document that the Productivity Commission refers to.  The legislation passed at the end of November. The framework was released at the end of January, so not long after. It’s important that we go out and consult on these matters. There’s a huge amount of interest. That’s what we were doing, consulting.  

Senator ROBERTS: When will the feedback on the government’s draft framework on recovering the additional 450 gigs be made available?  

Ms O’Connell: That I think was actually published on our website yesterday. I’m happy to table a copy—  

Senator ROBERTS: Yesterday? That’s a funny thing. Pardon me for being a bit—what’s the word?  

Senator Payman: Cynical.  

Senator ROBERTS: No, not quite ‘cynical’. Sceptical maybe. A number of things were published right before the day of standard estimates scheduled hearings. Anyway, that’s good. Thank you.  

Senator McAllister: I suppose the counterfactual is that if it’s not published then you don’t have the opportunity to examine it. You’re very welcome to ask questions about the material that’s in the public domain.  

Ms O’Connell: If it’s useful, we can table the link so that you can go to it, but it is on our website. 

CHAIR: Last question, Senator Roberts, before we rotate the call.  

Senator ROBERTS: Has the department met with industry groups collectively regarding feedback on this draft framework for the additional 450 gigalitres, and where will it come from?  

Ms O’Connell: Yes, there’s been extensive consultation as part of the framework being out there—as I said, over 100 submissions. But we can also go through and talk to you about the discussions with groups that we’ve had, the consultations that we’ve done and webinars that we’ve had.  The nature of the consultation and the groups we consulted with are set out in the document we’ve published. We’ve held many workshops over the last six months with industry groups and peak stakeholder groups, and we’ve met quite a few times with the basin community committee. We’ve had discussions with particular sectors within industry—the rice sector and the dairy sector.  

Senator ROBERTS: Are those workshops online?  

Ms Connell: Predominantly, but we’ve also had face-to-face meetings and meetings out in the basin. So, through a range of different consultation mechanisms and including public webinars.  

Senator ROBERTS: How many online and how many—  

CHAIR: Senator Roberts, we’re now going to have to rotate the call.  

Senator ROBERTS: If I could just follow up on that. How many face-to-face workshops and how many online?  

Ms Connell: I’d have to take that on notice—  

Senator ROBERTS: If you could, please.  

Ms Connell: to give you that answer.  

Senator ROBERTS: Ms O’Connell or Ms Connell—  

Ms O’Connell: I know—they’re very similar names.  

Senator ROBERTS: Well, for the one with the ‘O’ or the one without the ‘O’, you said the plan water numbers were online. My office is pretty good at surfing the internet, but they clicked right through the website and couldn’t find it. Could you send that link, please, that you offered?  

Ms O’Connell: Yes. Just to be clear, that’s the link on the report on the 450 gigalitre framework consultation?  

Senator ROBERTS: Yes, and the water quantities.  

Ms Connell: The overrecoveries?  

Senator ROBERTS: Yes.  

Ms Connell: We can provide you with that information.  

Senator ROBERTS: How is the government implementing the Productivity Commission’s recommendation on transparency and accountability for basin plan decisions? We’ve got a few here about the ACT. What information has the government released about the Australian Capital Territory Bridging the Gap project announced on 3 April?  

Ms O’Connell: There was a press release on the ACT Bridging the Gap. The date of that release was 3 April 2024. There was a joint media release on ACT fulfilling its water recovery commitments under the MurrayDarling Basin Plan Bridging the Gap.  

Senator ROBERTS: Has there been any more information?  

Ms O’Connell: We’re happy to provide you with more information.  

Mr Southwell: The FFA, the Federation Funding Agreement, that relates to that matter has been published on the Department of Treasury’s website.  

Senator ROBERTS: The Department of Treasury?  

Mr Southwell: It’s a website for federal financial relations and FFA is there.  

Senator ROBERTS: There are so many bureaucracies and so many departments. That’s fine.  

Mr Southwell: That’s where all of the FFAs have to be published. That relates to the minister’s press release. The FFA itself was executed on 14 March when the ACT signed it, and that provided the $58 million for the 6.36 gigalitres of water that the arrangement related to.  

Senator ROBERTS: So, 6.3 gigalitres, did you say?  

Mr Southwell: 6.36 gigalitres.  

Senator ROBERTS: That was to be my next question. Now my next question instead is: how much per megalitre was paid to the ACT, including previous payments?  

Mr Southwell: This FFA is $58.83 million for the 6.36 gigalitres, and that works out at $9,250 a megalitre.  

Senator ROBERTS: What part of the ACT is the water being recovered from?  

Mr Southwell: The FFA itself doesn’t require specific components from the ACT. The ACT has said that they will use the money received to implement long-term water management changes, including water sensitive urban design activities, incentivising community change to reduce water use and water quality improvement activities.  

Senator ROBERTS: So, no specific water was released?  

Mr Southwell: I think it’s called the Halls Gap site—the Lower Molonglo. 

Senator DAVEY: Only state—  

Mr Southwell: No. The transfer of entitlements has occurred. It is with the Commonwealth Environmental Water Holder. The Commonwealth received a licence of 6.36 gigalitres. That comprised 4.9 towards Bridging the Gap, and an additional 1.46 gigalitres of water towards broader basin plan outcomes. That water has since been specified by Minister Plibersek as being held environmental water to contribute towards the 450 gigalitre target.  

Senator ROBERTS: The water is no longer going to the ACT?  

Mr Southwell: That water is now held by the Commonwealth Environmental Water Holder, that entitlement.  

Senator ROBERTS: Is it water that’s actually being held or is it water that will be held due to savings in the future? I didn’t quite understand.  

Mr Southwell: The entitlement has been transferred now.  

Senator ROBERTS: Okay.  

Mr Southwell: It’s with the Commonwealth Environmental Water Holder. Dr Banks: I can confirm that water entitlement was registered on 18 April to the Commonwealth’s environmental water holdings.  

Senator ROBERTS: So, part of that was part of the efficiency measures towards the additional 450 gig?  

Mr Southwell: 1.46 gigalitres. ACT identified that they could deliver 6.36. Their gap that was remaining for Bridging the Gap—4.9. That’s been met in full. So, the ACT no longer has a gap. With the additional 1.46, that has now been determined as contributing towards the 450 gigalitres, which means 1.46 gigalitres less that has to be recovered elsewhere.  

Senator ROBERTS: When or how did officials agree to this socioeconomic criteria for the funding?  

Mr Southwell: The department evaluated the offer that was made from the ACT. We provided advice to the minister, a comprehensive assessment around the water and the value that it represented and its contribution towards the basin plan, and provided advice to the minister accordingly.  

Senator ROBERTS: I appreciate your answers being so direct and clear. Is that publicly available, that information?  

Mr Southwell: The evaluation?  

Senator ROBERTS: Yes.  

Mr Southwell: No.  

Senator ROBERTS: Can we get a copy of it on notice.  

Mr Southwell: On notice.  

Senator ROBERTS: We’re six months out from the passage of the restoring our rivers bill. Have any new SDLAM projects been started? Mr Ward: No new projects have been started. But as I mentioned earlier in the day, we’re working very closely with our basin state colleagues on identifying ideas and progressing them forward. There were seven that were shortlisted by the basin officials committee earlier this year for the states to undertake further development of those, and the information on that is published on our department website.  Have any decisions been made on new SDLAM projects?  

Ms O’Connell: Not by basin officials committees yet. There are prospective projects being worked on. We anticipate—and I gave this evidence earlier today—that New South Wales will be bringing forward a new project soon. They have advised us they intend bringing forward a new project soon and then basin officials will have a look at that.  

Senator ROBERTS: What timeline is likely for new SDLAM projects?  

Ms O’Connell: It really depends on the project in terms of how long it takes to deliver the project. The delivery timeframe for all SDLAM projects, which applies to new ones, is— Mr Ward: There are three key dates. New projects have to be notified by basin officials by 30 June 2025. States then have until 30 June 2026 to either amend or withdraw projects, and then all projects must be in operation on 31 December 2026.  

Senator ROBERTS: I take it it’s too early to determine what the likely volumetric outcome is, much too early?  

Ms O’Connell: Correct. It is a tight timeframe, as my colleague outlined. 

Mr McConville: If I may add, the reconciliation process will occur, in terms of your question around volumes, after December 2026. The MDBA will be required to do a reconciliation after that.  

Senator ROBERTS: Socioeconomic considerations—how is the government intending to meet the requirements to consider socioeconomic impacts of buybacks when it has such an unrealistic target, in my opinion, of recovery of 100 gigalitres per annum?  

Ms Connell: As the draft framework makes clear, considering socioeconomic impacts needs to be a key consideration in each water recovery pathway. It really depends on the option being pursued, whether it’s infrastructure, rules based or voluntary water purchase. But I can talk in more detail about the work that we’re doing and the investigations we’re undertaking in relation to potential water purchase. We’re undertaking a range of work. There was a quite significant investigation into socioeconomic impacts of the basin plan quite a few years ago chaired by Robbie Sefton. She chaired a panel. The advice of the Sefton report was, given that there are really quite complex drivers of socioeconomic impacts in the basin—climate, drought, technology, labour inputs, energy inputs—it’s important to look at multiple lines of inquiry to develop the evidence base. So we’re doing a couple of things. We’re looking back. We’ve got the benefit of a range of reports that have been undertaken looking at socioeconomic impacts of water recovery options over the last couple of years. AITHER has done some work for the Murray-Darling Basin Authority, which has been a key reference point for us. Marsden Jacobs Associates, another firm, did quite detailed investigations for the Sefton review, and New South Wales has recently published a report which we’ve had reference to as well. I guess the other key significant thing that we’re doing is most of those reports find that it’s quite hard to actually pull apart what impacts water recovery has on regional communities, and it’s important to have a discussion with communities to involve them in those issues. One of the key elements of the consultation we did around the draft framework was to seek very specific feedback about past experience of water recovery programs, past experience of community adjustment programs, and we’re pulling that all together. We’ll also be drawing on advice from ABARES.  

Senator ROBERTS: My understanding is that it used to be the requirement that we must have a socioeconomic benefit. Now it comes down to, at the top of page 18 of your draft framework report, the ‘Sustainable Communities program will seek to mitigate unavoidable socioeconomic impacts’.  

Ms Connell: That’s right.  

Senator ROBERTS: Let’s change the target.  

Ms Connell: Our first order approach is to prioritise a non-water purchase option. We’ve talked quite a bit today about the fact that the infrastructure program opened in January and then the other kind of core program under the framework is the Sustainable Communities program. We’ve been working really quite intensively with stakeholders to get feedback on a draft of principles to guide how funding for community adjustment should be directed. So, we’ve received really quite extensive and clear feedback. There are seven principles that will form the foundation of the community adjustment program. The feedback largely supported each of those principles. Many of them were very strongly supported. There was a strong emphasis from local councils in particular. They’ve been closely engaged in the design of any community adjustment principles. So, that is something we will be definitely taking on board. We’re currently working with basin states to look at getting funding arrangements in place so that funding can flow in the new financial year. 

CHAIR: Senator Roberts.  

Senator ROBERTS: The draft framework for delivering the additional 450 gigalitres per year outlined in the restoring our rivers bill provided more funding towards finalising the basin plan, but the budget indicated this funding was not for publication. How much funding is required?  

Ms O’Connell: As you mentioned, the budget papers say that it is not for publication, and the reason for that is there will be potential for competitive tendering. You wouldn’t normally publish the figures prior to going to a tender.  

Senator ROBERTS: Thank you. I accept that.  

Ms O’Connell: So it’s not for publication.  

Senator ROBERTS: What provision will be made to support the river communities that will be impacted by water recovery?  

Ms Connell: We spoke about that a bit earlier this afternoon. The framework describes a Sustainable Communities program that’s for community adjustment. The funding will go through states under federal financial agreements. The proposal is for a specific standalone program focused on supporting communities that need support to adjust, and for that funding to be provided through states who are best placed to work with local communities to build on their existing regional stakeholder engagement networks, and also to build on existing funding that’s going into those particular communities that need to be the focus.  

Senator ROBERTS: So federal funding through the states?  

Ms Connell: Funding under FFAs, federal funding agreements.  

Senator ROBERTS: Minister, this seems to be a continuation of the undeclared war on farmers. I’ve been to Dirranbandi in Southern Queensland, the border community there, and the same applies to Northern New South Wales. Senator Davey, I’m sure, will be concerned as well. Who gets the land after you drive farmers off? A lot of farmers have been driven off in Dirranbandi and other places. Who is going to use this land once you get rid of the farmers? For what purpose will they use it?  

Senator McAllister: I don’t accept the scenarios that you set out in your question. Nor do I accept your characterisation of our posture towards Australian agricultural communities. Our view is that a sustainable basin, a healthy working river, is essential to underwrite the future of food and fibre production in this country, to underwrite the future of regional towns that depend, as has been discussed earlier today, on adequate supplies of clean drinking water, and also to protect our environmental assets in the basin. We think those three things are compatible with one another and, in fact, interdependent. The approach we’re taking is working through a difficult and challenging reform. It now looks like it will be a multidecade reform. It’s one that’s been going on for many years. It requires cooperation between the states and the territories and the Commonwealth. It has been bipartisan. Regrettably, not very much progress was made in the decade that the coalition was in office. But in the two years we’ve been in government we have set about looking at the progress that’s been made so far, what more needs to be done and putting in place the legislative arrangements, the financial arrangements and the implementation arrangements, to implement the basin plan in full.  

Senator ROBERTS: Have you heard of the rewilding plan that’s part of the United Nations Agenda 2030 as it is now? It was exposed in the United States. There are similar concepts here.  

Senator McAllister: You’ll have to table the United Nations documentation. I haven’t seen that documentation.  

Senator ROBERTS: What about hollowing out the bush? I’ve been to Moulamein in southern New South Wales and northern Victoria. What about compensation to supermarkets, small businesses in the areas who will all lose business with the water that’s going to be taken, and with that lose the critical mass necessary to keep these towns going? Football teams are dying; sporting clubs are dying. What about the compensation for the people who are not on the land but who depend upon the people on the land?  

Senator McAllister: Over the course of today we’ve had a few discussions about socioeconomic impacts, some of them in response to questions from yourself. I think you heard Ms Connor speak earlier about some of the research that’s occurred already about the multiple drivers of change in Australian rural communities. You’ve also heard Ms O’Connell and Ms Connor speak about the approach to socioeconomic assessment in terms of any decisions that might be taken. You have, thirdly, heard just now a description of the approach that’s proposed in terms of working with the states and territories to provide support for communities. I’m not sure how further to respond to your questions, but I do think a lot of information has been provided over the course of the day about the way we’re thinking about these challenges in implementing the plan in full—something I believe continues to have bipartisan support, as confirmed by Senators Davey and Ruston earlier.  

Senator ROBERTS: What is the total cost estimate to complete the basin plan?  

Mr Dadswell: Current public commitments to the basin plan are around $13 billion. That’s over the life of the plan, over the last 12 years. There’s about—  

Senator ROBERTS: So that includes past—  

Mr Dadswell: Yes, past programs and existing, and including the ones from the 2024-25 budget. There’s around $3 billion in publicly stated funding that remains against that $13 billion to be spent.  

Senator ROBERTS: Thank you.