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Outcome 4 - Adapting to a future with less water

Adaptation to climate change, wise water use, secure water supplies and improved health of rivers, waterways and freshwater ecosystems by supporting research, and reforming the management and use of water resources.

Main responsibilities for this outcome

Continuing the national program of water reform, including implementation of the National Water Initiative, to achieve better planning of the functions of water markets, and new Murray-Darling Basin institutional arrangements Delivering infrastructure investment programs, to increase the efficiency of rural water use and prepare irrigation communities for a future with less water Acquiring and managing water entitlements for the environment to improve the long-term health of the rivers, wetlands and floodplains of the Murray-Darling Basin, which will also assist the transition to lower diversion limits expected under the Murray-Darling Basin Plan Helping secure water supplies for towns and cities and assisting households and businesses to use water more efficiently Assisting states, territories and landowners to improve their management of rivers and wetlands, particularly sites of international and national importance Implementing other water-related measures as required by the government, such as further development of the National Water Quality Management Strategy and management of the Water Efficiency Labelling and Standards (WELS ) scheme

Water Group: Water Efficiency, Water Reform and Water Governance Divisions

Highlights

• The Commonwealth water purchasing program to 30 June 2010 secured the purchase of 863 gigalitres of entitlements, which over the long term will provide, on average, 591 gigalitres for the environment each year. Once the Commonwealth's ownership of these entitlements is formally recognised on the state water registers, they become part of the Commonwealth's water holdings managed by the Commonwealth Environmental Water Holder.
• In 2009-10, 187 gigalitres of Commonwealth environmental water was made available for use in 29 rivers, wetlands and floodplains in New South Wales, Queensland, South Australia and Victoria. This brought to 178 gigalitres the total volume of water so far made available to rivers, wetlands and floodplains of the Murray-Darling Basin as a result of the Water for the Future initiative.
• Significant progress was made in developing a smoothly-functioning water market through the introduction of Water Market rules under the Water Act 2007, which gives enhanced business flexibility to water users.
• With support from the department, CSIRO delivered reports commissioned by the Council of Australian Governments (COAG) on sustainable yields in northern Australia, Tasmania and south-west Western Australia. These reports were released to the public and briefings were conducted for stakeholders. The reports are being used to assist water managers and users in planning.
• The roll-out of rural water infrastructure to improve water efficiency both on and off-farm stepped up, with successful first round projects announced for the On-Farm Irrigation Efficiency program and the New South Wales Private Irrigator Infrastructure Operators program.

Objectives

The department's objectives in water reform, as set out in the Portfolio Budget Statements for 2009-10, were to continue to implement the 2004 National Water Initiative and the 2008 Intergovernmental Agreement on the Murray-Darling Basin. Pursuant to the government's Water for the Future initiative, the department sought to:

• deliver the national program of water reform and effective water markets so that scarce water is efficiently allocated to the most productive uses for all Australians, the environment and the nation
• help improve the efficiency of rural water use so that irrigation communities can better adjust to a future with less water
• assist the transition to lower diversion limits expected under the Basin Plan, by acquiring water entitlements in the Murray-Darling Basin
• help secure water supplies for towns and cities and helping households and businesses to use water more efficiently
• help achieve healthy rivers and wetlands by acquiring water for the environment and use the Commonwealth's environmental water holdings to protect and restore the rivers and wetlands in the Murray-Darling Basin, and
• assist states, territories and landowners to improve their management of rivers and wetlands.

Results

National Program of Water Reform

• Introduced rules to allow irrigators in the Murray-Darling Basin to transform their water rights into a title that can be freely traded without needing to seek the approval of the irrigation system operator (Water Market Rules). Other rules introduced ensure termination fees are not a barrier to termination (Water Charge (Termination Fees) Rules). Regulations were also developed with the Basin states to ensure a more consistent approach to regulating water charges across the Murray-Darling Basin for the benefit of water users and providers.
• Launched the National Water Market System portal to provide a single source of information about the water market.
• Achieved, through COAG, in-principle agreement to the National Framework on Water Compliance and Enforcement.
• COAG agreed to the National Framework for Non-urban Water Metering to provide a consistent framework for non-urban water meters and enable the implementation of national metering standards. Most state implementation plans required under the framework have been completed. Two metering test facilities were constructed.
• COAG also agreed to a national skills strategy to promote and oversee a nationally coordinated effort to address the skills shortage in the water sector. The key issue and focus of the strategy is to determine how to encourage and work with industry to build demand for, and uptake of, training, so that the water sector can take full advantage of the pre-existing opportunities available through government programs.
• Supported the Water Recovery and Environmental Use Stakeholder Reference Panel and the National Irrigation Efficiency Stakeholder Reference Panel, which each met twice during the year, and the Urban Water Stakeholder Reference Panel, which met three times.

In Rural Areas

• Arranged meetings between the minister, the parliamentary secretary and senior departmental officials and stakeholders throughout the Murray-Darling Basin.
• Held 23 community information sessions in the Murray-Darling Basin involving 1,596 people.
• Announced $100 million to six projects covering 360 farms in the first round of the On-Farm Irrigation Efficiency program. The works including improving the efficiency of flood irrigation systems, upgrading drip and spray irrigation, installing soil moisture monitoring and various other irrigation technology upgrades. The projects are estimated to save 60 gigalitres of water entitlement.
• Announced up to $101 million for irrigation infrastructure upgrades, to save 21 gigalitres of water entitlement in the Coleambally and Murrumbidgee irrigation districts of NSW under the Private Irrigation Infrastructure Operators program.
• Announced up to $162 million for irrigation infrastructure upgrades, to save 48 gigalitres of water entitlement in the Marthaguy, Tenandra and Trangie-Nevertire irrigation districts in the Macquarie River catchment of NSW under the Private Irrigation Infrastructure Operators program.
• Completed the first state priority project under the Murray-Darling Basin Intergovernmental Agreement of July 2008 - an integrated set of pipelines, supplying potable and irrigation water to communities around the Lower Lakes in South Australia.

In Urban Areas

• Provided $25 million to 12 local councils in the Murray-Darling Basin under the Strengthening Basin Communities program for urban water saving initiatives to reduce demand on potable water supplies. A further $14 million was allocated to various consortiums of 98 councils in the Murray-Darling Basin, to undertake 37 projects to assess the risks and implications associated with climate change, with a particular focus on water availability, and then to review plans or develop new ones.
• Awarded funding to 13 stormwater projects under the National Urban Water and Desalination Plan after two funding rounds. A number of stormwater projects have also been funded under other departmental programs, including Water Smart Australia, the National Water Security Plan for Cities and Towns program, and the Green Precincts Fund.
• Awarded $78.5 million to 36 projects in towns with fewer than 50,000 people to improve urban water security and use water saving measures to reduce demand on potable water supplies, under the National Water Security Plan for Cities and Towns program.
• Funded the establishment of a Centre of Excellence for Water Recycling in Brisbane, which will help to develop and commercialise new water recycling technologies.
• Completed the Glenelg to Adelaide Parklands water recycling project in South Australia, which was funded under the National Urban Water and Desalination Plan. It will provide up to 5.5 gigalitres of recycled water mainly for use on Adelaide parks and gardens.
• Increased the number of product models registered with the Water Efficiency Labelling and Standards (WELS ) scheme to 13,949 and completed a Regulation Impact Statement for the possible introduction of minimum water efficiency standards for clothes washing machines and water efficiency labelling for combined washer-dryers that use water in dryer mode. The Environment Protection and Heritage Council (EPHC) is expected to consider the Regulation Impact Statement in 2010-11.
• Approved $9.1 million in funding for three new Water Smart Australia projects in New South Wales and Victoria. The projects involve constructing and upgrading infrastructure to deliver water savings, and secure future water supplies for the environment, farmers and local communities.
• The National Rainwater and Greywater Initiative provided 8,365 rebates, totalling $4 million in the reporting year.

Healthy rivers and wetlands

• Increased by more than 12 times the amount of water the Commonwealth has made available to rivers, wetlands and floodplains in the Murray-Darling Basin in 2009-10. This took the total amount so far allocated to the environment as a result of Water for the Future to 178 gigalitres. This includes the largest single allocation of 40 gigalitres of Commonwealth environmental water to Yanga National Park on the Lowbidgee Floodplain in New South Wales in the first half of 2010.
• At the Coorong, Lower Lakes and Murray Mouth, assisted South Australia with the cost of:
  • development of the long-term plan that was released in June 2010
  • the Goolwa Channel Water Level Management project to reduce the risk of acidification
  • maintaining water levels in Lake Albert to reduce acidification risk, dilution of hypersaline water in the Coorong South Lagoon, bioremediation and revegetation, managing acid sulphate soil hotspots
  • several thousand hectares of aerial and machine seeding on the exposed lake beds, propagation of seedlings, pest management and fencing to keep stock off the revegetated areas
  • continuing the rolling review of the status of Australia's Ramsar sites. Consultants were commissioned to develop site-specific site status forms, pilot the review at 20 sites, and to develop site-specific threat conceptual models to identify suitable indicators to include in the site status forms. The consultancy has delivered individual site status form templates for all Ramsar sites, populated site status forms for 20 pilot sites, and a final report including: documentation of the process and issues encountered; recommendations for future rollout; and analysis of sites with completed site status forms. A project to complete the rolling review at the remaining 44 sites began in May 2010.

Strategies

• The National Water Initiative, the blueprint for national water reform endorsed by all Australian jurisdictions in 2004, aimed to achieve a nationally compatible market, regulatory and planning-based system of managing surface and groundwater resources that optimised economic, social and environmental outcomes in rural and urban areas.
• Water for the Future was the Australian Government's 10-year national agenda for water reform, consistent with the National Water Initiative, and built on four key priorities: taking action on climate change; using water wisely; securing water supplies; and supporting healthy rivers.
• The Water Act 2007 provided the legislative framework for the implementation of many elements of the National Water Initiative, including the establishment of the Murray-Darling Basin Authority (MDBA).
• This was supported by the 2008 Intergovernmental Agreement on Murray-Darling Basin Reform, signed by the Basin states, the Australian Capital Territory and the Australian Government; and bilateral water management partnership agreements between the Australian Government and each Basin state.

Strategic approach in 2009-10

National institutional reforms

The department worked with key partners to implement new management and information frameworks for the entire Murray-Darling Basin, including the:

• Murray-Darling Basin Authority to deliver a Basin Plan in 2011, which will include: new sustainable diversion limits; sustainable limits on surface and groundwater use; allowance for critical human water needs of communities that use water from the Murray River and its tributaries; an environmental watering plan; and a water quality and salinity management plan.
• Australian Competition and Consumer Commission to provide advice on water market, charge and trading rules, as well as monitor and enforce the market and charge rules. Bureau of Meteorology to develop national water information systems and the national water account.
• National Water Commission to conduct audits to confirm that water plans are implemented, including auditing the effectiveness of the implementation of the Basin Plan.

The department worked with states and territories to improve urban water security through an urban water reform agenda, agreed to by COAG.

In Rural Areas

Irrigators across Australia are facing a future with significant reductions in water availability. This is a result of a combination of factors, including: prolonged drought; climate change; and efforts to return surface and groundwater systems to sustainable levels of extraction.

The department is assisting the transition to lower diversion limits expected under the Basin Plan through:

• increasing the efficiency of water use in irrigation through the $5.8 billion Sustainable Rural Water Use and Infrastructure program. A proportion of the water savings from infrastructure projects on- and off-farm will be retained by irrigators for productive use
• purchasing water entitlements for the environment to improve the health of the Murray-Darling Basin's rivers and wetlands, through the $3.1 billion Restoring the Balance in the Murray-Darling Basin program. This program continued in 2009-10 and the tenders attracted considerable interest from entitlement holders. At 30 June 2010 water purchases under the program had secured 863 gigalitres of water entitlements worth $1.262 billion.

A stakeholder engagement strategy was adopted, targeted primarily at regional irrigators, local and state governments, peak agricultural and conservation organisations and natural resource management bodies. The strategy has provided the opportunity for the department to draw on stakeholder knowledge and to build stakeholders' capacity to participate in, adapt to, and implement planning processes and programs. Feedback from the community information sessions indicates these have improved awareness and understanding of Water for the Future and provided a welcome opportunity for community members to engage with policy-makers. The sessions have also given senior DEWHA officials a better understanding of public concerns.

National Partnership Agreements were signed to implement Stage 3 of the Great Artesian Basin Sustainability Initiative. In 2009-10 the Australian Government provided $3 million to the Queensland Government to implement Stage 3 in that state.

In Urban Areas

The department continued to deliver existing programs, in particular Water Smart Australia that encourages the development and adoption of new technologies and practices in water use.

Through the National Water Security Plan for Cities and Towns program, funding of $254.8 million over five years is being provided to cities and towns with fewer than 50,000 people, to upgrade older pipes and water systems, to install new infrastructure and for practical projects to save water and reduce water losses. This includes projects under the COAG Strategy on Water and Wastewater Services in Remote (including Indigenous) Communities.

The COAG Strategy aims to provide: sustainable, secure and safe water supplies and wastewater services; a level of service that meets the regulatory standards that would apply to any other community of similar size and location; and encouragment for responsible use of water and, where appropriate, water conservation.

Healthy rivers and wetlands

Helping to improve the management of freshwater aquatic ecosystems across Australia was a priority. The department led the development of national policies on implementing the Ramsar Convention, river health, and aquatic ecosystems (including developing a national framework for High Conservation Value Aquatic Ecosystems). It also supported the development of water quality improvement plans for coastal hotspots, and building public awareness and support for wetlands nationwide. National policy is developed through working groups under the Natural Resources Management Ministerial Council.

The environmental health of the aquatic ecosystems in the Murray-Darling Basin continued to be affected by the long-term alteration of natural water flows, exacerbated by drought. The department addressed this issue through the management and use of the Commonwealth's environmental water holdings. The holdings are managed by the Commonwealth Environmental Water Holder using a science-based approach and through cooperative arrangements with state jurisdictions as well as site managers and others in the local community (see the annual report of the Commonwealth Environmental Water Holder following this chapter).

A total of $308.8 million is budgeted for water purchases for 2010-11. This funding will provide more water to protect and restore the environmental assets of the Murray-Darling Basin.

Evaluation

The department delivered a high proportion of the administered appropriations for water reform through projects and grant schemes. Each project plan included strategies for monitoring and evaluating progress against milestones, and for judging success when projects are completed. All projects were monitored by a high-level project board, with the highest risk projects reported quarterly to the department's Executive Management Group. The department continued to invest resources in training for project managers and their staff and to embed best-practice project management, governance and risk management.

Individual programs within Water for the Future were subject to internal and external performance audits. For example, a performance audit of the $1.6 billion Water Smart Australia program by the Australian National Audit Office (ANAO), concluded in February 2010 that: "Overall, the program has been administered effectively…" There were no recommendations for management improvements.

The department largely achieved the targets set in the Portfolio Budget Statements 2009-10, as set out in the table of key performance indicators. There were progress audits during 2009-10 of state priority projects identified under the 3 July 2008 Intergovernmental Agreement on Murray-Darling Basin Reform (Murray-Darling Basin IGA). Key outcomes were a commitment by all states to finalise the Bilateral Agreements under the Murray-Darling Basin IGA, which included agreement to reforms and agreement on milestones for the delivery of business cases for state-led priority projects.

In 2009-10 the Commonwealth Environmental Water Holder published an inaugural environmental water outcomes report, describing preliminary results from the first year of Commonwealth environmental watering in 2008-09. While the outcomes of environmental water use take some time to materialise, initial monitoring results showed positive signs of improvement, such as improved tree growth, decreased salinity and benefits to a range of plants and animals.

Results for deliverables and key performance indicators

Program 4.1: Water Reform

Deliverables DEWHA will work with states and territories and partner organisations involved in Water for the Future to improve how water is used and managed		2009–10 Results
A National Program of Water Reform Assist the government to identify and deliver necessary policy and administrative reform of the way water is managed at the national, state and territory, basin and community level		New Water Market Rules. New Water Charge (Termination Fees) Rules. National Water Market System portal launched. In-principle agreement by COAG to the National Framework for Compliance and Enforcement Systems for Water Resource Management. COAG agreed to the national Framework for Non-urban Water Metering. COAG agreed to the National Water Skills Strategy.
In Rural Areas Assist in the transition to a lower diversion limit expected under the Basin Plan by purchasing water entitlements for use by the Commonwealth Environmental Water Holder Invest with states, territories and industry to improve rural water use efficiency and water quality outcomes Assist through these programs in the transition to a new sustainable diversion limit in the Murray-Darling Basin		Continued to purchase water entitlements for the environment, bringing the total to 863 gigalitres of water entitlements. Minister for Water met stakeholders throughout the Murray-Darling Basin. Held 23 community information sessions in the Murray-Darling Basin involving 1,596 people. Water Recovery and Environmental Use Stakeholder Reference Panel met twice and Urban Water Stakeholder Reference Panel met 3 times. First round of the On-Farm Irrigation Efficiency program awarded $100 million to 6 delivery partners covering 360 farms for irrigation infrastructure upgrades. Private Irrigation Infrastructure Operators program awarded $101 million for irrigation infrastructure upgrades. First state priority project under the Murray-Darling Basin Intergovernmental Agreement was completed for pipelines supplying potable and irrigation water to communities around the Lower Lakes in South Australia.
In Urban Areas Invest with states, territories and the private sector in infrastructure to provide greater water security, and deliver projects and initiatives that will help all Australians use water more wisely		Provided $25 million to 12 local councils for urban water saving initiatives to reduce demand on potable water supplies in the Murray-Darling Basin. Provided $14 million to 98 councils for 37 projects to assess the implications of climate change and to review plans or develop new ones. Funded 13 stormwater projects. Awarded $78.5 million to 36 projects to improve urban water security in regional towns. Established the Centre of Excellence for Water Recycling in Brisbane. Completed the Glenelg to Adelaide Parklands water recycling project - 5.5 gigalitres of recycled water for Adelaide parks and gardens. 13,949 product models now registered with the Water Efficiency Labelling and Standards (WELS ) scheme. 8,365 rebates, totalling $4 million, were provided in 2009-10 under the National Rainwater and Greywater Initiative.
Healthy rivers and wetlands Through the Commonwealth Environmental Water Holder, to manage the Commonwealth environmental water holding to help protect and restore the health of rivers and wetlands With states, territories and private landowners, deliver water reforms, projects and improved practices that aim to address specific environmental problems		Continued to purchase water entitlements for the environment, bringing the total to 863 gigalitres of water entitlements. Increased more than 12-fold to 165 gigalitres in water applied to 29 sites. 40 gigalitres watered Yanga National Park on the Lowbidgee Floodplain in NSW. Funded a long-term plan for the Coorong, Lower Lakes and Murray Mouth, and a business case for future funding. Funded the Goolwa Channel Water Level Management project and also the maintenance of water levels in Lake Albert to reduce acidification risk. Implemented the Bioremediation and Revegetation project with aerial and machine seeding on several thousand hectares of exposed Lower Lake beds, propagation of seedlings, pest management and fencing to keep stock off revegetated areas. Started the last stage of the rolling review of the status of Australia's 44 remaining Ramsar sites.
Deliverables	2009–10 Budget target	2009–10 Results
Efficiency of rural water use:
Commonwealth led programs under the IGA (projects on schedule)	Yes	100% (2 out of 2 on schedule)
State led programs under the IGA funded by the Commonwealth (projects on schedule)	Yes	85% (11 out of 13 on schedule)
Other projects for rural water use (projects on schedule)	Yes	79% (11 out of 14 on schedule)
Secure water supplies for cities and towns, remote communities and businesses:
Recycling, desalination and stormwater harvesting projects	Approved projects started	100% (5 out of 5 approved projects started)
Centres of Excellence for Desalination and Water Recycling	Centres established	100% (2 out of 2 centres established)
Other approved urban project commitments	Approved projects started	95% (20 out of 21 on schedule)
Help households and businesses use water more efficiently
Green Precincts	All projects commenced	100% (13 out of 13 projects on schedule)
Assist states, territories and landowners improve the collective management of rivers and wetlands
Ramsar sites' ecological character descriptions [%]	100% for Commonwealth managed, 60% for others	Achieved

Key Performance Indicators To assist the government implement its policies and programs, including working with its partner governments through COAG and relevant ministerial councils, contributing to: responding to climate change, using water wisely, securing water supplies, and healthy rivers and waterways. Performance against this measure is outlined below:		2009–10 Results
A National Program of Water Reform Policy and administrative reform will allow water to be allocated efficiently to its most productive uses, and ensure that users pay the full economic costs of the water that they use.		COAG agreed to a National Skills strategy, a national framework for non-urban water metering and in-principle to a new compliance and enforcement framework. The minister introduced rules to transform Murray-Darling Basin water rights into titles that can be more freely traded, and removed several key barriers to trade. The National Water Market System portal website was launched. In-principle agreement by COAG to the National Framework for Compliance and Enforcement System for Water Resource Management
In Rural Areas Investment in irrigation modernisation will help place irrigation on a more sustainable, water efficient footing, and provide water savings for environmental use. The purchase of water entitlements from willing sellers will help restore a more sustainable balance between environmental and extractive uses. It will also help smooth the transition for irrigators to lower diversion limits expected under the Basin Plan.		Signed National Water Partnership Agreements with the Murray-Darling Basin States, under which the Australian Government will fund a range of projects to deliver more efficient use of rural water in return for agreed reforms. Purchased additional water entitlements through the Restoring the Balance in the Basin program, bringing the total to 863 gigalitres. Continued to roll out projects for improving the efficiency of rural water infrastructure. Acquired 938 megalitres of water entitlement for environmental use through rural water infrastructure projects.
In Urban Areas New sources of supply and efficient water use will lead to greater security of supply.		Funded 13 stormwater projects. Established a centre of excellence for water recycling. Continued to announce and roll out projects under the National Water Security Plan for cities and towns, the National Urban Water and Desalination Plan, Water Smart Australia and other urban programs.
Healthy rivers and wetlands Environmental watering outcomes and improved management of the environment will lead to healthier rivers and wetlands.		The environmental water acquired by the Commonwealth will deliver, in an average year, 591 gigalitres of environmental water. 165 gigalitres of environmental water was made available for use at 29 rivers, wetlands and floodplains in the Murray-Darling Basin. An inaugural environmental water outcomes report detailing the initial ecological benefits evident from the Commonwealth's environmental watering program was published. Contracts for the delivery of ecological character descriptions now cover all 85 Ramsar sites. Rolled out a series of projects in the Coorong, Lower Lakes and Murray Mouth to maintain water levels and address specific ecological problems.
Key Performance Indicator	2009–10 Budget Target	2009–10 Results
Rural water project efficiency
Off-farm efficiency [% increase]	0	0
On-farm efficiency [% increase]	0	0

Resources

Refer to Appendix 2: Resources for Outcomes - Expenses and Resources for Outcome 4.

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