NSW leaving the Basin Plan now would mean more buy-backs instead of $1 billion investment in infrastructure projects.

The Basin Plan has damaged irrigation communities, but now, scrapping the Basin Plan would make matters so much worse. With the hurt that a suite of reforms has had on irrigation communities, it is no wonder why people are calling for big change. But – we need to be very careful what we wish for.

  • Leaving the Basin Plan means less water – through buybacks

Withdrawing from the Basin Plan means the Federal Government would be required to buy-back additional water – another 20%. We cannot afford to forgo any more water.

  • Leaving the Basin Plan would not mean any more water

Abolishing the Basin Plan would not change how water is shared between the states. That is because those arrangements are not in the Basin Plan – they go much further back to earlier agreements (e.g. the Murray-Darling Basin Agreement). It is also separate to state water allocation policies.

  • Abolishing the Basin Plan would not change the water market

The water market also predates the Basin Plan, and is separate to it, so abolishing the Basin Plan would not fix the critical issues with the water market. Water prices would remain high, trends of water demand would continue, and market operations would continue.

  • An Inspector-General with investigative powers akin to a Royal Commission is good news

This statutory position will be critical to building integrity to water management. It is also much more informative and valuable then a one-off review. From our discussions so far, we have confidence in the Commissioner.

  • The Basin Plan is pretty much complete, in terms of the impact to farmers.

Water recovery is complete in nearly every valley. The irrigation industry has done our fair share, now the remainder of the lifting is up to the NSW Government through implementing projects.

Perhaps the greatest risk in terms of the Basin Plan now (apart from withdrawing), is if the Sustainable Diversion Limit Adjustment Mechanism (SDLAM) stalls. The risk is, that government would then have to go back into the agricultural water bucket and buy-back more water. There remains a problem that the projects have been so poorly developed that communities lack confidence and support – we need flexibility to get these done right for local communities.

  • Abolishing the Basin Plan would not fix the supply issue – drought.

It is devastating timing that the worst drought on record has coincided with one of the largest water reforms in our history – meaning the lack of water, and removal of water, have come as one big hit. However, getting rid of the Basin Plan now would not reverse this damage, nor would it fix the supply issue (lack of rain and inflows).

People say, “it is not just the drought”, and they are right there, but it is one mighty big part of the problem. With less than 1% of typical inflows coming into the system there becomes an issue. Water management becomes difficult when there’s not much water to manage.

  • Abolishing the Basin Plan would likely lead to another centrepiece reform

With high public interest in the Murray-Darling Basin, it is unfathomable to think that if the Basin Plan was abolished, there wouldn’t be a round 2. In the current era, what would Basin Plan 2 look like?

 

So, where does that position us?

Earlier this month, NSWIC passed a policy motion on the Basin Plan with unanimous support.

The motion acknowledged that NSWIC historically (pre 2012) opposed the Basin Plan, but since it has become implemented as law (post 2012), NSWIC works to ensure optimal implementation of the key individual elements for the sector.

It is the policy position of NSWIC that future implementation of the Basin Plan must involve no additional water recovery through buy-backs, recognition that the remaining elements of the Plan present significant challenges and require increased flexibility in implementation, and greater adaptive management that acknowledges the issues facing the irrigation sector and communities.

The situation is far from good, and there are many areas that require vast improvement in the implementation of the Basin Plan – such as what has already been provided in a thorough review of the implementation of the Basin Plan by the Productivity Commission. That is our pathway forward to better outcomes.

For that reason, and after thoroughly assessing all possible options, NSWIC cannot possibly support any action that would place our sector at such monumental risk of a further loss of water.

 

So, what are we doing about it? 

NSWIC asks Basin Governments to work towards a Better Plan that truly gets better outcomes for these people and helps stop the economic depression that faces communities. 

NSWIC has continued to work on advocating for better water policy that achieves real outcomes for our communities. You can see our Action Statement on our website.  

This is all about getting water to our farmers so they can grow food and crops for the benefit of all Australians, and keep pressure off the costs of living of Australian families.  

See our website for more information on how NSWIC is working towards a Better Plan. [HERE]

By Steve Whan – CEO of National Irrigators’ Council (NIC)

With most farmers in NSW on zero allocation and many in Victoria and NSW unable to afford prices for temporary allocation, it is entirely understandable that we are seeing a significant amount of frustration, anger and many people are looking to find a solution. 

I understand that’s why some people think that the answer is to ditch the Basin Plan. 

“Scrapping” the Basin Plan would not stop the impacts of drought. But it is important to think through what that would mean. 

Inter-governmental agreements that pre-date the Basin Plan (and are separate) govern how water is shared between the States, so ‘scrapping’ the Plan would not change how much was allocated to NSW, Victoria or South Australia. Not one more drop of water would be available. 

The Water Market is also separate to the Basin Plan, so ‘scrapping’ the Plan would not return water to anyone who sold entitlement or has not received an allocation.  It would do nothing to reduce the very high price for allocation, address the operation of the market or the movement of allocations.

Environmental Water ‘owned’ in exactly the same way as irrigators own their entitlement so getting rid of the Plan would not mean environmental water returned to the consumptive pool. 

The question that needs to be answered by advocates of scrapping the plan is what would it be replaced with? Is it realistic to think that some iteration of a new plan would include less than the current Plan requires for the environment? 

There is no scenario in which there is a majority in the Parliament for a Plan that requires less water for the environment.  Some loud voices seem to think that individual MPs can achieve these results, forgetting that any change has to get a majority of all members of the House of Representatives and the Senate. 

And we have to be realistic about that.  It’s unlikely a change like that would even get through the Liberal Party room, let alone a Senate where Labor, Greens and just South Australian cross-bench command a majority. 

There are some real challenges remaining with the Basin Plan implementation.  We need to work to overcome them – but we won’t do that with slogans.

The supply projects that make up the 605GL of Sustainable Diversion Limit Adjustment Measures are a key one. 

The real danger of our current situation is that these measures may not be successfully put in place by the State Governments. 

If they are not, the Basin Plan legislation makes it very clear that the Federal Government can go back in and buyback the 605GL.  Most of that would come from the Murray, Murrumbidgee and Goulburn. 

Minister Littleproud has been criticised for pointing this challenge out, he has been accused of threatening communities.  The fact is the ‘threat’ was very deliberately put into the legislation in 2012 and even if he wanted to, the Minister can’t just make it disappear. 

He could take the easy option of saying what people want to hear, of making promises he knows he can’t keep.  But that’s not leadership.  Leadership means telling people a tough truth rather than going for easy populism. 

NIC knows that a failure to achieve the supply projects is a threat to irrigation, it’s a threat with a potential billion dollar negative impact on Murray and Murrumbidgee communities.  We have, a number of times, pointed out how wrong it is to have the cost of failure resting on communities while the responsibility for implementation rests with Government. 

No matter how you look at it, it is a threat and the only way to remove it is to make sure the 605 projects (or equivalent) are implemented.  That’s why we have been urging State Government’s to accelerate their activity, accept their responsibility and ensure maximum flexibility on the projects.

We do have a way forward on some of these really difficult issues, it is via the recommendations of the Productivity Commission’s five-year review.  The review pointed out how difficult it was going to be to deliver the supply measures by 2024 and it questioned whether the 450GL efficiency measures could be delivered (given system constraints); it also called for a reassessment of the salt export objective (linked to how much water flows out the Murray mouth). 

It and several other reports talked about the importance of complimentary measures as well. 

So far Government’s have been somewhat half-hearted in their response to the Productivity Commission. NIC and National Farmers have called for more action and this is real opportunity to improve the implementation of the Basin Plan and address some of the Plan related issues that are causing problems. 

In my view anyone really concerned about the future of irrigation communities would direct their efforts at lobbying hard to make sure we use the opportunity provided by the Productivity Commission recommendations to get changes to the way remaining elements of the Plan will be implemented to ensure they are realistic, deliverable and produce good outcomes all round.

Finally, like so many of us I have been thinking a lot about the bush fire victims and the volunteers over the last couple of weeks.  It is often hard to know how to help but as a regular donor to the Red Cross I decided to give some money via this link [HERE], I know the Salvos also have a fund. 

When I was NSW emergency services Minister, a decade ago, this sort of early simultaneous fire season (i.e. QLD, NSW and even still California) was quite unusual – now with climate change and this terrible drought it seems to be becoming common.  It’s frightening and reminds us all just how grateful we are to the volunteers from the RFS, SES and the welfare groups who are being stretched by these conditions. 

Best wishes and stay safe. 

Visit the National Irrigators’  Council website [HERE].