Speech to the Murray Darling Association 70th Conference
Tumut, New South Wales – 15 October 2014

Thank you very much Austin for that welcome, to Mayor Thompson thank you for the warm welcome to Tumut.  This is truly a beautiful, beautiful picturesque town, with a stunning theatre we’re gathered in today.  I was admiring the exquisite curtains as a backdrop on this stage as a demonstration clearly of the town’s pride and its history and its heritage and built beauty and well as the natural beauty of the town.  You have much to be proud of as well as of course the economic strengths and diversity in your town spoken [unclear].To the tradition owners who have provided a welcome already, many distinguished guests, president, Greg Toll, other members and representatives of local government, and the local Murray Darling Association thank you all so very, very much for inviting me to officially open and address the Association’s 70th Anniversary Conference here in beautiful Tumut. 

It is just over one year since I last spoke with you at your 69th Anniversary Conference having recently then taken on the role as Parliamentary Secretary for the Environment with responsibility for Commonwealth water policy.  It is almost two years since the making of the Murray Darling Basin Plan, ten years since the signing of the National Water Initiative and one hundred years since the historic signing of the first River Murray Waters Agreement by the Commonwealth, New South Wales, Victoria and South Australia.  It is clearly a year of anniversaries!

The alignment between the 100th anniversary of the signing of the River Murray Waters Agreement in 1914 and founding of the Murray Darling Association, then known as the Murray Valley Development League, in 1944 is symbolic of how important it is to make strong connections between the setting and implementing of government policy objectives and communities.

Close engagement with the people and organisations on the ground that know their environment, industries and communities best are crucial to our shared success.

For example, I'm told that the Snowy Hydro-electric Scheme wasn’t viable until a role for the Scheme in supporting the irrigated agriculture in the Murray and Murrumbidgee catchments was proposed. The Murray Darling Association played a key role in promoting this additional role and in ensuring that releases from the Scheme benefitted communities of the Murray and Murrumbidgee.

It is that very connection that the Association has with its members and their communities that provides the foundation for representing the interests and development needs of those diverse communities. 

As the foundation of the current water sharing arrangements in the River Murray System, the 100 year old River Murray Waters Agreement was signed in response to a period of severe drought and growing concerns between states over the management of the water resources of the River Murray.

Much like the negotiations around the recent Basin Plan, settling the terms of the agreement 100 years ago was a protracted and challenging process. At its conclusion the agreement was described by the  then South Australian Attorney General JH Gordon as “the first fruit of Federation”.

Consistent with Mark Twain's timeless observation that “whiskey's for drinking, water's for fighting over”, management of the Murray-Darling system is akin sometimes to a roller coaster ride.  The varying willingness to cooperate over a shared resource between the different states and different times, coupled with the variable climate, makes for plenty of highs and lows.

Commonwealth, state, territory and local governments have come a long way since the early days of the negotiations, and in more recent negotiations surrounding the Basin Plan.  It is testament to the fundamental “fit-for-purpose” principles within the original River Murray Waters Agreement that many elements of the 1914 agreement remain in place today. 

How we service the demands of community and industry needs for water without compromising the health of the river system, and how we support growth in demand for water resources and development while maintaining healthy environments is a perennial question that ensures the policy making challenges of today have many parallels with the past.

In many respects the making of the Basin Plan in November 2012 rests on the foundation of the River Murray Waters Agreement and more recently on the principles and objectives set out under the National Water Initiative 10 years ago. It is also true to say that the making of the Plan was just the start of this latest phase of a reform process that has been underway since the start of Australia’s Federation.

The Basin Plan is the foundation for implementing new arrangements that manage the water resources of the Murray-Darling.  Importantly, the Abbott Government remains committed to ensuring that these new arrangements are built on local knowledge, balancing the needs of communities, industries and the environmental values of the waterways on which they rely.

You, the Murray Darling Association continues to be an important vehicle through which local communities and industries can come together to effectively influence Government policy. 

When I spoke with you at last year’s Conference in Goolwa, I was just 21 days into my role as a Parliamentary Secretary with responsibility for water in the then 21 day old government. We’re now 100 years on from the first River Murray agreement, but we are just twelve months into implementing our government’s policies for water reform and approaches to the Basin Plan.

Last year I made four commitments to you about what you could expect from the Abbott Government. A lot has happened in those 12 months and today I would like to reflect on some of the key areas of activity since we last met.

Commitment 1: Ongoing water reform

The first commitment I made was that the Abbott Government is committed to ongoing water reform. Central to this is our determination to deliver the Basin Plan in full and on time.

Getting all jurisdictions signed on to the Inter-governmental Agreement on implementing water reform in the Murray-Darling Basin was a key outcome in this task.

Following extensive negotiations the final signatures of Queensland and New South Wales to the Agreement were secured in February of this year.  As a consequence all the Basin States and the Australian Capital Territory have access to Commonwealth funds up to a value of $139.5 million to support them in implementing the Basin Plan, as well as funding to assist with community adjustment through economic diversification.

This includes support for preparing Basin Plan compliant Water Resource Plans that ensures the Sustainable Diversion Limits set by the Basin Plan are achieved.

Importantly, by signing onto the Inter-governmental Agreement New South Wales, Victoria and South Australia also gain access to a further Commonwealth contribution of up to $34.5 million to prepare proposals that achieve the environmental outcomes required by the Basin Plan but require less held environmental water.  These proposals will seek to reduce the amount of water that has to be taken out of the consumptive pool used by your local irrigators and related industries.

This potential reduction of up to 650 gigalitres from the Basin Plan’s environmental water recovery target of 2 750 gigalitres will be delivered through the, not quite elegantly named ,Sustainable Diversion Limit Adjustment Mechanism provided under the Basin Plan.  Adjustment proposals prepared by each state will be assessed and agreed collectively by all the Parties to the Inter-governmental Agreement in 2016.

The adjustment mechanism has the potential to deliver real triple bottom line benefits to the economy, communities and environment. This is only possible because we got the Inter-governmental Agreement signed by all of the states this year.

A review of the Water Act has also been initiated this year.  On 12 May 2014, I announced the terms of reference and Expert Panel for this independent review.

The Expert Panel is led by Mr Eamonn Moran PSM QC, who undertook the review of Victoria’s Water Act with other Panel members being Mr Peter Anderson, Dr Steve Morton and Mr Gavin McMahon.  With experience across the law, business regulation, science and irrigation, they bring the breadth of expertise and knowledge required to conduct this important review. 

The Expert Panel is considering whether the Act is delivering on its objects effectively.  Importantly, the Review also provides an opportunity to take a look at whether the Act could deliver on these objects with a reduced or simplified regulatory burden.  This is consistent with our Government’s commitment to reduce red tape across the Australian economy by $1 billion per annum.

I appreciate the Murray Darling Association's commitment in making submission to the Review, especially while they were going through a major transition process.  The Association also took the opportunity to further develop the issues raised in their submission during the roundtable sessions held by the Expert Panel.

The Expert Panel following their extensive consultations is now considering the information provided in over 70 submissions and during the consultation process and is expected to provide a report to me next month. I look forward to receiving the report and hopefully delivering the recommendations that do ease the regulatory burden for the businesses and communities in the Basin.

Commitment 2: MDB Food Bowl

The second commitment I made to you last year was that the Abbott Government will work to ensure the Basin remains Australia’s primary food bowl.

Just yesterday the Prime Minister identified food and agribusiness as a focus for one of five key industry growth centres designed to better link our key industries with world class research and innovation opportunities.  Being responsible for around one third of Australia's food production, valued at around $19billion per annum, the Basin should rightly be the centre of future agricultural growth.

In implementing the Basin Plan, our Government’s focus is on ensuring that the communities and industries that rely on the water resources of the Basin and that make such an important contribution to the nation’s economic and social prosperity remain vibrant, innovative and productive into the future.

A key component in achieving this is pursuing the water recovery target set by the Basin Plan in ways that maximise the opportunities to grow in innovation and increase the productive capacity of the industries that use the water resources of the Basin.

This ambition is at the centre of the first ever Commonwealth Water Recovery Strategy, which we released this year to give certainty to stakeholders about our approach to implementing the Basin Plan.

We are committed to focus on water recovery through infrastructure improvements rather than through non-strategic water purchasing and we reallocated funding from buybacks to infrastructure in the portfolio accordingly.  It is also why we have delivered on our election promise to cap the purchase of water to 1500 gigalitres.

We have already contracted or received around 1900 gigalitres of the 2750 gigalitres required by the Basin Plan.  We are delivering over 600 gigalitres via infrastructure efficiency dividends, by investing in making farms more efficient and irrigation systems more efficient.  And we aim to deliver 650 gigalitres by investing in similar works and measures with the states to make our environmental watering and management of the river systems equally more efficient.

With the 1500 gigalitre cap in place, water buybacks will now progress at a much slower pace.  Investment in water saving infrastructure during the next four years will progress at a much faster pace and will be over $2.3 billion during that time.

In 2014–2015, just a few small purchase initiatives are planned in four regions of the Basin to help bridge the expected remaining gap to their Sustainable Diversion Limits.

These areas are: the southern NSW connected catchment, Victoria in connection with the Goulburn-Murray Connections Project, Queensland’s Condamine-Balonne, and the Queensland Central Condamine Alluvium – in which a competitive tender for groundwater is currently open.

The Water Recovery Strategy being released will be updated periodically to incorporate the latest information on the volume of environmental water recovered through various programmes.

In 2016, the Strategy will be reviewed following the operation of the Sustainable Diversion Limits Adjustment Mechanism.

It is important to note that in general, completed infrastructure projects have demonstrated improved farm scale productivity benefits such as increased crop rotation ability, increased water use efficiencies, improved soil management, reduced maintenance and reduced weed control requirements.  In addition, some projects have achieved greater than anticipated water savings, the benefit of which is retained by irrigators.

The operation of an efficient and responsive water market is also a foundation component in maintaining the capacity of farmers and industries in the Basin to maintain and grow their productive capacity.

By extending standard economic and sustainability principles to water pricing, planning and allocation, the National Water Initiative continues to drive water efficiency and water-related investment that benefits us all.

This basic economic concept of having tradable rights in water has provided far greater certainty for investment, greater clarity for our environmental goals and improved our capacity to effectively deal with both expected and unexpected changes.

Effective price signals improve water market efficiency, water use efficiency and support redistribution of water resources to areas where they will be used most productively.

Efficiently operating markets always come into their own in times of scarcity, where a limited resource should flow to the highest value outcomes.

The water market certainly came into its own during the trials and tribulations of the Millennium Drought.  At its peak the proportion of water allocations traded in the Southern Murray-Darling increased – from just 5 per cent in 2001 to over 30 per cent just six years later in 2007.

In our first year in office we have taken steps to strengthen the operation of the water market by removing legal uncertainty that existed around some trading, clarifying that basic tradable rights of water are not subject to more complex regulations under the Corporations Act or ASIC Act.

New water trading rules also came into effect across the Murray-Darling Basin on 1 July, which only help to further strengthen the efficiency and operation of the water market.

An effective market opens up more options for irrigation businesses and environmental managers to manage their changing circumstances.

While irrigators have become accustomed to using the power of the market, this year also saw the Commonwealth Environmental Water Holder take their first steps into using the market to achieve better environmental, economic and social outcomes, by undertaking their first ever trade of water allocations.  In addition to the first trade taking place protocols were developed, approved and released to give all stakeholders confidence in the Commonwealth’s approach to the trading of environmental water.

Commitment 3: Local Voices

My third commitment, last year, was that the Abbott Government will give local Murray-Darling Basin communities a real say.

In addition to the requirement that state proposals to adjust the Sustainable Diversion Limits must demonstrate how affected communities have been consulted, I think there are a couple of other important features in our implementation of the Basin Plan.

The first and perhaps the most tangible is the recent appointment by the Commonwealth Environmental Water Office of six Local Engagement Officers. These Officers are based in Berri (South Australia), Mildura (Victoria), Deniliquin, Leeton and Dubbo (New South Wales) and Goondiwindi in Queensland. They work closely with people within the catchments, sharing information and gathering ideas on the best use of environmental water locally.

This expression of localism is an important step that the Commonwealth Environmental Water Holder is taking to meet the expectation that he plans water use at a Basin wide scale while acting locally.

Given that since 2009 over 3500 gigalitres of Commonwealth environmental water has been delivered to the rivers, wetlands and floodplains of the Murray-Darling Basin, the role of the Local Engagement Officer in harnessing local knowledge and information for future environmental watering actions taken by the Commonwealth is an exciting opportunity for members of the Murray-Darling Association to be active participants in these events.

The second important feature in giving local communities a real say is our expectation and commitment that the Constraints Management Strategy designed by the Murray-Darling Basin Authority will now shift to a stage of even closer consultation and engagement with affected communities.

I know that Craig Knowles, the Chair of the Authority this year, will be speaking to you later in the Conference and I’m sure he will have more to say on this topic.

In mentioning Craig I also understand that he will also have something to say about the looming end of his term as chair of the Authority.  Public occasions like today, with so many community stakeholders in the one location, are few and far between and I want to take this opportunity to thank Craig for his tireless work as chair, especially his relentless commitment to localism which he has not only embedded in our policy approaches but has lived through his many travels and visits throughout the Basin. Craig can be proud of the historic reforms achieved during his tenure and I am sure he will remain a trusted advisor to many on water issues, as he has been to me over the last year.

Given the close collaboration between the Association and the Authority as expressed through your recent Memorandum of Understanding, I am confident that the Association will continue to have strong and effective input to how the Authority undertakes its responsibilities under the Basin Plan.

In terms of addressing the constraints described in the Constraints Management Strategy, it will be up to the collective agreement of the Parties to the Intergovernmental Agreement, the Commonwealth, the States and the ACT, to determine which constraints management projects go ahead.

As with the SDL adjustment proposals I spoke of earlier, constraints management project proposals will also have to demonstrate how local communities have been consulted in the design of those specific proposals.

From a Commonwealth perspective we will only be supporting those projects which demonstrate that they have filled this test and to demonstrate that any potential adverse third party impacts have been clearly identified and appropriately addressed.

Commitment 4: Local Contact

The fourth commitment I made when I spoke with you last year was that I will visit local communities, listen to local communities and, wherever possible, act in accordance with the interests of local communities.

I can happily say that in addition to the one off meetings I have had with many of you as well as with other industry and community representatives on a range of different issues, I have also undertaken numerous visits and tours of both the southern and northern Basin, listening to your concerns and ideas. 

From St George to Goolwa I have enjoyed the hospitality of many, learned from the wisdom of locals and done my best to ensure that communication between our government and Murray-Darling stakeholders is a true two way street.

It is these one on one and group engagements that help me to put the “reality test” to Government policy and maximises the chance that when it comes out the other end of the process of policy making – especially where this involves negotiations through our rather complicated Parliament at present – we are able to be implementing it in a practical and beneficial way on the ground.

There will always be droughts, but we are working cooperatively towards a scenario where farmers, river systems and our cities and towns are all more resilient when future droughts hit.

Together we are building resilience and adaptability into our water management systems.  We are showing many other nations around the world how to manage a resource shared by multiple jurisdictions and how to tackle water scarcity by changing the way we share water between competing interests, including the environment.

It’s been a full twelve months of actions and decisions to deliver outcomes for the benefit of our Nation’s greatest river system and the communities that rely upon it. Today I recommit myself and the Government to the four commitments that I made last year and that we have focused on delivering: we retain our commitment to water reform and delivery of the Basin Plan; we will maintain a focus across government to strengthening the Murray-Darling Basin as our primary national food bowl; we will continue to give local communities a real say; and I will continue to personally engage with communities as much as humanly possible.

As managers of the Murray-Darling Basin we inherit strong foundations from 100 years ago that are reflected in the Murray-Darling Basin Agreement, the National Water initiative, the Basin Plan, this Murray Darling Association’s 70 year track record of advocacy on behalf of its communities and the Abbott Government’s commitment to real action informed by local engagement.

I am delighted to officially open this, your 70th anniversary Conference, and I look forward to continuing to work with all jurisdictions, local governments, industries and communities that have a role in the sustainable management of our water resources.  And if the ever changing program permits I will very much welcome the opportunity to take some questions and have some engagement will all of you today.  It’s my regret that I can’t spend longer with you today and I can’t spend longer in Tumut today, unfortunately it’s a day where I have started in Sydney and have to be here in Tumut and will finish the day in Moree, so there’s a little bit of ground to cover.  But I do wish you all the success at the conference and hope to have some questions and some engagement from here.

Thank you very much.