ACTING CHAIR (Senator Siewert)—I declare open this public hearing of the Senate Standing Committee on Rural and Regional Affairs and Transport. We are hearing evidence today in our inquiry into the impact on rural water usage of recent water policy initiatives. I welcome you here today. You have heard all this before so I do not think I need to go into any detail, but I just remind you that if you want to give any evidence in camera you need to tell the committee and we will decide whether to go in camera. We know that you have made a great effort to be here today, so thank you for coming. If you would like to make an opening statement we will then proceed to questions.
Dr Craik—We are happy just to respond to questions, but there is one thing I could mention first. Since the last time we were here the Australian government announced in the federal budget an extra $500 million for the Murray-Darling Basin Commission. One of the conditions of giving us that $500 million was that the states maintain their contributions in real terms for the next five years. The object of that extra money was to basically restore the rate of delivery of the programs that we had—the Living Murray Environmental Works and Measures Program, salinity programs and the Risks to Shared Water Resources Program—and to provide more money for the environmental works and measures program because costs have escalated: labour costs have gone up and put another $100 million or so in there. There was also additional funding for water recovery for the Living Murray. They were the three priorities that they put up. There were a number of other conditions but a major one was getting the states to agree to maintain their contributions in real terms for the next five years so we know that we have $1 billion over the five years to deliver our programs.
Senator NASH—We have had a number of hearings now, and up at Toowoomba recently we heard evidence from some representatives from Cubbie Station who referred to the Menindee Lakes as, I think, a basket case. Have you had an opportunity to read the transcript of that at all? Can you give us a picture of Menindee Lakes as you see it, positives and negatives, and perhaps comment on those comments, if you would like to.
Dr Craik—I did not actually see the bit calling it something like a basket case. I saw some other discussion, but I did not actually see that bit.
ACTING CHAIR—I think there were actually a number of witnesses who might have—
Dr Craik—I must not have got those pages.
Senator NASH—There was a lot of colourful language.
Dr Craik—Menindee is difficult because of the levels of evaporation—and the figure that our people generally use is around 300 gigalitres on average. The issue about Menindee is that it is not a commission asset. So it is not really a commission storage; it is a New South Wales State Water storage. It only comes under our bailiwick when levels of water get to over 640 gigalitres. When the water levels are falling I think we lose it at 380 gigalitres. I guess there is no particular incentive for New South Wales, even if there were water around, to get it up to 640 gigalitres because why would they not want to control it themselves rather than give it to the commission as a whole.
There is no doubt that, over the years, there have been a number of proposals to do things at Menindee—none of which seem to have really come to fruition. Clearly, supplying water to Broken Hill is a major issue—and keeping the amount of water in storage they do to make sure that they can supply Broken Hill is clearly an issue. I would think, and I guess this is a personal opinion because the commission has not actually expressed an opinion on it, that all jurisdictions in the commission are very pleased to see that New South Wales has called for a strategic review of the whole range of options to do with Menindee. The federal government has put in half the cost of that consultancy to do that work. I think the cost of the consultancy is something around $800,000. They want to review all the options, not only the structural options but also the operational options. They want to deal with the issue of Broken Hill’s water. So there is a study under way. I think Malcolm Turnbull put a press release out the other day saying that the contract is about to be let.
Senator NASH—So it is just happening now.
Dr Craik—Yes. We have someone on the technical committee and someone on the steering committee for that project. Every person you talk to has a different view about what would be best done with Menindee. My view is that the first thing that needs to be done is to deal with and fix up Broken Hill’s water supply, get it off the agenda and then look at what options there are. One of the other things that the commission are doing, which we are able to do because of the extra funding from the federal government, is an operational review of the lower Darling. It will go from the Menindee down to the Murray. We are doing a whole river operational review, and that is the first bit. I do not have a direct answer to what is the best option for what to do with it, but I think the way things are going now is the right way—doing a proper review of the whole thing and then coming up with the best range of options in terms of both operation and structures, and dealing with Broken Hill and seeing what we can really get out of it.
Senator NASH—I am going to ask what seems to be a simple question. It is actually a very complex question, but I am going to ask it anyway. We have heard conflicting evidence, and even before this inquiry I was getting conflicting views, about whether or not Cubbie Station was having an effect downstream. Do you have a view? I know it is a very difficult question.
Dr Craik—As best I understand it, what Cubbie has done has been done perfectly legally; there has been nothing illegal about it.
Senator NASH—No, I certainly was not saying that. I know that everything they have done has been completely within the realms of the things that they could do.
Dr Craik—As I understand it, if Cubbie were not there the water would get to Narran Lakes but it would not get to the floodplain further down from Narran Lakes. While that would get birds to breed—I think this is correct—they feed on the floodplain and it would not actually get there. That is what I understand, but I am no expert on that and I have some difficulty finding my way through that one. I guess the real issue is: if it were not there, what would happen to the water? I guess some decisions would need to be made about that.
Senator NASH—Indeed.
Senator JOYCE—If, instead of one place there, we had 15 different places and they all used the same water, people would not talk about Cubbie Station; it would just be a fact of life—there would be people who had licences and were using water. This view that there is a pulse and that 10 millimetres falls at Warwick and ends up in South Australia obviously is flawed, and we are always fighting it. It does not work like that. As you said, it goes to Narran Lakes and the vast majority evaporates.
Senator NASH—Can I ask about the issue of states and borders. How do you see the states at the moment in terms of cooperation, reaching objectives and the idea of having federal control over water and, I guess, do