Commonwealth of Australia Explanatory Memoranda

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WATER AMENDMENT (RESTORING OUR RIVERS) BILL 2023

                             2022-2023




THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                              SENATE




WATER AMENDMENT (RESTORING OUR RIVERS) BILL 2023




     SUPPLEMENTARY EXPLANATORY MEMORANDUM




       Amendments to be Moved on Behalf of the Government




(Circulated by authority of the Minister for the Environment and Water,
                    the Hon. Tanya Plibersek MP)


AMENDMENTS TO THE WATER AMENDMENT (RESTORING OUR RIVERS) BILL 2023 GENERAL OUTLINE The Water Amendment (Restoring Our Rivers) Bill 2023 (the Bill) would implement the Basin Plan 2012 (the Basin Plan) in full and implement recommendations from the Water Market Reform: Final Roadmap Report to restore transparency, integrity and confidence in water markets in the Murray-Darling Basin. The proposed amendments to the Bill would amend the Water Act 2007 (the Water Act) and the Basin Plan to: • amend the objects of the Water Act and the purpose of the Basin Plan to ensure that the use and management of the Basin water resources takes into account spiritual, cultural, environmental, social and economic matters relevant to Indigenous people; • make minor amendments to expand the scope of the review into the Water for the Environment Special Account (WESA); • allow the Murray-Darling Basin Authority (the Authority) to make one-off adjustments to the cumulative balance for surface water sustainable diversion limit (SDL) resource units for water accounting periods commencing from 1 July 2019; and • enable the Minister to specify, under section 7.08B of the Basin Plan, a broader range of rights that fall within the existing definition of held environmental water. This would provide the Minister with a broader range of options to increase the volume of Basin water resources that is available for environmental use by 450 GL per year and contribute to enhancing environmental outcomes. FINANCIAL IMPACT STATEMENT The proposed amendments would have no financial impact on the Australian Government Budget. STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS The proposed amendments promote the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The full Statement of Compatibility with Human Rights is included in this supplementary explanatory memorandum at the Attachment. 2


NOTES ON AMENDMENTS Amendment 1 - Schedule 1, page 4 (after line 2), after the heading to Schedule 1 1. This amendment would insert a new Part 1A, titled 'Taking into account matters relevant to Indigenous people', into Schedule 1 to the Bill. New Part 1A would consist of new items 1A and 1B. 2. Item 1A would insert new paragraph (fa) into section 3 of the Water Act to provide that one of the objects of the Water Act is to ensure that the use and management of the Basin water resources takes into account spiritual, cultural, environmental, social and economic matters relevant to Indigenous people. 3. Item 1B would insert new paragraph (da) into section 20 of the Water Act, which deals with the purpose of the Basin Plan. This amendment would clarify that one of the purposes is to provide for the use and management of Basin water resources that takes into account spiritual, cultural, environmental, social and economic matters relevant to Indigenous people. 4. This amendment would reflect that the spiritual, cultural, environmental, social and economic matters relevant to Indigenous people (based on the general principles of the 2007 Echuca Declaration) are within the scope of the Water Act and Basin Plan. Amendment 2 - Schedule 1, item 11A, page 7 (lines 19 to 22) 5. This amendment would omit and substitute proposed subsection 86AJ(3A) so that the independent panel conducting a review on the WESA must also consider the effectiveness of: a) payments made, or expected to be made, under paragraph 86AD(2)(c) in relation to a purchase referred to in paragraph 86AD(2)(b); and b) payments made, or expected to be made, from other sources in relation to purchases referred to in paragraph 86AD(2)(b). 6. The purpose of this amendment is to include the effectiveness of any payments (whether made from WESA or otherwise) to address socio-economic impacts of purchases funded through WESA to be considered in the third independent review of the WESA. Amendment 3 - Schedule 1, item 18, page 10 (after line 5) after subsection 71(1B) 7. This amendment would insert new subsections 71(1C), (1D) and (1E) into the Water Act. 8. Subsection 71(1C) would provide that if, after the commencement of this amendment, a one-off adjustment is to be made, in accordance with proposed section 6.08D of the Basin Plan, to the cumulative balance for any surface water SDL resource unit for one 3


or more relevant water accounting periods, a report must be given under subsection 71(1) that includes the information set out in paragraphs 71(1C)(a) and (b). 9. Paragraph 71(1C)(a) would require that the report must include the information mentioned in paragraphs 71(1)(b) to (c) in relation to each of the relevant water accountings periods. 10. Paragraph 71(1C)(b) would require that the report must also include any other information necessary to make the one-off adjustment for the purpose of section 6.08D of the Basin Plan. 11. Subsection 71(1D) would provide that the information required by subsection 71(1C) must be given to the Authority: a) if the register of take for the surface water SDL resource unit has already commenced as at the commencement of this subsection-- in the first report given to the Authority under subsection 71(1) after the commencement of this subsection; or b) if the register of take for the surface water SDL resource unit has not already commenced as at the commencement of this section--in the first report given to the Authority under subsection 71(1) after the end of the water accounting period in which the register of take commences. 12. Subsection 71(1E) would provide that expressions used in subsections 71(1C) and (1D) have the same meanings as they have in the Basin Plan. 13. These amendments would ensure that the Authority has the information necessary to make the one-off adjustment to the cumulative balance for surface water SDL resource units for one or more relevant water accounting periods. 14. By operation of subsection 71(3), the Authority will provide the report containing this information to the Inspector-General of Water Compliance as soon as practicable after the Authority has received the report. Amendment 4 - Schedule 2, page 12 (after line 4), before item 1 15. This amendment would insert new item 1AA into Schedule 2 to the Bill. Item 1AA would insert a definition of relevant water accounting period into subsection 1.07(1) of the Basin Plan that refers to the use of that term in new subsection 6.08E(4). The definition would apply in Division 1A of Part 4 of Chapter 6. Amendment 5 - Schedule 2, page 13 (after line 15), after section 6.08C 16. This amendment would insert proposed Division 1A titled 'One-off adjustment to cumulative balances for surface water SDL resource units' into Part 4 of Chapter 6 of the Basin Plan. 17. Under existing subsection 6.08(5) of the Basin Plan, the register of take commences in the first water accounting period after 30 June 2019 following the commencement of a water resource plan (WRP). Under existing subsection 6.08(6), when the register of 4


take commences for a surface water SDL resource unit, it must record a cumulative balance of zero. 18. Given the delays with the accreditation of relevant WRPs, the registers of take for many surface water SDL resource units did not commence on 1 July 2019. These amendments would require the Authority to make one-off adjustments to the cumulative balance for surface water SDL resource units for which the register of take did not commence by 1 July 2019. 19. These amendments would support a one-off adjustment which will follow a process consistent with the accounting arrangements relating to SDL accounting generally (see Division 2 of Part 4 of Chapter 6 of the Basin Plan). This process would include adjusting the cumulative balance for both incomplete recovery (in a similar way to subsection existing 6.11(5)) and the disposal and acquisition of held environmental water (in a similar way to existing paragraph 6.12(1)(a)). Existing section 6.09 of the Basin Plan provides that the method in Division 2 of Part 4 of Chapter 6, for determining compliance with the SDL of a surface water SDL resource unit, only applies to each water accounting period after 30 June 2019 following the commencement of a WRP relating to the relevant SDL resource unit. 20. The one-off adjustment would ensure that these registers of take reflect any credits or debits that would have otherwise accrued during the relevant water accounting periods after 1 July 2019 until the commencement of the register of take. Division 1A - One-off adjustment to cumulative balances for surface water SDL resource units Section 6.08D - Determining one-off adjustment to cumulative balances from 1 July 2019 21. New section 6.08D would require the Authority to make a one-off adjustment to the cumulative balance for each surface water SDL resource unit, unless the register of take for the surface water SDL resource unit had already commenced as at 1 July 2019. 22. For registers of take for a surface water SDL resource unit for which the Authority must make a one-off adjustment that have already commenced as at the commencement of this section 6.08D, the Authority must make a one-off adjustment in relation to the surface water SDL resource unit as soon as practicable after the beginning of the first water accounting period after that commencement. 23. For registers of take for which the Authority must make a one-off adjustment that have not commenced as at the commencement of section 6.08D, the Authority must make a one-off adjustment in relation to the surface water SDL resource unit as soon as practicable after the end of the water accounting period in which the register of take commences. Section 6.08E - Step 1 - Calculation of annual permitted take and annual actual take for one- off adjustment 24. New section 6.08E would set out how to determine the annual permitted take and annual actual take for each of the relevant water accounting periods, for the purposes of 5


calculating the one-off adjustment to the cumulative balance of a surface water SDL resource unit specified in section 6.08D. This section is based on existing section 6.10 of the Basin Plan. 25. Subsection 6.08E(2) would provide that for each relevant water accounting period for the surface water SDL resource unit, sum the maximum quantity of water permitted to be taken by each form of take for consumptive use from the surface water SDL resource unit, determined in accordance with proposed section 6.08G of the Basin Plan. 26. Subsection 6.08E(3) would provide that for the same water accounting period, sum the quantity of water actually taken by each form of take for consumptive use from the surface water SDL resource unit. 27. Subsection 6.08E(4) would provide that a relevant water accounting period for a surface water SDL resource unit would mean a water accounting period that begins on or after 1 July 2019, other than the water accounting period in which the register of take for the surface water SDL resource unit commences or any later water accounting period. That is, the relevant water accounting period(s) include the time between 1 July 2019 and the commencement of the register of take. Section 6.08F - Step 2 - Calculate and record the one-off adjustment 28. New section 6.08F would provide that if there is a difference between the annual actual take and the annual permitted take for each relevant water accounting period, the difference is a debit or a credit. If there is no difference, the difference is zero. 29. This section is based on existing sections 6.11 and 6.12(1)(a) of the Basin Plan. 30. As a result of the sum of the total differences between the annual permitted take and the annual actual take for each relevant water accounting period for the surface water SDL resource unit, the Authority would determine the one-off adjustment to the cumulative balance. 31. Subsection 6.08F(5) would provide that if, in any of the relevant water accounting periods, the circumstances mentioned in the example in paragraph 6.12(4)(b) of the Basin Plan applied, the one-off adjustment for the surface water SDL resource unit is to be adjusted by crediting to that balance the amount attributable to all of those circumstances. 32. The circumstances mentioned in the example in paragraph 6.12(4)(b) are where, for reasons beyond the Basin States control, the Commonwealth has not achieved the water recovery target that it has set for itself in relation to the SDL resource unit. 33. Subsection 6.08F(5) also provides that subsection 6.11(5) does not apply to the relevant water accounting period. This is to ensure that when applying subsection 6.11(5), double crediting or debiting does not inadvertently occur. 34. Subsection 6.08F(6) would provide that the one-off adjustment for the surface water SDL resource unit is to be further adjusted to account for any disposal or acquisition of 6


held environmental water that occurred in each of the relevant water accounting periods. 35. Such disposal and acquisition of held environmental water includes any temporary transfers of entitlements or allocations that occurred in each of the relevant water accounting period(s). It does not include held environmental water permanently acquired by the Commonwealth to bridge the gap from the baseline diversion limits to the SDLs. Held environmental water acquired through efficiency measures and additional HEW entitlements have the effect of adjusting the SDLS and, as a result, the calculation of the annual permitted take for each of the relevant water accounting periods. Therefore, the cumulative balance is not adjusted to reflect the acquisition of this held environmental water. 36. Subsection 6.08F(7) would provide for the one-off adjustment to be recorded on the register of take as either a debit, a credit or a zero. 37. Subsection 6.08F(8) would provide that, for the water accounting period in which the one-off adjustment is made under this Division, the cumulative balance made under subsection 6.11(4) is to include the effect of the one-off adjustment. 38. It is intended that there is no assessment of whether there is SDL non-compliance for the relevant water accounting periods which are the subject of the one-off adjustment. SDL non-compliance under section 6.12 is only assessed after the register of take commences. The cumulative balance recorded in the register of take prepared for the purposes of Division 2 would incorporate the one-off adjustment. The compliance assessments from that point onward would take into account water usage patterns for all water accounting periods from 1 July 2019. Section 6.08G - How to calculate the annual permitted take and the annual actual take 39. New section 6.08G would provide that, if the annual permitted take or the annual actual take cannot be worked out using the method set out in the relevant WRP, because the data is not available for a form of take in any particular water accounting period(s), then the annual permitted take and the annual actual take are to be either: a) the long-term annual average take for that form of take; or b) worked out in accordance with an alternative method determined by the Authority in consultation with the relevant Basin State. This alternative method must be determined before whichever of the following applies: i. if the WRP for the surface water SDL resource unit is accredited as at the start date--on or before the first 30 June after the start date; ii. if the WRP for the surface water SDL resource unit is not accredited as at the start date--on or before 30 June of the water accounting period in which the register of take commences. 7


40. The first note accompanying subsection 6.08G(1) would explain that section 10.10 of the Basin Plan requires WRPs to set out a method for determining the annual permitted take from each SDL resource unit in each water accounting period. 41. The second note accompanying subsection 6.08G(1) would explain that section 10.15 of the Basin Plan requires WRPs to set out how the annual actual take is determined for each form of take from each SDL resource unit after the end of each water accounting period. 42. For the purposes of paragraph 6.08G(2)(b), any alternative method used to determine the annual permitted take and annual actual take, must be consistent with subsection 10.15(3) of the Basin Plan. 43. Subsection 10.15(3) requires that where a determination is made for the purposes of subsection 10.15(1), by estimating the annual actual take, the relevant WRP must provide for that estimate to be done consistently with the method used for determining the annual permitted take under subsection 10.10(1) of the Basin Plan, that relates to the relevant form of take. 44. Where long-term annual average take is used in place of annual permitted take and annual actual take, it is expected that long-term annual average take would ordinarily be determined using the best available estimate of the baseline diversion limit for that form of take (determined in accordance with Schedule 3 of the Basin Plan). In circumstances where it may be necessary to use long-term annual average take for a form of take (for example, for unregulated take), generally, the baseline diversion limit would be equivalent to the sustainable diversion limit for the relevant form of take. 45. The Authority must publish the method used for the purposes of section 6.08G on its website. Amendment 6 - Schedule 2, item 12, page 15 (line 18) 46. This amendment would omit 'water access entitlement' from the last paragraph of the note to Chapter 7 of the Basin Plan and substitute 'water access right, water delivery right or irrigation right'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1) of the Basin Plan, of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 7 - Schedule 2, page 15 (after line 26), after item 13 47. This amendment would insert new item 13A. Item 13A would omit 'In' from section 7.02 of the Basin Plan and substitute it with '(1) In'. Amendment 8 - Schedule 2, item 16, page 16 (line 3) 48. This amendment would omit 'entitlement' from the proposed definition of additional HEW entitlement in section 7.02 of the Basin Plan and substitute 'right, a water delivery right, an irrigation right, or a part of such a right'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 8


'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 9 - Schedule 2, page 16 (after line 15), after item 19 49. This amendment would insert new item 19A. Item 19A would add new subsection 7.02(2) to provide that a reference in Chapter 7 and in Schedule 6A to a water access right, water delivery right, irrigation right or water access entitlement includes a reference to a part of such a right or entitlement. 50. The effect of this amendment is that, for example, the references to 'water access entitlement' in the definitions to efficiency entitlements and additional efficiency entitlements in section 7.02 will include a reference to a part of a water access entitlement. There may be circumstances where, for example, the Commonwealth acquires part of a share component available under a water access entitlement held by a third party. The Commonwealth does not acquire the entire right held by that person, but instead the Commonwealth's existing water access entitlement is increased by an amount equivalent to the share of the entitlement that has been acquired. In these circumstances, the part of the water access entitlement that represents the acquired units in the share component could be an efficiency entitlement, so long as the criteria in the definition of efficiency entitlement in section 7.02 are satisfied. Amendment 10 - Schedule 2, item 21, page 17 (lines 15 and 16) 51. This amendment would omit 'that a water access entitlement for a surface water SDL resource unit' from proposed subsection 7.08B(1) of the Basin Plan and substitute it with 'that a water access right, a water delivery right, or an irrigation right, for a surface water SDL resource unit, or part of such a right'. This amendment would enable the Minister to specify water access rights, water delivery rights, and irrigation rights as 'additional HEW entitlements' so long as the criteria in section 7.08B are satisfied. 52. This amendment would also enable the Minister to specify a part of a water access right, water delivery right, or irrigation right as an 'additional HEW entitlement', so long as the criteria in section 7.08B are satisfied. The Minister may make such a specification in circumstances where, for example, the Commonwealth purchases part of the volume, or part of the share component of a water access right held by a third party. The Commonwealth does not acquire the entire right held by that person, but instead the Commonwealth's existing water access right is increased by an amount equivalent to the purchased volume or units in the share component. In these circumstances, the Minister would specify, under subsection 7.08B(1), the part of the Commonwealth's relevant right that represents the purchased volume or units in the share component as an 'additional HEW entitlement', so long as the criteria in section 7.08B are satisfied. 53. The amendment would enable the Minister to specify under subsection 7.08B(1) a broader range of rights that fall within the existing definition of held environmental water under subsection 4(1) of the Act. This amendment would provide the Minister with a broader range of options to increase the volume of Basin water resources that is available for environmental use by 450GL per year and contribute to enhancing 9


environmental outcomes, as mentioned in subsection 86AA(1) of the Water Act, including the outcomes set out in Schedule 5 to the Basin Plan. 54. Consequential amendments would also be made to the Bill to reflect the amendments made to the subsection 7.08B(1). Amendment 11 - Schedule 2, item 21, page 17 (line 20) 55. This amendment would omit 'water access entitlement' from subsection 7.08B(2) of the Basin Plan and substitute 'right, or the part of such a right'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 12 - Schedule 2, item 21, page 17 (after line 28) 56. This amendment would add a new note to proposed subsection 7.08B(2) of the Basin Plan to clarify that water access rights, water delivery rights, and irrigation rights are types of rights that fall within the definition of held environmental water under subsection 4(1) of the Water Act. Amendment 13 - Schedule 2, item 21, page 17 (line 29) 57. This amendment would omit 'water access entitlement' from subsection 7.08B(3) of the Basin Plan and substitute 'right, or the part of such a right'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 14 - Schedule 2, item 21, page 18 (line 5) 58. This amendment would omit 'entitlement' from proposed subsection 7.08B(4) of the Basin Plan and substitute 'right, or the part of such a right'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 15 - Schedule 2, item 21, page 18 (line 9) 59. This amendment would omit 'water access entitlement' from proposed subsection 7.08B(5) of the Basin Plan and substitute 'a right, or a part of such a right'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 16 - Schedule 2, item 40, page 22 (line 30) 60. This amendment would omit 'entitlements' from proposed Note 1 to subsection 7.16A(1) of the Basin Plan and substitute 'rights, water delivery rights or irrigation rights'. This is a consequential amendment to reflect the broadening, under subsection 10


7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 17 - Schedule 2, item 40, page 22 (line 32) 61. This amendment would omit 'entitlements' from proposed Note 2 to subsection 7.16A(1) of the Basin Plan and substitute 'rights, water delivery rights and irrigation rights'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 18 - Schedule 2, item 53, page 26 (line 6) 62. This amendment would omit 'entitlements' from the simplified outline in section S6A.01 of Schedule 6A to the Basin Plan and substitute it with 'rights, water delivery rights and irrigation rights'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 19 - Schedule 2, item 60, page 27 (line 9) 63. This amendment would omit 'entitlements' from the proposed note to the definition of current additional HEW contribution in subsection S6A.02(1) of Schedule 6A to the Basin Plan and substitute it with 'rights, water delivery rights or irrigation rights'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. Amendment 20 - Schedule 2, item 74, page 29 (line 18) 64. This amendment would omit 'entitlements' from the proposed note to the definition of current additional HEW contribution in subsection S6A.06(2) of Schedule 6A to the Basin Plan and substitute it with 'rights, water delivery rights or irrigation rights'. This is a consequential amendment to reflect the broadening, under subsection 7.08B(1), of what can be specified as 'additional HEW entitlement' to cover water access rights, water delivery rights, irrigation rights, or parts of such rights. 11


ATTACHMENT Statement of Compatibility with Human Rights Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Amendments to the Water Amendment (Restoring Our Rivers) Bill 2023 The proposed amendments are 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 amendments The proposed amendments to the Water Amendment (Restoring Our Rivers) Bill 2023 (the Bill) would amend the Water Act 2007 (the Water Act) and the Basin Plan 2012 (the Basin Plan) to: • amend the objects of the Water Act and the purpose of the Basin Plan to ensure that the use and management of the Basin water resources takes into account spiritual, cultural, environmental, social and economic matters relevant to Indigenous people; • make minor amendments to expand the scope of the review into the Water for the Environment Special Account (WESA); • allow the Murray-Darling Basin Authority to make one-off adjustments to the cumulative balance for surface water sustainable diversion limit resource units for water accounting periods commencing on 1 July 2019, and • enable the Minister to specify, under section 7.08B of the Basin Plan, a broader range of rights that fall within the existing definition of held environmental water. This would provide the Minister with a broader range of options to increase the volume of Basin water resources that is available for environmental use by 450 GL per year and contribute to enhancing environmental ou1tcomes. Human rights implications The proposed amendment engages the right to self-determination in Article 1 of the International Covenant on Civil and Political Rights (ICCPR) and Article 1 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to self-determination The rights of people to freely determine their political status and freely pursue their economic, social and cultural development is contained in Article 1 of the ICCPR and Article 1 of the ICESCR. This right is a collective right applying to groups of peoples, in contrast to rights to culture which protect the rights of individuals within a group. 12


The proposed amendment promotes the right to self-determination for Indigenous people, and in particular Indigenous people in and surrounding the Murray-Darling Basin. The amendment would emphasise the importance of spiritual, cultural, environmental, social and economic matters relevant to Indigenous people by including it as an object of the Water Act and purpose of the Basin Plan. Therefore, the proposed amendment positively engages the right to self-determination under Article 1 of the ICCPR and Article 1 of the ICESCR. Conclusion This proposed amendment to the Bill is compatible with human rights because it promotes the protection of the human rights as set out above. Circulated by authority of the Minister for the Environment and Water, The Hon. Tanya Plibersek MP 13


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