Legislative Council, Thursday 9 November 2023 

Ms FORREST (Murchison) - Mr President, I thank the minister and the Leader. I appreciate the opportunity to go through this bill in detail. Whilst it seeks to achieve two main purposes, there are complexities within it. As with most amendment bills, you have to go back to the principle act to make sure that what is said to be achieved, is being achieved.

Maybe it is because I have been doing nothing else for the last few days, but I did not notice that an amendment had come through from the minister for the Government. I know it was sent, I do not dispute that for second - but if you see my inbox, you might understand why I might not have seen that one or focused my attention on it. There is obviously further debate to be had in the Committee stage on some of those matters, but I will broadly speak to the purpose of the bill.

As outlined, there are two main purposes: the supply of water for industrial use, we know is particularly around the expectation there will be renewable hydrogen production in Bell Bay region, and the community management of publicly-owned irrigation schemes.

I have been around for a long time in this place and I have seen the establishment of Tasmanian Irrigation and also some of the interesting statements by former premiers about being the food bowl of Asia, at one stage. I thought if we ever had any expectation we could feed Asia we are living in La La Land, let alone be the food bowl of Australia. However, irrigation assets around the state have been an enormously valuable investment and have enabled a far better use of much of our arable land for the purpose of food production and other uses.

We are very lucky in Tasmania to have a mostly reliable and significant supply of fresh, clean water. I believe it is 1 per cent of the land mass with 12 per cent of the rainfall on an average year. It is quite the envy of the nation, in that regard. We all know that water is vital for humans, but it is vital for our environment, and animals and plants. We are lucky in Tasmania to be in this situation where we can make decisions about the use of water that is not just for the purpose of keeping everyone alive basically, and ensuring the environment can be sustained.

I will not go into all the details because there will be more opportunity potentially in the Committee stage if we need to. I note that there is a requirement in the bill to ensure that there is a bit of a pecking order, if you like. I will repeat some of the minister's comments from her second reading speech, where she said:

The Government does recognise the need to regulate access to Tasmania's fresh water resources, to ensure they continue to support our natural values and provide a range of benefits Tasmanians expect.

There was always going to be competing demands and tensions, and that is not unrealistic. It has only been in relatively recent years that the environment has even got a look in here. We have seen some of the tragedies that can occur, particularly in the big island to the north, where water has not been well managed and the travesty that we have seen in the Murray-Darling Basin. That is a watercourse that goes over more than one state, which makes it even more complicated. It is vital we have good regulation for our water use and use it to its best potential, making sure that all uses are prioritised according to the long term future of the state, the people and the environment.

The minister went on to say:

The supply of water for industrial use will only be available within an irrigation district where a declaration is made by the minister with the agreement of the Treasurer, as the other shareholder minister. The declaration cannot be made if it would have detrimental impacts on existing water users and it may include conditions such as, what matters are to be covered in contract? The total volume of water to be supplied for industrial uses?

There is that requirement that irrigation, as I understood from the briefing, domestic use and irrigation first, irrigation second in priority, if you like, and then industrial use.

As we know, if you are going to invest a significant amount of money in an industrial purpose, such as a green hydrogen hub, there is an expectation that you will have surety of supply to make that viable and not have to have restrictions on that.

In some respects, it is not dissimilar to our energy supply where our major industries are the biggest users of energy. We saw how this played out when the BassLink cable went down for a period, and we were in a period of a drought. The drought is the point I am coming back to here. I know there were discussions with the major industries about not necessarily load shedding but certainly load reduction to try to manage through that period, and financial compensation to give effect to that, because there is an expectation. You have to cut back production you are being guaranteed under your contract, so much energy to undertake your role, and suddenly the state or your entity cannot provide it.

I have not seen the contracts because they are all commercially sensitive, but obviously there is an expectation that there is a surety of supply. When we come to this matter, in that surety of supply, for example, a green hydrogen hub will require in their contract, would that include - I am not asking for all the detail - but is it likely or will it include the capacity to compensate that industry should the state, TI, not be able to provide that water to them to meet the requirement basically contracted?

Mr Valentine - Are you saying for the third parties other than irrigators as well as irrigators in that?

Ms FORREST - I understand the industrial use is the last one in the chain to be guaranteed. As I understood from the briefing - if I am incorrect in this I am willing to have the minister correct me. The question I would like the minister to address is: how is the drought managed in this case where there is the inability to supply the guaranteed or the contracted amount, first to who, I understand to be at the end of the line, the industrial users? In their contracts is there likely to be financial compensation where it cannot be met? One would expect that would be not an unreasonable requirement. I understand that is how it works with our MOs with the energy. We all have to work on this together as a state. Everyone needs energy. You cannot turn off the power at the hospital. There are certain things you cannot easily turn off. We know what happens. South Australia knew what that was like once, when they had that massive storm go through and take out their transmission lines. OPTUS has a bit of an idea at the moment.

I also note in the bill that there is some future proofing to look at what may occur in the future. I had not contemplated an additional entity, in addition to Tasmanian Irrigation, coming in as an entity offering or undertakers for these services. 'Undertakers' is an interesting term to use. I do not criticise at all looking to the future as to what might occur then. I asked a question in the briefing. The minister might like to refer to that in her reply to the debate on clause 17 in 226B, subclause (3), where it says;

In deciding to make a declaration on subsection (1), the Minister is to take into account a criteria prescribed for the purposes of this section.

In the briefing we were informed this only related to new entries, there is no criteria or such, it is for the future. I would like the minister to respond to that.

Back to the water surety issue. The Government's vision for these changes as proposed in this bill is that water for industrial use is supplied through an irrigation district will in all cases be sourced from existing Hydro Tasmania allocations. It will not be made available at the expense of irrigators. That is the pecking order. In terms of our water management we charge Hydro Tasmania with, I am interested in their feedback in this process. There is often competition for the Hydro Tasmania water and contested views on how that could be utilised.

The other matter the bill deals with which is about establishing or having entities, the irrigation districts manage their own affairs. To repeat what the minister said:

The bill also provides a clear set of criteria which an eligible body must address in an application to request delegation of one or more functions.

As we discussed in the briefing, and as I recall from the establishment of Tasmanian Irrigation, it was to enable that process particularly. Where there were existing organisations running their own irrigation district, that could continue. Acknowledging not all new irrigation districts wanted to do that and were happy for Tasmanian Irrigation to manage theirs. Some may change their minds in the future. Some currently managed under Tasmanian Irrigation may change their position on this.

One critical element is the requirement for a proposed governance model. This requires the applicant to demonstrate they have the capability to perform and exercise the proposed functions, have sound mechanisms in place to ensure disputes within the irrigation district can be resolved effectively, and must estimate the costs and benefits of the proposed delegation of functions. There is a number of matters that sets out what the application has to include. When you go to provisions in the bill where it can be refused, it seems they only have to fail on one point and the delegation will be refused. Most of them are very serious matters. I am not saying that should not be fatal.

One of them was if they did not have a governance model or a governance - I cannot think of the wording. I made the point in the briefing that I hope when you are dealing with a group of farmers who are the beneficiaries and operators of an irrigation scheme, not all of them have a great deal of knowledge of corporate governance or governance frameworks generally.

Ms Rattray - They are all running businesses.

Ms FORREST - They are running businesses, but this is a whole new level. You are running your own business. You might need to dispute the resolution process on some farms, but it is much more complicated than many people think. There are plenty of small organisations, not just in the agricultural sector but across the board, who sometimes fall foul of not having a good governance framework. The question I raised in the briefing, and the minister may wish to comment on, is when the governance framework is being determined, will there be some support for them during that process? They are probably really good at understanding how the irrigation system needs to work. The functions, costs, the operation of an irrigation system and some of the other matters, they may need some guidance on. I assume it is not, 'Well, you have had one crack at this, you do not have an adequate governance framework, so, no'.

Mrs Hiscutt - There is not just one person when that delegation is made, it is to a committee.

Ms FORREST - That is why you need a good governance model. That is what I am talking about.

On the other matter, overall, a lot of this makes sense. The Labor Party has some amendments and I assume they intend to prosecute.

The member for McIntyre may speak on this - yes, you will. I am just checking she is up for it, that was all, having been to the dentist. I will let her go to the particular points of the Winnaleah Irrigation Scheme and the matters raised but it seems to me there may be a bit of confusion about this in how decisions are made and the process for making the decisions. As I understand it, the delegation is applied for to manage their own irrigation scheme or district, the process has gone through. There is a range of criteria and information that is needed to have an application worthy of being assessed. Tasmanian Irrigation will assess that and if it ticks all the boxes and does not undermine the overall system, as is described in the bill, then they almost have an obligation to award that delegation. However, if they want to nitpick around the edges for some reason and they decline or refuse it there seems to be this concern that it is Tasmanian Irrigation where the decision finishes.

There is an amendment from the minister to address some of this to make it clear - because it was not clear to me - that if an applicant is not happy, they can ask for the minister to review it. We know that the minister is the accountable person here. The people who sit in government businesses and state owned companies and departments are not, in that they are not held to account for decisions made.

However, it seems to me the way this outlined is that there is an absolute right to ask for a review of the minister. The minister can review it all and would seek advice and if the minister also refused there is an opportunity to go to TASCAT so there are rights of appeal. It is a slow and tedious process but rights of appeal, as I see it, do exist here. The claim that Tasmanian Irrigation should not be the body that makes the initial assessment is probably ill conceived in that they are the ones who understand how the system works together.

Could the minister explain that further to make it clear? I do not think it is clear from the second reading speech. Also, it was not clear without the proposed amendment from the minister and it certainly was not clear to the people who were involved in the Winnaleah Irrigation Scheme. We generally do not make legislation for one entity but this is not just one entity. There could be others who want to take over the management of ones that already exist or new ones that come in. It needs to be clear as to how that process works.

In broad terms, I support the intent of this. There are a few matters that need to be put on the record regarding the prioritisation of the precious resource that water is, but also that clarity about how that delegation works and the processes for review if an applicant feels aggrieved.