(Debate, 12 August 2014, Legislative Assembly, NSW Parliament)

I cannot support the Water Management Amendment Bill in its current form. I share community concern that this bill could further damage our vital rivers and the wetlands that depend on their floodplain ecosystems. This issue is important to all New South Wales' residents. Our rivers and wetlands are vital to our food production, water supply, water quality, biodiversity and climate and they must be protected.

The bill provides a framework for floodplain harvesting licences, creating a new right for the diversion and capture of water flowing across a floodplain. Our dismal failure to regulate such activities in the past has resulted in illegal works and additional licensing and compliance monitoring resources will be needed to ensure unreported changes to works and other on-farm infrastructure to delay or redirect overland flows do not erode the interests of valid licence holders and the environment. This is especially important given floodplain harvesting licences will have complex arrangements and compliance will focus on metering water put into storage, not the total volume being diverted from its natural course.

Illegal works will be grandfathered into the system, essentially allowing the transfer of water access from floodplain graziers, the environment, and downstream towns and industries to the owners of current illegal floodplain works who have pushed up embankments to form shallow and often highly inefficient storages over the past 20 years. Only those works that were in place in the mid-1990s when the Murray-Darling Basin Ministerial Council cap was implemented should be grandfathered into the system. The Floodplain Harvesting Policy outlines a process for assessing existing floodplain works before providing retrospective approval. The bill should implement this process. Grandfathering all works into the system will only reward illegal and often shallow, inefficient works; reduce the water available to existing users and environments through which the water traverses; and limit future opportunities to restore river flows and floodplain health.

Under the bill, floodplain harvesting licence holders will be eligible for compensation if their flood-flow water allocations are reduced, with no clear basis on how to measure interests and values. The bill would also give supplementary water access licence holders access to compensation if licences are cancelled, allocations are changed inconsistent with the underlying water sharing plan, or future access is reduced to support additional environmental flows. The plan rules include express provisions to reduce supplementary water access to account for growth in use by higher priority users and licence holders, and that these reductions will not be compensable.

I cannot support compensation for supplementary water access licence changes because it locks future Governments into existing plan provisions and reduces the flexibility to accommodate changing circumstances. Supplementary water access licences arose from unlicensed "off allocation" diversions by licensed irrigators, following the implementation of licence embargoes and the cap on development, to ensure that all available water was used economically. When they were issued in 2004, holders were put on notice that access was temporary and would be forfeited if initial environmental allocations were insufficient. Indeed, they will continue to be reduced under the proposed arrangements, potentially to the point of no allocation. Why would the Government offer compensation in such a situation? This will forever lock in the interests of holders over and above ownership of water by the Crown.

The bill will see future allocation decisions based on wishful thinking instead of the best available information on climate, which will simply result in transferring water allocations from high-security licence holders to general security licence holders. High-security holders could seek compensation for a reduction in the most valuable drought allocations that they receive. Allocation announcements for general security are based on existing storage volumes and anticipated inflows based on hydrological modelling that reflects historical climatic conditions. The amendments would freeze the modelling at the commencement of a plan and ignore new climate knowledge.

During the record Millennium Drought, when allocations were made in excess of availability, high-security licence holders suffered reduced allocations, and environmental water provisions had to be suspended. The drought saw the unit value of market water increase by 20 times. Who will compensate high-security licence holders for this transfer of water and wealth? While high-security holders received an excessive allocation throughout the generous volumetric conversions undertaken last century, we should avoid making concessions to small groups of general security licence holders without evidence of benefit. Water sharing plans and allocations should be based on the best available information on climate.

This Government has a poor water management record, which has seen increased pumping by irrigators in the Barwon-Darling water sharing plan, demands to reduce the amount of environmental water purchased in the Murray-Darling Basin, increases in the amount of groundwater that can be extracted by mining and gas projects, and exemptions for the mining industry from rules that protect the environment and other water users. If only the Government's conservative attitude to budgets could be extended to conserving fresh water, which is vital to life and at constant risk of diminishing. I cannot support the bill.