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Media Release - Ministers Office Sydney: 30 May 2005 KNOWLES WELCOMES INDEPENDENT STUDY ON BARWON DARLING CAP NSW Minister for Infrastructure, Planning and Natural Resources, Craig Knowles, has welcomed an independent socio-economic report into the proposed Barwon-Darling Cap which has found the Government’s 2005 proposal to be superior to that flagged in 2002.
The report, commissioned by the NSW Department of Infrastructure, Planning and Natural Resources and prepared by Hassall and Associates, looked at the socio-economic impacts of the proposed new Cap management Strategy (2005 strategy) and compared it to the previous Cap Management Option (2002 strategy).
“The NSW Government wants to ensure sustainable levels of water extraction so that farming businesses both up and downstream can survive.
“Many businesses, especially downstream around mid Darling, Menindee and Lower Darling will suffer if a Cap is not in place. It is designed to be fair for everyone,” said Mr Knowles.
“Sustainability will be achieved by ensuring the valley’s long-term average annual diversion is limited to no more than 173 GL, irrespective of which Cap Management Strategy is adopted.
A Cap Management Strategy was a requirement set by the Murray Darling Basin Ministerial Council in 1995, following concerns about the potential for unsustainable growth in water use that would impact socially and economically on all communities in the Basin. The MDBC Ministerial Council is made up of state governments in the Basin (NSW, Queensland, Victoria, South Australia and the ACT) and the Commonwealth Government.
“NSW is required to put the Cap in place,” Mr Knowles said.
“The independent report has indicated that the 2005 strategy will not only ensure a sustainable balance will occur, it will also benefit the region’s economy.
“Under the latest strategy, the region’s gross irrigated agricultural contribution to the regional economy will amount to $159.1 million a year in the first ten years of the strategy. That’s an increase of $3.5 million a year and an additional 14 jobs over that which would occur under the 2002 strategy in those initial 10 years,” Mr Knowles said.
“At the individual level, users will be impacted to different degrees, however, the 2005 strategy includes provisions that will significantly reduce the up-front impacts on active users and has an overall lesser impact on the users as a whole than the previous strategy (2002).”
In the past, irrigation entitlements were defined as the “maximum” amount that could be taken in any one year with no carryover of the unused portion. Under the new 2005 strategy entitlements will be defined as a share of an “average” use and will permit carryover.
“The decision to allocate new entitlements proportional to each user’s share of ‘quota’, rather than basing them on history of use, has followed community consultation. The Barwon Darling community had previously been unable to reach a consensus. As a result, the Government adopted the method used in all other developed valleys,” said Mr Knowles.
The report used four case studies simulated over a ten-year period (1992 to 2001) to arrive at the conclusion that in three of those cases, the 2005 strategy proved superior to the 2002 strategy for the initial 10 year period.
The report acknowledges that “long-term regional impacts are not significantly affected by the proposed changes as they simply modify the mechanisms through which future water diversions are constrained”.
“The 2005 strategy provides greater certainty to licence holders that their entitlements will not be modified further nor affected by the activation of other licences,” Mr Knowles said.
“It also provides greater flexibility in terms of business planning as account water can be saved or it can be traded instead of using it when poor commodity prices are poor.”
“What the Hassalls report shows is that the proposal is close to being right. With further adjustment and fine tuning, it will be right.”
Mr Knowles also said he welcomed recent interest from the Deputy Premier John Anderson.
“While I’m pleased that John Anderson has inserted himself in this issue, I’d like to see tangible evidence of what the Commonwealth Government intends to bring to the process.
“He also needs to be aware that equity is central to this issue – he can’t just enter the process and create false expectations. If the Commonwealth want to be involved then it has to be prepared to contribute – in a real and practical sense – to finding a solution which is workable and fair to all the valleys.”
Mr Knowles said that a meeting with key irrigators on 31 May would canvas options to further improve the current option.
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Media Contact: Kathy Connell 0419 239 178
© NSW Department of Infrastructure, Planning and Natural Resources
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