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Legislative Assembly for the ACT: 1998 Week 10 Hansard (26 November) . . Page.. 3098 ..

MS TUCKER (continuing):

There is also the technical problem that you cannot just buy an allocation of water here and expect to take out the same amount of water downstream from the ACT, as water is lost as it flows downstream through evaporation and underground seepage. Nobody seems to have worked out yet how this will be accounted for in a water market. There is also the problem that the Government cannot establish environmental flows in the ACT in isolation of what is happening upstream and downstream in the Murrumbidgee River in New South Wales. For example, it would be pointless if the ACT set high environmental flows only to have that extra water extracted downstream in New South Wales if it sets lower environmental flows. There really needs to be a cross-border approach to the environmental flow issue across the Murrumbidgee catchment.

Given that most water supplied to ACT residents comes from ACTEW, which is still a government-owned monopoly for water, is there really a need to establish an ACT water market? What seems more likely is that this Bill is just setting the stage for the Government's grand plan to have a privatised ACTEW compete with other companies to sell water, as is already happening with electricity.

Setting up a trade in water in a localised catchment between competing water users, such as farmers, may be workable in determining an efficient allocation of water, but it is very unclear how such a market could work across the vast Murray-Darling Basin. Here there is a need to balance water supply across a range of water users, as well as maintaining sufficient water in wetlands and lakes, et cetera, for birds and aquatic wildlife. These are issues that we think governments should resolve and be held accountable for, not markets.

Despite the pronouncements that this Bill is necessary to implement COAG agreements on water reform, these agreements were more in the form of principles to be applied, and the States have not yet worked out how an interstate market in water is going to work in practice. I am certainly not prepared to support this Bill setting up an untested water market until much more work has been done on understanding the ecology of the Murray-Darling Basin and of the human impact on that ecology, and on determining the best way of managing water use across State borders to reduce those impacts.

I note that the Urban Services Committee mentions in its report that other States have tried to use regulatory licensing, but with limited success, and that they are changing to allocation models. What the committee does not mention is that the use of water in the ACT is quite different from the other States. Most water use in the ACT is for urban uses and is supplied through one utility, ACTEW. The other States, however, have to deal with a wider range of water uses, for example, irrigation and industry, and have to manage much larger catchment areas and a range of water supply infrastructures in different areas. The ACT does not really need an internal market for water, and it seems we are only doing this to participate in an eventual New South Wales water market.

There appears to be an assumption that the ACT has lots of spare water that we could sell off to the surrounding regions for a quick buck, but this approach ignores the need for long-term management of our water to ensure reliable supply, and also the environmental need to encourage the conservation of water in the region, not its increased use.

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