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Primary Industries and Water – Water Entitlements

Cassy O'Connor MP  -  Wednesday, 7 June 2023

Tags: Water, Primary Industries, State Budget

Ms O'CONNOR - Minister, last year we wrote to you in August about water entitlements and the fees that the state charges water users and it is fair to say that we have the cheapest water in the country which we effectively give away. Van Dairy's allocation for the Whey River is for more than 21 billion litres of water that costs them about $6000 a year and in other states, as we know from the appendixes to the Regulatory Impact Statement, that same allocation would $172 000 in Victoria, $132 000 in South Australia, $96 000 in Queensland and $68 000 in New South Wales. Your response talked about a review that was part of the implementation plan for the Rural Water Use Strategy. Can you update the committee on what steps you will be taking as minister to stop a system which effectively gives away some of the best water in the country?

Ms PALMER - I am pleased to provide the house with some further information. I will make some statements and then I will pass to the acting Secretary. The current water licence fee structure was introduced in January 2000 following the proclamation of the Water Management Act 1999. The department has undertaken three public reviews of water licence fees in 2003, 2005 and 2020. The fees prescribed in the current Water Management Regulations 2019 include water licence fees plus a range of miscellaneous fees. For example, application fees, fees for obtaining copies of documents and fees to register particular notifications, as well as rebates for small licences. Water licence fees are payable for water taken under the authority of the water licence issued under part 6 of the act. There are numerous actions in the Rural Water Use Strategy to deliver better water management outcomes that are likely to inform any review of water licence fees that may be undertaken. In addition, the national water policy reform agenda and revision of the National Water Initiative may also have implications for the broader water pricing policy framework.

Ms O'CONNOR - Does that mean that in almost a year since you have responded to my letter there has been no movement on the review or a change in the pricing structure?

Ms PALMER - There has been a huge amount of work done in this space which has been of particular interest to me. For more details I will pass to the acting secretary.

Ms WILSON - It is important when you undertake the reforms you are referring to that it is done in an orderly manner. We are producing some foundational pieces for the Rural Water Use Strategy that are fundamental to understanding what a pricing structure should be, not least, understanding catchment yields with the sites work we are doing, our groundwater assessment project and our review of the water accountability framework. We are also looking at reviewing our general planning framework under the act. The department's advice has been we need to get these foundational pieces right because you will then be doing the review based on a common understanding of current work and risk based water accountability.

Ms O'CONNOR - Thank you. It sounds to me that the Government is enabling and leaving in place a system that drastically undervalues our water. I am surprised that there isn't a commitment to cost recovery for water use. We charge the cheapest rates in the country, by a factor of 10, for our water.

Can you confirm, minister, that there is a move to full cost recovery? What is happening at the moment is that Tasmanian taxpayers are subsidising a multinational corporation like Van Dairy, which we are giving water to for nothing.

Dr BROAD - Come on.

Ms O'CONNOR - You should have a look at some of the comparative charges, Dr Broad It is scandalous –

CHAIR - Order.

Ms O'CONNOR - 21 billion litres for $6000?

Dr BROAD - The same as everybody else; it's not a special deal.

CHAIR - Order.

Ms O'CONNOR - I am not saying it is a special deal.

Dr BROAD - Yes you are.

CHAIR - Order. Thank you, minister, sorry about that.

Ms PALMER - That is fine, we have three hours. A huge amount of work is being done in this space and there is some real progress being made under the Rural Water Use Strategy. That really is our blueprint for managing the state's freshwater resources now and into the future.

As I know you are aware, there are 12 projects and they are exciting and we are delivering on those, we are investing in this space as well to ensure that this work can be done. The deputy secretary did have some comments around your question about cost recovery.

Ms O'CONNOR - It is a policy decision that you make, minister.

Ms WILSON - Whenever we undertake reviews of fees and charges we do so in accordance with Treasury guidelines. When we undertake that assessment, part of what is done is looking at the costs associated with the service but also whether there is a public good. That is undertaken for every regulatory impact statement, and it was done with the last review. That information is available on the public record. But as the minister has indicated, we are doing the foundational work that will inform the future.

Ms O'CONNOR - Thank you, Ms Wilson. Just to be clear, we are not talking about a special deal to Van Dairy but it is emblematic of how dramatically we undersell our water and, therefore, rip off Tasmanian taxpayers. Do you think there is a problem with the Water Management Act that actually makes it cheaper for corporations like Van Dairy when they use more water, the more they use, the more we give away? There is policy decision to be made here about cost recovery for water use.

Ms PALMER - I accept what you are saying but one of the fundamental comments that has been made at the table so far is that we are working hard to have a great framework for the management of water across Tasmania. Any policy decisions that come out of that are well and good. But, first of all, we have to make sure we have the fundamentals right. That is something I have spoken to the department about to ensure that some of those fundamentals that form the basis and framework of water management need to be looked at, need to be put in place. If there are further policy decisions from there, so be it.

Ms O'CONNOR - One final question on this. Isn't it true that the regulatory impact statement found that close to 70 per cent of the benefit of public funds spent on water management goes to private enterprises?

Ms WILSON - That was the review undertaken at the time but the public benefit that comes from water in terms of agriculture, regional jobs and the support that brings to our economy would have been a factor.

Ms O'CONNOR - Is that the metric we are using to give away water?

CHAIR - Ms O'Connor, can you please allow Ms Wilson to finish.

Ms WILSON - The regulatory impact statement is on the record. The decisions that were made at the time and the assessment is available for people to read and make their own assessment.

Ms O'CONNOR - Minister, Tas Irrigation's South-East Irrigation Scheme expansion proposes a major increase in summer irrigation takes. Stakeholders, including scientists, are concerned this goes against previous scientific advice and there doesn't seem to have been an impact assessment. Has NRE Tasmania played or will they play any role in assessing any elements of this proposal, including water allocations and environmental impacts?

Ms PALMER - Thank you very much for that question. I am going to ask Catherine Murdoch, who's the general manager for agriculture and water, to the table.

Ms O'CONNOR - Thank you. It would be good to have a concise answer.

Ms PALMER - We'll do our best.

Ms MURDOCH - In regard to the Greater South East Irrigation Scheme, we are yet to see a final business case for that scheme. It's still in the design process, so the full amount of water for that allocation is yet to be seen. When it does get to that stage, yes, the department does have a role in assessment, but we're not there yet.

Ms O'CONNOR - Through you minister, what assessments or impact assessments do you undertake?

Ms MURDOCH - We run the normal assessments that we do for any project: whether or not water is available, the amount we do, the normal standard process in regard to environmental assessment that we run on every project.

Ms O'CONNOR - I can take it from that that if there are particular scientists, minister, who have an interest and a background in these matters, is it a development application or is it a project? What is this? How does it? How is it established as a thing?

Ms MURDOCH - Once a business. Sorry -

Ms O'CONNOR - I did say through the minister so I think you're okay.

Ms MURDOCH - That's fine. In regard to Tasmanian irrigation projects, it would depend on what the water source is finalised as obviously. Where that water is coming from, I presume that's what we're talking about?

Ms O'CONNOR - Yes.

Ms MURDOCH - The volume of water, what that is, the source of water, and it is assessed as to whether or not water is available and impacts from that if the yield is there.

Ms O'CONNOR - Thank you. So, our understanding, minister, I will just ask one question. You thought I was taking a breath, so you thought you'd pop in.

CHAIR - Order.

Ms O'CONNOR - Minister, we understand Hydro Tasmania will be providing water to the South East Irrigation Scheme from Lake Meadowbank. Can you clarify for us, were Hydro allowed to take this step unilaterally? Has it been made known to NRET and if not, who had the ultimate sign off on the provision of 41 000 million litres of water to this irrigation scheme?

Ms PALMER - Ms O'Connor, I really appreciate these questions. However, my concern is that we're going into the territory of a GBE and we don't have them here at the table. I feel that Ms Murdoch has made the department's role very clear in this and I feel that for any further questioning you, you would need to have Tasmanian Irrigation here at the table.

Ms O'CONNOR - Okay. Thank you, minister. I would have thought and particularly given Ms Murdoch's answer before that, NRET had a central role in assessing impacts here and whether or not Lake Meadowbank had the capacity to download 41 000 million litres of water into the irrigation scheme. If the verdict here is today, that because Tasmanian Irrigation is not at the table, so we can't ask any questions about irrigation, that's highly unusual and a little bit irregular.

Ms PALMER - I'll just say, regarding the business case, we're in that period now of that body of work, so we can't pre-empt that. Ms Murdoch has made it very clear what that process is and what the department's involvement is. As I have said, you're going into that territory of a GBE. We don't have that expertise at the table. Ms Murdoch's done a very good job setting out the department's involvement here.

Ms O'CONNOR - Good on you, minister. I thought it was a bit thin, but that's not on Ms Murdoch. We understand, minister, the operation of the Government's planned irrigation schemes rest primarily, as you've said, with Tas Irrigation, which is a GBE. But it is the responsibility of NRE Tas to monitor and oversee and hopefully improve the health of Tasmania's rivers. Has the department undertaken any work to understand the potential impact that anyone of these very large scale irrigation schemes will have on river flows or the environment?

Ms PALMER - I'll seek some advice.

Ms MURDOCH - Through the minister, in regard to the existing schemes that are in operation, depending on water source for those, environmental flow assessments are done where water is taken out of natural water bodies for instance. My water resources team will review those environmental flows and sustainable catchment yields to ensure we can actually grant that water volume, so that is completely done.

Ms O'CONNOR - Can I just include, what about tranche 3 schemes?

Ms MURDOCH - In regards to tranche 3 schemes, if any of those were to be run of river schemes they would need to demonstrate environmental flows as per that process.

Ms O'CONNOR - So Tas Irrigation has to demonstrate that?

CHAIR - Ms O'Connor, can you just -

Ms O'CONNOR - I am just seeking clarity in a conversation.

Ms PALMER - That's right, because it's not a conversation, it's a question and answer.

Ms O'CONNOR - It is a conversation actually, minister.

Ms PALMER - Chair, I do think respect should be shown -

Ms O'CONNOR - It is not disrespect -

CHAIR - I agree with you, minister.

Ms MURDOCH - In regard to tranche 3, all schemes are the same. If any of those schemes were to be taking water direct from a waterway, we would need to be sure that appropriate environmental water was there, sustainable yields were there to enable any allocation to be granted. If it's a dam for storage; to determine if there's any E-flows going through that dam, released from those dams, daily releases captured; all of those things, environmental footprint of that dam, to make sure threatened species and all of those things are also considered. That is part of the department's assessment.