Commonwealth Water Act 2007

1. Commonwealth Water Act 2007 Implications for the Murray-Darling Catchments

2. Key Provisions • Provides for the preparation, amendment & review of a statutory Basin Plan for whole Basin & catchments to: • Limit amount water to be taken on a sustainable basis ie long term average sustainable diversion limits for Basin & catchments • Identify risks to Basin water resources & strategies to address risks including effects of climate change • Define requirements for accreditation of catchment water resource plans consistent with Basin Plan • Provide for environmental watering plan – environmental objectives, watering priorities & targets • Provide for water quality and salinity management plan & targets • Define rules for trading water rights

3. Key Provisions • Recognises existing water resource plans (and associated ROPs) through transitional arrangements • Commonwealth’s risk sharing & compensation obligations under NWI defined ie Basin plan specifies Commonwealth’s share of reductions to entitlements & reliability as result of: • Changes Commonwealth policies at any time • Improvements in knowledge from January 2015 ie two thirds from 3 to 6% & half above 6% (users bear first 3% & States one third 3 to 6% & half over 6%

4. Key Provisions • Establishes a Murray Darling Basin Authority to: • Prepare Basin Plan for Minister • Advise Minister on accreditation of catchment water resource plans • Develop water rights information for trading • Measure & monitor Basin resources • Gather information/research & engaging community • Authority reports to Commonwealth Minister & has a full time chair and 4 part time members • Authority to be advised by Officials Committee, Community Committee (16 members 8 being water users) latter to have subcommittees – irrigation & environment. Ministerial Committee being considered • Authority can levy fees & charges to recover costs

5. Key Provisions • Establishes Commonwealth Environmental Water Holder to manage environmental water including share of water savings from NPWS • ACCC advises Minister on setting & enforcing regulated water charges to address inconsistent charging. Water charge rules by regulation & have statutory effect in the Basin & model status outside Basin. Regulated water charges include scheme charges, water planning & management charges and externality charges • ACCC to advise Minister on water market rules to facilitate trading across state boundaries • Gives Bureau of Meteorology water information functions • Recognises National Water Commission role in monitoring implementation

6. Key Provisions • Legislation relies solely on Commonwealth powers – trade, environmental, data gathering • Retains mechanism for States to refer powers primarily to allow Commonwealth to operate scheme • Intergovernmental Agreement seeks agreement of States to refer powers in return for: • NPWS funds for off farm efficiency programs • Commonwealth accepting States NWI risks (all states must sign) • Commonwealth accepting State costs for implementing reforms (all states must sign)

7. Significant Changes Negotiated • Changes to Bill were negotiated in the following key areas • Reference to economic and social impacts • Improved definitions of terms important to the implementation of Bill provisions • Preparation of Basin Plan • Accreditation of catchment water resource plans • Allocation of risk for reductions in water availability • Implementation of water charges • Transitional recognition for existing water resource plans

8. Economic and Social Impacts • Objects of the Act and the purposes of the Basin Plan includes provision for the use and management of basin water resources in a way that optimises economic and social outcomes • Content of the Basin Plan to include information about social and economic circumstances of basin communities dependent on Basin water resources

9. Improved definitions • Definition of environmentally sustainable level of take includes ‘productive base of the water resource’ • Long-term average sustainable diversion limits to be defined in the Basin Plan to achieve an environmentally sustainable level of take can be assessed as a quantity, formula or any other way the Authority determines • Definition of ‘planned environmental water’ expanded to encompass rules based environmental water

10. Improved Definitions • Clarification of definition of water access entitlement • Water access entitlement defined in the Act as ‘a perpetual or ongoing entitlement, by or under a law of a State, to exclusive access to a share of the water resources of a water resource plan area’ • Supplementary Explanatory Memorandum to Bill gives examples of an ‘ongoing entitlement’including ‘an entitlement that has no defined expiry date or an entitlement that is granted in accordance with a water resource plan with a defined term, but where there is a right of renewal or an understanding that the entitlement will be renewed under subsequent water resource plans.’

11. Preparation of Basin Plan • To address the differences between the Murray and Darling systems • Not to directly regulate land use or planning in relation to land, management of natural resources other than water or control of pollution • Release of scientific data & other information with draft plan • Extension of consultation period for draft plan • Publication of documents for Minister’s decision re adoption of plan

12. Accrediting Catchment Water Resource Plans • State to submit plans to Authority - Minister to accredit if consistent with Basin Plan & takes effect of legislation • Amendment to Basin Plan can’t affect a water resource plan within its accredited term of 10 years • MDB Authority can’t recommend against accrediting a water resource plan unless Basin State made a submission re issues of concern • Conditions to be met before the Minister requests MDB Authority to ‘step in’ and prepare a water resource plan • Procedures to be followed before the Minister requests MBD Authority to prepare a water resource plan

13. Allocation of risk for reductions in water availability • Recognition of risks arising from reductions in water allocations and to impacts on reliability • Simplification of legislative provisions addressing risk assignment • Commitment in Explanatory Memorandum to implementing measures in NPWS to address over allocation • Clarify inconsistency with NWI re treatment of the risk of policy changes • Clarify inconsistency with NWI re treatment of the risk of knowledge improvements

14. Allocation of risk for reductions in water availability • Water access entitlements may be authorised as well as granted or issued. Payments for these entitlements if reduced or reliability is affected • Minister to determine qualification for and amount to be paid for change in value of entitlement • Process for calculating the amount and appeal rights re Minister’s decision to Administrative Appeals Tribunal. • Regulations to detail procedures and formulae to determine value of entitlements and liability • Acceptance of liabilities for conversion into substitute entitlements compliant with NWI provided no increase in water that can be taken

15. Allocation of risk for reductions in water availability • Minister noted in second reading speech that tax implications of risk management scheme to be addressed in design of scheme – not a matter for Water Act • Transitional & interim water resource plans to be used as the basis for assessing impacts of Basin Plan • Act did not address recognition of expiry of water resource plans before Basin Plan takes effect 2015 – hence no rights to compensation - affects all Qld MD catchment plans

16. Water Charges • ACCC intervention in determining water charges is limited to bulk water charges and exit charges from schemes • Explanatory memorandum and second reading speech recognises the current price paths (eg SunWater 5 year prices) will be allowed to run their course • Schedule to Act outlining NWI objectives and principles made more consistent with NWI ie proportion of water charges attributable to water users, measures other than charges for externalities, efficiency reviews to set prices

17. Transitional Arrangements • Existing water resource plans (before 25 Jan 07) and associated ROPs recognised for their remaining term & taken to be accredited (incl minor or non substantive amendments) • Interim wrps (made after Jan 25 2007) are to take account of advice from MDB Authority and for a term that does not delay Basin Plan implementation from 2015 • Substantive amendments to transitional & interim wrps must be accredited by Minister if the plan amendment is no less consistent with the Basin Plan

18. Where to from here • Release of CSIRO catchment reports • Ongoing negotiations Commonwealth & States re implementing existing legislation and referral of powers & revised legislation • Continue to lobby for: • Governments to pay compensation for all reductions in entitlement and reliability arising from the implementation of the Basin Plan from the date of expiry of every transitional water resource plan that expires before 31 December 2014 • providing just terms compensation (including payments for disruption) for all reductions in entitlement and reliability

19. Where to from here • Unrelenting & close involvement in the preparation of the Basin Plan • Work with DNRW re upgrading of the status of entitlements compliance with definition water access entitlements • Work with DNRW & SunWater re development of programs to access NPWS funding