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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
WATER AMENDMENT (REVIEW IMPLEMENTATION AND OTHER
MEASURES) BILL 2015
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Agriculture and Water Resources
the Hon. Barnaby Joyce MP)
WATER AMENDMENT (REVIEW IMPLEMENTATION AND OTHER
MEASURES) BILL 2015
GENERAL OUTLINE
The Water Amendment (Review Implementation and Other Measures) Bill 2015 (the Bill)
makes the legislative amendments required to implement the Government's response to the
Report of the Independent Review of the Water Act 2007 (the Water Act Review). The Bill
also makes a number of minor or technical amendments unrelated to the Water Act Review.
Specifically, the Bill includes provisions to:
provide for five-yearly reviews of the social and economic impacts of the Basin Plan 2012
(the Basin Plan) and streamline and postpone some Basin Plan reviews;
clarify arrangements for accreditation of first generation state water resource plans
(expected by 1 July 2019) and provide for future accreditation to be linked to Basin Plan
review outcomes;
provide increased flexibility for the Commonwealth Environmental Water Holder to trade
by allowing investment in other non-water environmental activities and in circumstances
where water allocations may be reduced or foregone in continuous accounting water
systems;
provide for greater incorporation of Indigenous expertise and knowledge in the
governance of the Basin's water resources;
repeal Part 5 of the Water Act, removing the power for the Murray-Darling Basin
Authority (the Authority) to establish a Water Rights Information Service, which was
never utilised;
make clarifying amendments to definitions relating to irrigation operators;
allow the water charge rules to provide that the Australian Competition and Consumer
Commission (ACCC) can extend the period of effect of a determination or approval of
regulated water charges; and
make minor administrative and technical amendments.
Background
The Water Act 2007 (the Water Act) provides the legislative framework for managing
Australia's largest water resource - the Murray-Darling Basin (the Basin) - in the national
interest, as well as for providing information on Australia's water resources.
The Water Act Review was prepared by an eminent panel of experts chaired by
Mr Eamonn Moran PSM QC and was developed following extensive consultation with all
state and territory governments and interested stakeholders. The report made
23 recommendations to amend the Water Act and to amend or review its subordinate
instruments, in ways that improve its effective operation. The review report was tabled out of
session in the Parliament on 19 December 2014. The Government's response accepts all
recommendations made in the Water Act Review, with two recommendations agreed in part
(recommendation 9 and 21). The Bill makes the legislative amendments that are required to
implement the Government's response to the Water Act Review's recommendations.
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Consultation
All Basin States (Queensland, New South Wales, the Australian Capital Territory, Victoria
and South Australia), key industry groups, environmental organisations, and Basin
Indigenous groups have been consulted on an exposure draft of the Bill.
All amendments to provisions that rely on referrals of Basin State legislative power have
been approved by referring Basin States (Queensland, Victoria, New South Wales and South
Australia). This is required under the Agreement on Murray-Darling Basin Reform of 2008.
Financial Impact Statement
Nil. The Bill does not appropriate funds. All new measures are being implemented within
existing resourcing of relevant portfolios and within existing Environmental Water Holdings
Special Account (the Special Account) arrangements.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Water Amendment (Review Implementation and Other Measures) Bill 2015
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Water Amendment (Review Implementation and Other Measures) Bill 2015 (the Bill)
makes the legislative amendments required to implement the Government's response to the
Report of the Independent Review of the Water Act 2007 (the Water Act Review). The Bill
also makes a number of administrative or technical amendments unrelated to the Water Act
Review.
Human rights implications
The Bill engages the right to an adequate standard of living, including food, water and
housing, and the right to enjoy and benefit from culture.
The Bill engages the right to an adequate standard of living and the right to health in the
International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to an
adequate standard of living is protected in Article 11 of the ICESCR and the right to physical
and mental health is protected in Article 12 of the ICESCR. The Committee on Economic,
Social and Cultural Rights, established to oversee the implementation of the ICESCR, has
interpreted these articles as including a human right to water, which encompasses an
entitlement to "sufficient, safe, acceptable, physically accessible and affordable water for
personal and domestic uses".
The human rights implications of this Bill in relation to the right to an adequate standard of
living must be considered in the context of the Water Act 2007 (the Water Act). The overall
framework of the Water Act supports access to sufficient, safe, acceptable and physically
accessible water for personal and domestic uses. This is reflected in the Water Act by
section 20, which sets out the purpose of the Basin Plan and is supported through subsection
22(1), which sets out the specific content required to be included in the Basin Plan 2012 (the
Basin Plan), such as a water quality and salinity management plan (see Chapter 9 of the Basin
Plan). Also, paragraph 86A(1)(a) requires that the Basin Plan be prepared having regard to
the fact that the Commonwealth and the Basin States have agreed that critical human water
needs are the highest priority water use for communities who are dependent on Basin water
resources.
The Bill also engages the right to enjoy and benefit from culture in article 15 of the ICESCR
and article 27 of the International Covenant on Civil and Political Rights. The UN Human
Rights Committee has said that culture may include the use of land resources, including
traditional activities such as hunting or fishing.
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The Bill gives effect to the Government's response to recommendation 1 of the Water Act
Review. Recommendation 1 recommends that the Water Act be amended to include a new
section that reflects existing water resource plan requirements in the Basin Plan dealing with
Indigenous values and uses (Part 14 of Chapter 10 of the Basin Plan 2012).
The Bill supports the right to enjoy and benefit from culture by requiring that the Basin Plan
must include requirements relevant to having regard to the social, spiritual and cultural
matters relevant to Indigenous Australians (item 22 of Schedule 1). This amendment
acknowledges existing water resource plan requirements in the Basin Plan (see Part 14 of
Chapter 10 of the Basin Plan 2012). Additionally, the Bill introduces new requirements for
the Murray-Darling Basin Authority to engage with the Indigenous community about the use
of water resources in the Basin and to include Indigenous persons on the Basin Community
Committee (items 23-25 of Schedule 1).
Conclusion
The Bill is compatible with human rights because it promotes the protection of human rights.
The Hon. Barnaby Joyce MP, Minister for Agriculture and Water Resources
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WATER AMENDMENT (REVIEW IMPLEMENTATION AND OTHER
MEASURES) BILL 2015
NOTES ON ITEMS
Clause 1 Short Title
1. Clause 1 is a formal provision specifying that the Act may be cited as the Water
Amendment (Review Implementation and Other Measures) Act 2015.
Clause 2 Commencement
2. Clause 2 provides for the commencement of the Act:
sections 1-3 commence on the day that the Act receives the Royal Assent;
item 1 of Schedule 1 commences on 1 January 2020, to allow time for the Basin Plan
to be amended to incorporate the required changes;
items 2 to 9 of Schedule 1; Parts 2 to 6 of Schedule 1; and Part 3 of Schedule 2
commence the day after the Act receives the Royal Assent;
Part 1 of Schedule 2 commences immediately after the commencement of Schedule 1
to the Water Amendment Act 2008 (Water Amendment Act); and
Part 2 of Schedule 2 commences when Schedule 1 to the Acts and Instruments
(Framework Reform) Act 2015 commences, or on the day after the Act receives the
Royal Assent, whichever is later.
Clause 3 Schedules
3. Clause 3 provides that legislation specified in a schedule to this Act is amended or
repealed as set out in the applicable items of the schedule concerned and that any other
item in a schedule to this Act has effect according to its terms.
Schedule 1--Amendments arising from review of the Water Act 2007
Part 1--Reviews and reporting requirements
Water Act 2007
Item 1 Subsection 22(1) (at the end of the cell at table item 13, column headed
"Specific requirements")
4. This item amends item 13 of subsection 22(1) to add a new specific requirement to the
program for monitoring and evaluating the effectiveness of the Basin Plan.
The amendment provides that, in addition to five-yearly reviews of the water quality and
salinity targets in the water quality and salinity management plan, and the environmental
watering plan, the program will also include a five-yearly review of the social and
economic impacts of the Basin Plan.
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5. The amendment further specifies that the program must provide for the first of each of
these reviews to be completed before the end of 2020. This will require consequential
amendments to the program for monitoring and evaluating the effectiveness of the Basin
Plan (Chapter 13 of the Basin Plan 2012) to include the new requirement for five-yearly
reviews of the social and economic impacts, and to delay the timing of existing reviews
of the water quality salinity management plan targets and environmental watering plan to
2020. Currently these existing reviews are required to be completed every five years
after the commencement of the Basin Plan (that is, from 2017 onwards).
6. This item gives effect to the Government's response to recommendation 2 of the Water
Act Review.
Item 2 Subsection 49A(1)
7. This item repeals existing subsection 49A(1) and substitutes a new subsection providing
that the Authority must provide advice to the Murray-Darling Basin Ministerial Council
on the impacts of the Basin Plan before the end of 2020.
8. Item 2 gives effect to the Government's response to recommendation 4(b)(i) of the
Water Act Review by postponing the timing of this advice from 2017 to 2020.
This change is part of a broader alignment of Basin Plan reviews and evaluations aimed
at ensuring reviews are conducted, and advice provided, at a time when Basin Plan
outcomes can be more fully assessed, noting the commencement of sustainable diversion
limits on 1 July 2019.
Item 3 Paragraph 50(1)(a)
9. Item 3 specifies that the first of the regular 10-yearly reviews of the Basin Plan should
take place during 2026 instead of during the tenth year of the period that starts when the
Basin Plan first takes effect (that is, in 2022).
Item 4 At the end of Section 50
10. Item 4 inserts a new subsection 50(6) which provides that the review requirements in
subsection 50(5) must be complied with before the end of the year during which the
review is conducted. For example, for the first 10-yearly review conducted during 2026
(see item 3) the Authority must prepare a report of the review, provide copies of the
report to the Commonwealth Minister and the relevant State Minister for each Basin
State and publish the report before the end of 2026. Subsequent 10-yearly reviews must
also be completed and published before the end of the year in which they are conducted.
11. Items 3 and 4 implement the Government's response to recommendation 4(a) of the
Water Act Review. Reviewing the Basin Plan in 2026 ensures that the review is
undertaken at a time when outcomes can be assessed given the commencement of
sustainable diversion limits on 1 July 2019.
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Item 5 At the end of Division 1 of Part 2
12. This item inserts a new Subdivision H to Division 1 of Part 2 of the Water Act.
Subdivision H sets out the requirements for the annual analysis of the Basin Plan's
effectiveness (an "annual effectiveness report") at new section 52A. These requirements
include that the Authority must conduct an analysis of the Basin Plan's effectiveness
after the end of each financial year and provide a written copy of the annual
effectiveness report to the Minister within six months of the end of the financial year.
The annual effectiveness report must then be tabled in each House of the Parliament
within 15 sitting days and a copy must be given to each member of the Murray-Darling
Basin Ministerial Council.
13. The item gives effect to the Government's response to recommendation 22 of the Water
Act Review by separating the preparation and delivery of the annual effectiveness report
by the Authority from the Authority's annual report. This ensures that there is sufficient
time for the Authority to collate relevant Basin State information that, pursuant to
section 71 of the Water Act, must be provided within four months of the end of a water
accounting period. Section 3.08 of the Basin Plan specifies that a water accounting
period is a financial year.
14. Taking the 2018-19 annual effectiveness report as an example, the Authority would
receive Basin State information by 31 October 2019, collate the report and provide it to
the Minister by 31 December 2019. The Minister would then table the report within
15 sitting days of its receipt and copies would be provided to members of the Ministerial
Council.
Item 6 Paragraph 214(3)(a)
15. This item repeals paragraph 214(3)(a), which requires that the annual report of the
Authority include an analysis of the effectiveness of the Basin Plan. This paragraph is no
longer required as a result of item 5, which separates the requirement to report on the
effectiveness of the Basin Plan from the Authority's annual report. Together with item 5,
this item gives effect to the Government's response to recommendation 22 of the Water
Act Review.
Item 7 Subsection 253(1)
16. This item reschedules the next review of the Water Act by omitting "2014" and inserting
"2024" as the date of the next review.
17. The item gives effect to the Government's response to recommendation 23 of the Water
Act Review. This change is part of a broader alignment of Basin Plan reviews and
evaluations. A 2024 review of the Water Act will be informed by the five-yearly audit of
the Basin Plan due by 2023 (see Part 3 of the Water Act) and may inform the next Basin
Plan review in 2026 (see items 3 and 4).
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Item 8 Subsection 253(2)
18. This item repeals subsection 253(2) and provides that the terms of reference for the 2024
review of the operation of the Water Act will be determined by the Minister in
consultation with the States (see also item 7 which changes the date of the next review
to 2024). The item gives effect to the Government's response to recommendations 10
and 23 of the Water Act Review.
Item 9 Annual analysis of Basin Plan's effectiveness
19. This item clarifies the application of items 5 and 6 in the first year of its operation and
does not amend the Water Act. Item 9 provides that the amendments relating to the
Authority's annual report and the annual analysis of the Basin Plan's effectiveness apply
either:
in the financial year that ends on or after the commencement of the amendment, or;
if the financial year ends before the commencement of this amendment but the
Authority has not provided the annual report to the Minister, in that financial year.
20. For example, if this amendment commences before the end of the 2015/16 financial
year, the Authority will provide a report of the analysis of the Basin Plan's effectiveness
in 2015/16 to the Minister by the end of December 2016, separately from the 2015/16
annual report. Alternatively, if the amendment commences after the end of the 2015/16
financial year and the annual report of 2015/16 has not yet been given to the Minister,
the Authority will be required to prepare a report of the Basin Plan's effectiveness in
2015/16 and provide it to the Minister by the end of the December 2016, separate from
the 2015/16 annual report.
Part 2--Accrediting water resource plans
Water Act 2007
21. The following items (10-20) align the accreditation cycle of water resource plans with
the 10 yearly cycle of section 50 reviews. These changes are consequential to
recommendation 4(a) of the Water Act Review that recommended that the first
section 50 review of the Basin Plan be postponed to 2026 to ensure that the outcomes of
the implementation of the Basin Plan can be adequately analysed and evaluated.
22. These changes are necessary because, under the current accreditation arrangements, the
2026 review and any subsequent amendments are unlikely to be complete before many
water resource plans require remaking (noting that plans accredited as early as 2016 will
require reaccreditation by 2026).
23. The new arrangements have a number of benefits:
Water resource plans will only need to be remade when there have been changes to
the Basin Plan as a result of a section 50 review. This will reduce the regulatory
burden associated with having to reaccredit water resource plans simply because they
are older than 10 years, even though they remain consistent with the Basin Plan and
relevant for state water management purposes.
10
All water resource plans will be accredited against the same version of the Basin Plan.
This will improve the consistency of water management approaches across the
Murray-Darling Basin.
Changes to the Basin Plan as a result of section 50 reviews will be adopted by all
water resource plans within three years. This means that changes to Basin Plan water
management approaches will be reflected in Basin State water management plans in a
timely manner, consistent with adaptive management principles.
24. The new arrangements also incorporate recommendation 5 of the Water Act Review,
which recommends that the Water Act allow flexibility for Basin States to nominate a
more recent version of the Basin Plan to be used when accrediting a water resource plan
other than that specified in section 56.
Item 10 Subsection 4(1)
25. This subsection inserts new definitions to assist with the operation of new subsection
48(8) (see item 11) by defining what "affects water resource plan accreditations" and
"notifiable instrument" mean. Together, these new terms clarify the process the Minister
needs to observe following a section 50 review, and subsequent amendment of the Basin
Plan.
Item 11 At the end of section 48
26. This new subsection compels the Minister to provide notification that an amendment to
the Basin Plan affects water resource plans if the amendment has been prepared by the
Authority as a result of a section 50 review of the Basin Plan. The notification must be
made by "notifiable instrument", as defined in new subsection 4(1) (see item 10).
The making of a notifiable instrument ensures that it is clear that an amendment has been
made as a result of a section 50 review and will cause all water resource plan
accreditations to expire after a period of three years. This item also includes a note
clarifying that existing water resource plans will generally cease to have effect three
years after the Minister has issued a notifiable instrument determining that an
amendment "affects water resource plan accreditations".
Item 12 Section 52 (note)
27. This item amends the heading of the note following section 52 to provide for the
insertion of a new note.
Item 13 At the end of section 52
28. This new note clarifies that an amendment made to the Basin Plan as a result of a review
of the Basin Plan under section 50 will be an amendment that "affects water resource
plan accreditations". It also clarifies that, generally, existing water resource plans will
cease to have effect three years after the Minister has issued a notifiable instrument
determining that an amendment "affects water resource plan accreditations".
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Item 14 Before subsection 56(1)
29. This item inserts the subtitle "Matters to which Authority and Minister are to have
regard". This clarifies the purpose of subsection 56(1) in relation to the other subsections
of revised section 56. This is necessary due to the increased length and detail of revised
section 56.
Item 15 Subsection 56(2)
30. This item repeals subsection 56(2) and replaces it with new subsections 56(2) and (2A).
31. New subsection 56(2) clarifies that, subject to subsection 56(2A), the version of the
Basin Plan to be applied by the Authority and the Minister when accrediting and making
water resource plans is the Basin Plan in effect when the plan is accredited or made.
32. New subsection 56(2A) sets out four specific scenarios and specifies which version of
the Basin Plan is to apply in each case. These scenarios are described in the table below.
33. The arrangements applying in the each of these scenarios recognise that water resource
plans take a period of time to prepare and the Basin Plan may change during that time.
Specifying a version of the Basin Plan that will apply in these scenarios provides
certainty for Basin States, subject to the water resource plan being submitted within a
specified period.
Version of Basin Plan to be applied when a water Notes
resource plan is given to the Minister under
Subdivision D
1 Table item 1 provides that if the report of the first This maintains the current
section 50 review of the Basin Plan has not been accreditation arrangements set out
provided to the Minister when the proposed water in the unamended subparagraph
resource plan is given to the Minister under 56(2)(b) in the Water Act for the
subsection 63(3), the Basin Plan to be applied at the first round of water resource plans
time of accreditation is the Basin Plan in effect two (i.e. before the first section 50
years before the proposed water resource plan is given review of the Basin Plan,
to the Minister. proposed to be conducted in 2026,
see items 3 and 4 of this Bill).
This recognises that Basin States
are already in the process of
preparing the first round of water
resource plans for accreditation.
2 Table item 2 provides that if a water resource plan is If an amendment that affects
given to the Minister within three years of a Basin water resource plan accreditations
Plan amendment that affects water resource plan comes into effect, all water
accreditation coming into effect, the Basin Plan to be resource plan accreditations will
applied is the Basin Plan in effect immediately after expire after a period of three
the amendment is made. A Basin Plan amendment years, as per revised section 64 -
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Version of Basin Plan to be applied when a water Notes
resource plan is given to the Minister under
Subdivision D
that affects water resource plan accreditation is an "Duration of accreditation" (see
amendment arising from a section 50 review (see also items 17-20).
items 10 and 11).
3 Table item 3 provides that if a water resource plan is This scenario recognises that, in
given to the Minister within three years of a section the absence of an amendment that
50 review report being given to the Minister and no affects water resource plans,
amendment to the Basin Plan has been made as a Basin States may nevertheless
result of the review, the Basin Plan to be applied is wish to review and revise some or
the version in effect immediately before the report all of their water resource plans
was handed to the Minister. for state reasons or because the
water resource plans cease to
continue under state law.
4 Table item 4 allows a Basin State to nominate a This item gives effect to the
version of the Basin Plan when submitting a water Government's response to
resource plan for accreditation, provided the version recommendation 5 of the Water
nominated is not older than the version that would Act Review by providing
apply under table items 1, 2 or 3. flexibility for Basin States to
nominate a more recent version of
the Basin Plan to be applied for
the purposes of accreditation.
Item 16 Before subsection 56(3)
34. This item inserts the subtitle "Minister to have regard to Authority's advice".
This clarifies the purpose of existing subsection 56(3) in relation to the other subsections
of revised section 56. This is necessary due to the increased length of, and detail in the
revised section 56.
Item 17 Subsection 64(1)
35. Item 17 replaces subsection 64(1) with a new subsection that provides that water
resource plans are accredited until three years after an amendment to the Basin Plan that
affects water resource plan accreditation or until the plan ceases to have effect under the
State water management law, whichever is the earlier. An amendment to the Basin Plan
that affects water resource plan accreditation is any amendment made as a result of a
section 50 review of the Basin Plan (as defined at new subsection 48(8)).
Item 18 Subsection 64(2)
36. This item is consequential to item 17 and clarifies that the duration of accreditation is the
three year period outlined in new subsection 64(1) (see item 17). The amendment does
not otherwise change the Minister's powers in relation to extensions of accreditation.
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Item 19 Subsection 64(4)
37. This item repeals subsection 64(4) and substitutes a new subsection 64(4) which
provides that an extension or further extension made under 64(2) (see item 18) must not
extend the three year period referred to in subsection 64(1) by more than one year.
This retains the ability of the Minister to extend accreditation by up to one year. This
item is consequential to items 17 and 18.
Item 20 Duration of accreditation
38. This item is an application provision only and does not amend the Water Act. It provides
that section 64 as amended by the Bill applies to water resource plans that have been
accredited before the commencement of this Part of the Water Act.
39. The amendments to section 64 do not have retrospective effect. However, once the
amendments to section 64 commence, they will apply prospectively to water resource
plans that have been accredited.
Part 3--Indigenous matters relevant to Basin water resources
Water Act 2007
Item 21 Subsection 4(1)
40. This item inserts the definition of "Indigenous person" into subsection 4(1) of the Water
Act. An Indigenous person is defined to mean a person who is a member of the
Aboriginal race of Australia; or a descendant of an Indigenous inhabitant of the
Torres Strait Islands. The definition is required for item 25, which amends the Water Act
to require that the Basin Community Committee's membership include at least two
Indigenous persons.
Item 22 After paragraph 22(3)(c)
41. The Basin Plan must include water resource plan accreditation requirements relating to
the sustainable use and management of the water resources of a water resource plan area
(table item 11 of section 22(1)). Section 22(3) of the Water Act specifies various matters
that must be included in the water resource plan accreditation requirements. This item
inserts paragraph 22(3)(ca), which specifies that the Basin Plan must include water
resource plan requirements relevant to having regard to the social, spiritual and cultural
matters relevant to Indigenous people in relation to the water resources of a water
resource plan area in the preparation of the water resource plan.
42. This amendment is intended to acknowledge the existing water resource plan
requirements in Part 14 of Chapter 10 of the Basin Plan - Indigenous values and uses -
and therefore does not require any consequential changes to the Basin Plan. For clarity,
nothing in this amendment will require specific water entitlements or reduce availability
or affect the reliability of existing water access rights.
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43. The item gives effect to the Government's response to recommendation 1 of the Water
Act Review.
Item 23 After paragraph 172(1)(i)
44. This item inserts paragraph 172(1)(ia), to add to the Authority's functions engaging the
Indigenous community on the use and management of Basin water resources.
45. This item gives effect to the Government's response to recommendation 20(b) of the
Water Act Review.
Item 24 At the end of subsection 178(3)
46. To be eligible for appointment as an Authority member a person must have a high level
of expertise in one or more fields relevant to the Authority's functions which are defined
by section 178(3). This item inserts paragraph 178(3)(h), which adds Indigenous matters
relevant to Basin water resources as a field relevant to the Authority's functions.
47. This item gives effect to the Government's response to recommendation 20(a) of the
Water Act Review.
Item 25 Paragraph 202(5)(c)
48. The Basin Community Committee is established by the Water Act to advise the
Authority on matters including engaging the community in preparation of each draft of
the Basin Plan; community matters relating to the Basin water resources; and matters
referred to the Committee by the Authority. Currently the Committee must include at
least one individual with expertise in Indigenous matters. The item amends that
requirement to provide that the membership of the Basin Community Committee
consists of at least two Indigenous individuals with expertise in Indigenous matters.
49. This item gives effect to the Government's response to recommendation 20(c) of the
Water Act Review.
Part 4--Trading by Commonwealth Environmental Water Holder
Water Act 2007
Item 26 Subsection 86AE(2)
50. Section 86AE(2) provides that the relevant purposes and objectives for managing and
disposing of Commonwealth environmental water holdings that were acquired with
amounts debited from the Special Account (established by Part 2AA of the Water Act)
are those of the Basin Plan environmental watering plan; not objectives that relate to
areas outside the Murray-Darling Basin. This item amends paragraph references to
reflect amendments to section 106.
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Item 27 Section 106
51. This item repeals and replaces section 106 with the paragraphs outlined below.
Subsection 106(1)
52. The Commonwealth Environmental Water Holder can only trade to meet environmental
objectives, not as a profit-making enterprise. Trade is enabled both when water is not
required and would otherwise be forfeited or foregone, or when selling water or
Commonwealth environmental water holdings would allow the Commonwealth
Environmental Water Holder to better protect or restore environmental assets. This is to
ensure that the highest priority environmental assets can receive water effectively.
53. The following subsections provide increased flexibility for the Commonwealth
Environmental Water Holder to dispose of (sell) water and Commonwealth
environmental water holdings and for the use the proceeds consistent with the existing
overarching governance framework for the Commonwealth Environmental Water
Holder, both in terms of its functions and objectives for trade.
54. Consistent with subsection 105(4) for the disposal of water or Commonwealth
environmental water holdings in the Murray-Darling Basin, the environmental objectives
are those in the Basin Plan environmental watering plan (Chapter 8 of the Basin Plan).
Subsection 106(2)
55. This subsection enables the Commonwealth Environmental Water Holder to sell water
that is not required during the water year to meet relevant environmental objectives and
cannot be carried over to the next water year (that is, it will be forfeited) or, if by
retaining the water, it could reasonably be expected to result in reductions in future
allocations (that is, water is likely to be foregone).
56. Allowing the sale of water that could otherwise lead to future allocations being foregone
introduces new flexibility to sell water (allocations) and ensure that the
Commonwealth's portfolio of water entitlements is used as effectively and efficiently as
possible to deliver environmental objectives.
57. This amendment gives effect to the Government's response to recommendation 16 of the
Water Act Review.
Subsection 106(3)
58. This subsection enables the Commonwealth Environmental Water Holder to sell water
allocations and use the revenue to invest in environmental activities, and/or purchase
water, where this is reasonably expected to provide greater capacity to achieve
environmental objectives from Commonwealth environmental watering than retaining
the allocations. It recognises that in some circumstances the intended environmental
outcomes from the application of Commonwealth environmental water can be more
16
effectively achieved by investing in works and measures that are complementary to
environmental water use, and not always by purchasing additional water.
59. Environmental activities can encompass a broad range of investments that improve the
effectiveness of Commonwealth environmental watering and could include, for example,
fish-ways or carp exclusion screens that support the delivery of water to off-river
wetlands. By selling a small volume of allocations in one year to fund the construction of
such works, it could improve the effectiveness of larger volumes of environmental water
delivered over several years, thereby improving environmental outcomes. Particular
environmental activities are not prescribed or defined, which provides the flexibility to
respond to changing priorities and invest in the activities that provide the best
environmental outcomes possible based on conditions at the time. This provision is
intended to enable additional targeted activities that complement, rather than duplicate or
replace, natural resource management programmes implemented by other entities.
Proceeds from allocation sales will not be used for bridging the gap or supply, efficiency
or constraints measures under the sustainable diversion limit adjustment mechanism.
As these activities will be funded from other sources, selling allocations to substitute for
other funding would not be likely to improve environmental outcomes compared to
retaining the allocations. The definitions of supply and efficiency measures under the
Basin Plan also preclude them from being funded from the proceeds of allocation sales
by the Commonwealth Environmental Water Holder.
60. The amended subsection retains the requirement to use proceeds from the sale of water
entitlements to purchase water or Commonwealth environmental water holdings (a key
safeguard recommended in the Water Act Review). It also retains the Commonwealth
Environmental Water Holder's ability to use proceeds from the sale of water allocations
to purchase water or Commonwealth environmental water holdings.
61. The amended subsection retains a number of other requirements for the use of proceeds
from the sale of water and Commonwealth environmental water holdings. Trade
proceeds will need to be credited to the Special Account in order to enable the
Commonwealth Environmental Water Holder to give effect to his or her reasonable
belief at the time of disposal that environmental outcomes would be improved. Funds
from the Special Account need to be used in the performance of the functions of the
Commonwealth Environmental Water Holder, consistent with requirements for the
Account. Water and Commonwealth environmental water holdings in the
Murray-Darling Basin must be managed in accordance with the Basin Plan
environmental watering plan, meaning that proceeds from the sale of water and
Commonwealth environmental water holdings in the Basin must be invested in the
Basin.
62. New subsection 106(3)(b) provides that the proceeds of a disposal of a water allocation
may only be used for environmental activities if the requirement in relation to the
long-term annual diversion limit is satisfied. Subsections 106(5-6) set out the
requirements that must be met to satisfy the long-term annual diversion limit condition
referred to in subsection 106(3)(b). This is intended to ensure that the Commonwealth
Environmental Water Holder's ability to trade continues to support the Water Act's
object to return the Murray-Darling Basin to sustainable levels of extraction through the
sustainable diversion limits under the Basin Plan and does not impact on the
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achievement of the sustainable diversion limits in the long-term, a key safeguard
recommended in the Water Act Review.
63. This amendment, together with the additional subsections 106(4) to (6), gives effect to
the Government's response to recommendation 15 of the Water Act Review.
Subsection 106(4)
64. This subsection clarifies that proceeds from trade under section 106(3) cannot be used to
pay for fees and charges for holding and delivering Commonwealth environmental
water. The subsection is intended to support the environmental objects of the Water Act
and Basin Plan by ensuring that these are not compromised as a result of water that has
been acquired for the purpose of meeting environmental objectives being sold to meet
non-discretionary fees and charges associated with operating costs. The subsection is
also intended to limit the potential for adverse market impacts, which may arise if the
Commonwealth Environmental Water Holder were required to approach the market with
the aim of raising funds to cover its non-discretionary operating costs.
65. The Commonwealth Environmental Water Holder continues to pay all fees and charges
for the holding and delivery of environmental water from appropriations made to the
Special Account, and not from trade proceeds.
Subsection 106(5)
66. Subsection 106(3)(b) provides that the proceeds from a sale of water allocations may
only be used for environmental activities if the Commonwealth Environmental Water
Holder is satisfied that the long-term annual diversion limit has been complied with in
the resource unit where the disposal is to take place.
67. Satisfaction that the long-term annual sustainable diversion limit has been complied with
for the purposes of section 106(3)(b) is a decision for the Commonwealth Environmental
Water Holder that must be based on information published by the Authority prior to the
disposal. Under the Basin Plan, the Authority is required to publish registers of take that
record any difference between annual actual take and annual permitted take and a
cumulative balance for each sustainable diversion limit resource unit (see Part 4,
Division 1 of Chapter 6 of the Basin Plan 2012).
Subsection 106(6)
68. This subsection provides that the condition relating to long-term sustainable diversion
limits in new subsection 106(5) does not restrict the use of the proceeds of trade under
section 106(3) before the sustainable diversion limits come into effect and registers of
take are published by the Authority.
Item 28 After paragraph 114(2)(a)
69. This item promotes transparency and accountability by requiring the Commonwealth
Environmental Water Holder to publish information on the trade of water and
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Commonwealth environmental water holdings, and the purposes for which proceeds
from trades are used, in its annual report.
70. This amendment gives effect to the Government's response to recommendation 17 of the
Water Act Review.
Item 29 Annual report of the Commonwealth Environmental Water Holder
71. This item ensures that the reporting requirement inserted by item 28 does not require the
Commonwealth Environmental Water Holder to amend previous annual reports.
It provides that the requirement of the Commonwealth Environmental Water Holder to
include information in its annual report on the disposal of water and Commonwealth
environmental water holdings, and the purposes for which proceeds from disposals are
used, applies only where the disposal or use of proceeds takes place on or after the day
these amendments commence (the day after Royal Assent).
Part 5--Murray-Darling Basin Water Rights Information Service
Water Act 2007
Item 30 Subsection 4(1) (definition of registrable water rights)
72. This item repeals the definition of registrable water rights in subsection 4(1) of the Act.
This item is consequential to the repeal of Part 5 of the Act (see items 31 and 32).
The term only has effect in relation to the Murray-Darling Basin Water Rights
Information Service and is now redundant.
Item 31 Part 5
73. This item repeals Part 5 of the Water Act (the Murray-Darling Basin Water Rights
Information Service).
74. The Water Rights Information Service was designed to facilitate the operation of
efficient water markets and minimise costs for market participants by providing
information about the Basin that is easy to access and consistent. It was intended to be a
facilitative mechanism only and was not intended to replace state-based registers. Prime
responsibility for water access rights information, including responsibility for keeping
information up to date, has and will continue to rest with Basin States.
75. The Water Rights Information Service has not been established and there are no plans to
establish it in the future.
76. Each Basin State maintains registers under relevant state water management legislation.
Other registers are also operated by infrastructure operators. Several initiatives
undertaken by the Commonwealth are also contributing to the availability of water rights
information. These include:
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the Basin Plan water trading rules - these require certain information to be made
publicly available in a central location (via the Authority) to facilitate the operation of
efficient water markets and opportunities for trading; and
water market information collected by the Bureau of Meteorology - this is made
publicly available through regular web-based water market reports. It is also presented
in the Australian water markets report (previously prepared by the former National
Water Commission, but to be prepared in future by the Australian Bureau of
Agricultural and Resource Economics and Sciences).
Item 32 Subparagraph 172(1)(a)(ii)
77. This item repeals subparagraph 172(1)(a)(ii), which conferred on the Authority a
function in relation to Part 5. Following the repeal of Part 5, this subparagraph is
redundant.
Part 6--Miscellaneous amendments
Water Act 2007
Item 33 Subsection 4(1) (definition of bulk water charge)
78. This item makes a minor amendment to the definition of "bulk water charge" to clarify
that bulk water charges means charges that are payable for either or both the storage of
water for, or the delivery of water to, the persons described in the definition.
79. This item gives effect to the Government's response to recommendation 13 of the Water
Act Review.
Item 34 Subsection 7(1)
80. This item makes a minor amendment to an existing provision relating to the definition of
infrastructure operators and water service infrastructure. The amendment clarifies if a
person owns or operates infrastructure for the purposes of storing, delivering or draining
water (or for more than one of those purposes) for the purpose of providing a service to a
person who is not the owner or operator of the infrastructure, the person is an
infrastructure operator and the infrastructure is water service infrastructure.
81. This item gives effect to the Government's response to recommendation 13 of the Water
Act Review.
Item 35 Subsection 7(4)
82. This item makes a minor amendment to an existing provision relating to the definition of
irrigation infrastructure operator and irrigation networks. This amendment clarifies that
if a person is an Infrastructure Operator by virtue of being an owner of water service
infrastructure (according to section 7(1)) but their infrastructure is operated by another
person for the purpose of delivering water for the primary purpose of being used for
irrigation, the owner will also be an Irrigation Infrastructure Operator.
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83. This item gives effect to the Government's response to recommendation 13 of the Water
Act Review.
Item 36 Subsection 74(4)
84. Subdivision A of Part 2 to Division 4 of the Water Act deals with the allocation of risk
from the Basin Plan sustainable diversion limit reductions. These provisions are based
on the risk allocation provision of the National Water Initiative as amended by the
Agreement on Murray-Darling Basin Reform of 3 July 2008.
85. The Commonwealth must endeavour to manage the impact of its share of the reduction
of water access entitlements. The Basin Plan in turn provides that the Commonwealth's
share of the reduction between the baseline diversion limits and the Basin Plan
sustainable diversion limits is 100 per cent (see section 6.13 of the Basin Plan).
Successive Governments have committed to managing the impact of this reduction by
"bridging the gap" between the Basin Plan baseline diversion limits and the long-term
sustainable diversion limits, which come into effect on 1 July 2019. The Government is
bridging the gap by prioritising water recovery through infrastructure investment and
limiting surface water entitlement purchases in the Murray-Darling Basin consistent with
the 1500 gigalitre limit legislated in the Water Amendment Act 2015.
86. The risk assignment provisions are an important safeguard mechanism through which
compensation can be paid if, despite the Commonwealth's endeavours to manage the
impact of the reduction, a water access entitlement holder suffers a reduction or change
in reliability. This item amends the simplified outline in section 74 to clarify the effect of
these provisions. The amended section provides that if there is a reduction in, or change
in reliability of, a water entitlement holder's allocations that is reasonably attributable to
the Commonwealth's share of the reduction in the sustainable diversion limit, and other
conditions are met, the Commonwealth will make a payment to the entitlement holder.
87. This item gives effect to the Government's response to recommendation 7 of the Water
Act Review.
Item 37 Subsection 92(4)
88. This item repeals existing subsection 92(4) and substitutes a new subsection.
New paragraph 92(4)(a) retains the existing provision for the water charge rules to
specify the effect and period of effect (previously referred to as "duration") of a
determination or approval of regulated water charges. New paragraph 92(4)(b) provides
new flexibility for the ACCC (or an accredited State agency) to extend the period of
effect that applies to a determination or approval of regulated water charges as
necessary, beyond the period of effect referred to in rule 3 of the Water Charge
(Infrastructure) Rules 2010.
89. This will enable the water charge rules to be amended to:
reduce regulatory burden through greater alignment of regulatory processes
(especially state regulatory processes relating to water resources outside the Basin, or
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urban water supply activities that are not within the scope of the water charge
rules); and
set the regulatory period having regard to issues relevant to a particular infrastructure
operator, to the water industry or to the wider economy.
90. This item gives effect to the Government's response to recommendation 12 of the Water
Act Review.
Schedule 2--Technical amendments
Part 1--Technical amendments affecting definition of referring State
Water Act 2007
91. In 2008 Queensland, New South Wales, Victoria and South Australia enacted legislation
referring legislative power in relation to some matters dealt with by the Water Act to the
Commonwealth Parliament, under subsection 51(xxxvii) of the Commonwealth
Constitution. The Water Amendment Act then amended the Water Act to give effect to
the Basin State referral. The relevant provisions of the Water Act supported by state
referrals of legislative power ("referred provisions") deal with the Murray-Darling Basin
Agreement, critical human water needs, the water charge and water market rules, and
transitional arrangements in relation to the former Murray-Darling Basin Commission
(Parts 1A, 2A, 4, 4A, 10A and 11A of the Water Act).
92. The amendments in items 1 to 4 make minor, technical amendments to the definition of
"referring State" in section 18B, which aligns the definition with the definitions in the
Basin States' referral legislation. The amendments take effect from 15 December 2008,
the date that referring provisions of the Water Amendment Act commenced.
Item 1 Subsection 18B(3)
93. Section 18B(3) provides that the initial Basin State reference "covers the matters to
which the referred provisions for the State in question relate to the extent of making laws
with respect to those matters by including the referred provisions in this Act." The
amendment reinserts the words, ", as originally enacted by the Water Amendment Act
2008," after "including the referred provisions", which are omitted by item 4 of Part 1 of
this Schedule.
Item 2 Subsection 18B(9) (definition of amendment)
94. This amendment repeals the definition of "amendment" in subsection 18B(9).
The substance of the definition is replicated in the definition of "express amendment" in
subsection 18B(9) of this Schedule. This amendment aligns the definition with the
definitions in the Basin State referral legislation.
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Item 3 Subsection 18B(9) (definition of express amendment)
95. This amendment adds to the definition of "express amendment" in subsection 18B(9).
The substance of the previous definition of "amendment" (repealed by item 2 of Part 1
of this Schedule) is inserted into the definition of "express amendment".
Item 4 Subsection 18B(9) (paragraphs (a) and (b) of the definition of referred
provisions)
96. Section 18B(9) defines the "referred provisions". Paragraph (a) defines the referred
provisions for a Basin State as Part 1A, 2A, 4, 4A, 10A and 11A "as originally enacted
by the Water Amendment Act 2008, to the extent to which they deal with matters that are
included in the legislative powers of the Parliament of the State". Paragraph (b) defines
the referred provisions for a State that is not a Basin State to mean Part 4A and 11A "as
originally enacted by the Water Amendment Act 2008, to the extent to which they deal
with matters that are included in the legislative powers of the Parliament of the State."
This amendment omits the words "as originally enacted by the Water Amendment Act
2008" in paragraph (a) and (b) of the definition. This amendment aligns the definition
with the definitions in the Basin State referral legislation.
Part 2--Amendments consequential on the Acts and Instruments
(Framework Reform) Act 2015
Water Act 2007
Items 5-8 Various provisions
97. These items are technical amendments to implement the change in name of the
Legislative Instruments Act 2003 to the Legislation Act 2003. Amendments in items 5, 6
and 7 also update specific references to the amended Legislation Act 2003. These items
do not make substantive changes to any of the provisions listed.
Part 3--Spent provisions
Water Act 2007
98. The following items repeal spent provisions that relate to the application of the Water
Act before the Basin Plan came into effect.
Item 9 Subsection 68(1)
99. This item omits the reference to "Division 1". Division 1 of Part 11 is no longer required
due to the repeal of Divisions 2 and 3 of Part 11 (see item 13).
Item 10 Part 11 (heading)
100. This item repeals the current Part 11 heading "Other transitional matters" and replaces it
with "Transitional arrangements for water resource plans". This is because Part 11 will
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now deal entirely with transitional water resource plan arrangements and no other
matters following the repeal of Divisions 2 and 3 (see item 13).
Item 11 Division 1 of Part 11 (heading)
101. This item repeals the heading "Division 1 - Management of Basin water resources
(Part 2)". While the content provided in Division 1 will be retained (with the exception
of section 240, see item 12), it will no longer be necessary to identify it as Division 1
following the repeal of Divisions 2 and 3 (see item 13).
Item 12 Section 240
102. This item repeals section 240, which allowed for water resource plan areas to be
identified prior to the first Basin Plan coming into effect. Following the Basin Plan
coming into effect in November 2012 this provision is now redundant.
Item 13 Divisions 2 and 3 of Part 11
103. This item repeals Divisions 2 and 3 of Part 11. These Divisions provide transitional
arrangements relevant to the Commonwealth Environmental Water Holder and the
Authority prior to the first Basin Plan coming into effect and are now redundant.
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