FAQ - National Plan for Water Security

John Turnbull, Federal Minister for Water and the Environment, toured the North East on the 4th April to explain the national water policy and to get feedback from the stakeholders.

As part of that tour, Sophie Mirabella sponsored a public meeting at the Wangaratta Memorial Town Hall. Around 300 people attended the public meeting with Mr Turnbull receiving some spirited questioning from the audience. Below is Mr Turnbull's handout answering common questions.

A NATIONAL PLAN FOR WATER SECURITY KEY QUESTIONS AND ANSWERS
Reforming Management of the Murray-Darling Basin

1. Geographical scope of the proposed arrangements.
The proposed arrangements apply to the Murray-Darling Basin. This includes both surface and groundwater in the Basin. In the case of the Great Artesian Basin, which intersects with the MDB footprint, appropriate interfaces for management would need to be developed (ie. the Commonwealth is not seeking management responsibility for the GAB).

2. How will this be done?
We are seeking a clear referral of powers, captured in legislation. How the powers are exercised will be detailed either in legislation or in a Memorandum of Understanding. We intend to have legislation introduced into the Commonwealth Parliament during the May session this year.

3. What is the timing of preparing the basin-wide strategic plan for water?
The strategic plan would developed by end 2008, and will involve wide consultation. Sensible transitional arrangements will be needed before all of the proposed new arrangements are in place.

4. How can States be guaranteed that their current water shares under the MDB Agreement willnot be compromised?
The Commonwealth will honour the existing state shares under the MDB Agreement. There will not be any changes without the unanimous agreement of the basin States and the ACT. As with current arrangements, the volumes of these shares will be influenced over time by improved environmental flows and trade.

5. Will the Commonwealth be taking over ownership of water?
No. Water is and will remain vested in the crown in right of particular states.

6. Will the Commonwealth recognise existing water entitlements?
Yes. The Commonwealth will not be changing any arrangements under the current Water Sharing Plans and will not be reducing the security of any water entitlements.

7. Will the seasonal allocation process remain as is for each State?
The Australian Government is not looking to change the water entitlement products that already exist, but allocations would take into account the improved efficiency of operating the Basin as a single system through the new MDB Authority.
Allocation assessments will be driven off existing water plans and would recognise the ongoing accounting processes relevant to each jurisdiction - the methodology would remain the same.

8. Is the Commonwealth seeking to privatise irrigation organisations (eg. in Victoria)?

No. Nor will the Commonwealth be forcing NSW irrigation corporations to demutualise.

9. Will the Commonwealth be stopping water from being used to grow cotton or rice?
No. We are not in the business of picking winners. The market will operate and individuals will make their own business decisions.

10. The proposed arrangements for funding of the operational and maintenance aspects of theBasin. Funding of the operational aspects of the Basin will be through cost recovery charges to users similar to current arrangements.

11. The arrangements for ownership and Commonwealth use/leasing of infrastructure, includingfor storage of any environmental water the Commonwealth proposes to hold.
States will retain ownership of the infrastructure. The Commonwealth will operate and maintain storages and river flow control works. Entitlements held by the Australian Government will face the standard charges for those entitlement types.

12. Will water charges rise as the result of the Commonwealth taking over?
The Commonwealth Plan presents significant opportunities to streamline the running of Australia's irrigation systems, including trading arrangements. Pricing of water will need to reflect the principles already agreed under the National Water Initiative.

13. Will speculators be prevented from entering the water trade market to obtain profit simply fromthe trade and not the use of water?
The Australian Government does not support limiting who may own water entitlements. Speculators can be a useful market participant as they may develop intermediary products that manage risk for other market participants.

14. Will water trading system take into account social and economic impacts of water transfers?
Water entitlement holders should not be arbitrarily constrained in how they use their capital in the market. Subject to the principles outlined in the National Water Initiative, trade is a choice for individuals. The National Water Commission is required to monitoring the impacts of water trade.

Modernising Australia's Irrigation Infrastructure

15. Will other existing Commonwealth funds (such as the Australian Government Water Fund, Natural Heritage Trust and National Action Plan on Salinity and Water Quality) be diverted to implement the National Plan for Water Security?
No. The new Plan will be funded with new money. Existing programmes may need to be refocused to ensure consistency of delivery.

16. What will the Commonwealth do with water it is seeking to hold?
The Commonwealth would set up a new environmental water manager to hold and trade water, with a view to achieving improved environmental outcomes in the Basin. The manager would operate according to a new Basin-wide environmental watering plan (to be developed as part of the Basin-wide strategic plan). This will also provide greater water to rural communities and towns in periods of drought.

17. What are the consultation arrangements for the Plan?
States and the Basin community will be consulted on the preparation of the Basin strategic plan and in the implementation of the irrigation refurbishment programme.

18. When will the new funds be available?
Subject to the referral of powers for water management in the Murray-Darling Basin, the funds are available from 2007-08.

Metering and monitoring

19. Will the Commonwealth seek the input and agreement of States on the new standards?
We intend to work cooperatively as we have to date on the development of metering standards. We have an opportunity to make a break through with getting better information and making proper use of it. The Commonwealth does not want further stalling as we've seen in the Murray-Darling Basin Commission in recent years. While there will be fulsome consultation, the Commonwealth will take decisions in the national interest and we are backing that with unprecedented resources.

20. Will the Commonwealth fund implementation of the standards?
The Prime Minister's statement on 25 January 2007 provides details on the implementation of metering and monitoring standards. There are substantial resources potentially available. The Australian Government holds the view that water needs to be measured to be able to be managed effectively.

Addressing Over-allocation in the Murray-Darling Basin

21. Which systems are over-allocated?
The CSIRO sustainable yield project and further analysis will help develop a new sustainable cap on diversion and extraction from surface and ground water systems in the Basin. This will enable us to bring over-allocated systems back into balance and protect the entitlements of irrigators and the health of rivers and provide a level of security not previously available.

22. How will the new Basin cap be implemented?
It is expected that the new Basin water plan, including a new sustainable cap on diversions, will be in place by end 2008. However compliance with the new cap will not be mandatory within particular valleys until the individual valley plans are reviewed in line with their existing review timelines. In the intervening period, the Australian Government will seek to implement the cap within each valley through the water savings and water purchases provided for under the National Plan for Water Security.

23. How will over allocation be addressed so as to not cause distortion in the water market?
The extent and location of possible voluntary buy backs will be determined by our work on a sustainable cap and the achievement of system delivery efficiencies. Water entitlements will be acquired through voluntary buy backs from these areas and adjustment assistance will be available to exit the market or move to new enterprises.

24. Will the Commonwealth indemnify irrigators for any impact on water entitlements and/or lossof production caused by new Commonwealth allocations/management arrangements.
Dealing with over-allocation and establishing a sustainable cap and trading regime will provide a level of security not previously available. The Commonwealth will also provide up to $3 billion for buying back entitlements and assisting irrigators in unviable or inefficient parts of schemes to exit the industry.

New Investments in Water Information

25. Why is the Commonwealth proposing the Bureau of Meteorology hold water information?
The Bureau of Meteorology is a Commonwealth agency that has extensive experience and expertise in managing large volumes of data and importantly in data analysis and modelling complex systems.
Through investments in improved telemetry and data automation the Bureau will collate water data to provide complex scheduling and forecasting information to ensure that the management of water systems is optimised. The Bureau will also provide real time information relevant to paddock scale decision to help irrigators with water scheduling to meet crop requirements.

26. How will the Bureau ensure that data is adequate for river operations and water systemmanagement?
The Commonwealth will invest $480 million to transform the coverage, quality and utility of Australia's water information base. Provision of water data will be compulsory and will have to meet standards set by the Bureau. States will be required to continue to maintain their measurement systems (and the expanded measurement systems beyond 2012).