The Council of Australian Governments (COAG) agreed in principle in Adelaide on 26 March 2008 to a Memorandum of Understanding (MOU) on Murray-Darling Basin Reform that could remove decades of debate between the Commonwealth and State Governments over water rights.
The COAG MOU aims to establish a cooperative and accountable governance arrangement to enable genuine whole-of-Basin water management to restore the environment and ensure sustainable agriculture.
In order to implement the reforms, the Commonwealth and the Murray-Darling Basin states (New South Wales, Victoria, Queensland, South Australia and the Australian Capital Territory) have agreed that the Murray-Darling Basin Authority and the Murray-Darling Basin Commission be merged into a single institution, to be known as the Murray-Darling Basin Authority (Authority).
The new, independent Authority will be responsible for developing, implementing and monitoring the Basin Plan, which will include a sustainable cap on surface and groundwater diversions from across the Basin. COAG is also working to expand existing knowledge on sustainable yields across all major river systems in Australia.
The Basin Plan will provide for the critical human water needs of communities that use water from the Murray River and its tributaries, for sustainable industries and for enhanced environmental outcomes. The Commonwealth has also agreed to honour existing water resource plans in all jurisdictions, including those Victorian plans that continue until 2019.
COAG have also agreed on significant changes to the National Water Initiative risk assignment framework, which is enshrined in the Water Act 2007 (Cth). The framework will now commence from the date existing water resource plans in the Murray-Darling Basin cease to have effect, which will vary from state to state.
The Commonwealth has also agreed to assume 100 per cent of the risk of any reduction in water availability that is attributable to improvements in knowledge about long-term sustainable diversion limits that exceed 3 per cent of the relevant diversion limit in each 10 years period. Previously the states assumed one-third of that risk.
The Commonwealth Minister for Climate Change and Water is responsible for approving the Basin Plan under the Water Act. However, a new Ministerial Council, comprising all Basin states and chaired by the Commonwealth, will be established under the Water Act to advise the Minister in relation to the Basin Plan. Importantly, if the Minister for a Basin state disagrees with the proposed cap or other parts of the Basin Plan, these matters will be referred back to the Authority for reappraisal.
As part of securing Victoria's commitment to the MOU, the Commonwealth Government has agreed in principle to fund 90 per cent of the project costs (up to A$1 billion) of the Stage Two Food Bowl Project in Victoria, subject to a joint due diligence assessment and environmental flow conditions. The Victorian Government is already implementing Stage One of the Project to capture approximately 225 billion litres per year of water to be shared equally by local irrigation systems, environment and Melbourne households and businesses.
Between now and the next COAG meeting in late July, the Commonwealth is to agree with the governments of New South Wales, Queensland, South Australia and the Australian Capital Territory on priority water savings projects in the Basin for priority funding.
The parties will also consider how the role of the ACCC might be strengthened. Currently the ACCC advises the Commonwealth Minister on water market rules and may also determine water charges in the Basin under the Water Act.
Governments will now consult with stakeholders on the implementation of the MOU and have committed to signing an Intergovernmental Agreement at the July 2008 COAG meeting. It will be important to examine the detail regarding the implementation of the MOU and, in particular, how it affects individual entitlement holders in affected water resource plan areas. Full details of the MOU are in the COAG Communique at www.coag.gov.au.
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