Commonwealth of Australia Explanatory Memoranda

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                           EXPLANATORY MEMORANDUM

               (Circulated by authority of Senator N Xenophon)


   1. Background
      The purpose of this bill is to ensure the environmental and economic
      sustainability of the Murray-Darling Basin by empowering the Minister
      and the Murray-Darling Basin Authority (the Authority) to establish an
      Interim Basin Plan as an emergency measure, until such time that a
      Basin Plan is adopted under the Water Act 2007.  In so doing, the
      Minister is empowered to make decisions about how best to allocate
      water for system maintenance, to the environment, to water users and
      holders of a water access entitlement of a water access right, and to
      share, manage and allocate the Basin water resources as well as manage
      all processes that may adversely affect them.

   2. Commencement
      This Act commences on the day on which it receives the Royal Assent.

   3. Objects
      The objects of the Act are to empower the Minister and the Authority
      to address the current crisis affecting the Murray-Darling Basin as an
      emergency measure as outlined above.

   4. Interpretation
      Clause 4 refers the interpretation of words in this bill back to the
   Water Act 2007.

   5. Schedule(s)
      Clause 5 provides for schedules amending existing legislation (see
      Schedule 1 below).

   6. Powers of Minister in relation to management of Basin Water Resources
      Clause 6 provides the Minister with the powers required to determine
      whether an Interim Basin Plan is required as an emergency measure to
      apply until such time that he or she approves a Basin Plan consistent
      with the Water Act 2007.

   7. Where the Minister has determined that such a plan is required, clause
      7 of the bill empowers the Minister to direct the Authority to prepare
      an Interim Basin Plan.  It provides that where such a direction is
      given, the Authority must prepare an Interim Basin Plan within 30 days
      of that direction.  An Interim Basin Plan prepared by the Authority
      must include any determination made by the Minister under clause 9, 10
      or 11 of the bill.

   8. Approval of Interim Basin Plan
      Clause 8 empowers the Minister to approve an Interim Basin Plan
      prepared by the Authority either in its original form or in an amended
      form.  It also empowers the Minister to approve an alternative Interim
      Basin Plan.  Where the Minister amends the Authority's Interim Basin
      Plan or prepares an alternative Interim Basin Plan, he or she must
      consult the Authority.  In these circumstances, the Minister is also
      required to table an explanation of the reason(s) why he or she did
      not approve the Interim Basin Plan in its original form.

   9. Matters that may be determined by the Minister
      Clause 9 provides matters that the Minister may determine in order to
      give effect to an Interim Basin Plan.  It also requires the Minister
      to have regard to matters set out in clause 12 when making a

  10. Sharing Regime
      Clause 10 relates to the allocation of water for essential system
      maintenance after an Interim Basin Plan is approved.  The purpose of
      this clause is to ensure that, in making a determination pursuant to
      subsection 9(1), the Minister determines the share of water that is
      needed to maintain essential system functions and to maintain water
      quality, the share of the remaining non-flood water to which a Basin
      State is entitled and the share, if any, to be granted to the
      environment as a clearly identifiable and inalienable entitlement to a
      water allocation in the water resource plan area.  One of the effects
      of this clause is to treat the Basin States and the environment as
      separate and distinct shareholders of Basin water resources.

  11. Activities inconsistent with international agreements
      Clause 11 enables the Minister to determine that certain activities
      are inconsistent with relevant international agreements as defined in
      the Water Act 2007.

  12. Matters to which Minister must have regard when making a determination
      Clause 12 provides matters to which the Minister must have regard when
      making a determination under the bill.  These include, the principles
      set out in the National Water Initiative, critical human needs,
      environmental needs and obligations including international
      obligations, community needs, efficient market processes, maintaining
      permanent plantings, relevant international agreements, the effects of
      adverse climate change and the need for any adjustment burden to be
      shared equitably across the Murray-Darling Basin,  the need for
      economically efficient water use and investment, other benefits
      available to particular users of the Basin water resources, the need
      to prevent activities that contribute to the improper use, storage and
      diversion of water and any other matter which the Minister considers

  13. Constitution of Authority for the purposes of implementing the bill
      Clause 13 sets out the constitution of the Authority for the purposes
      of implementing the bill.  In addition to a Chair and 4 other members,
      the Authority is to include a Chief Executive Officer, and that
      position is provided for in Schedule 1 of the bill.

      Clause 13 also enables the Chair and members of the Authority (who may
      otherwise be appointed on a part-time basis under the Water Act 2007),
      to be appointed on a full-time basis for the purposes of developing
      and implementing an Interim Basin Plan.

  14. Powers of Authority in relation to implementation, compliance and
      enforcement of Interim Basin Plan
      Clause 14 sets out that the Authority is responsible for implementing
      an Interim Basin Plan as approved by the Minister.  Further, it
      provides that for the purposes of investigating compliance with and
      enforcing an Interim Basin Plan, the Authority is to have the same
      enforcement powers as it has under the Water Act 2007 and the same
      enforcement powers as the ACCC and the Minister under the Water Act
      2007, except to the extent of any inconsistency.

  15. Trade and Commerce
      Clause 15 provides that no natural person or agency of a State may
      limit or impede the transfer or sale and purchase of water access
      entitlements, water access rights and water allocations among Basin

  16. Inconsistent State or Territory actions
      Clause 16 proscribes States and Territories from acting in a manner
      inconsistent with an Interim Basin Plan or a determination made in
      accordance with the provisions of the bill.

  17. Activities by constitutional corporations
      Clause 17 outlines activities which constitutional corporations, their
      employees and agents are prohibited from undertaking without the
      consent of the Minister. Those activities all relate to impeding the
      flow of water from the Murray-Darling Basin or taking part in any
      activity that diverts or significantly intercepts water from the

  18. Acquisition of property
      Clause 18 empowers the Minister to acquire a proportion or all of a
      water access entitlement and water access right in a water resource
      plan area or, any land associated with an acquired water access
      entitlement or an acquired water access right if appropriate, for the
      purposes of maintaining the reliability of water access entitlements
      and water access rights or returning water use to sustainable limits.

  19. Declaration of taxation schemes detrimental to management of Basin
      water resources
      Clause 19 deals with taxation schemes that are detrimental to the
      management of Basin water resources.  It provides that the ACCC must
      inquire into the effects of arrangements in the Income Tax Assessment
      Act 1997 on the water market and into the nature of irrigation
      practice and investment and provide advice to the Minister based on
      the outcome of the inquiry.  Where the Minister determines that a
      taxation scheme is detrimental to the management of the Basin water
      resources, he or she is required to cause a copy of that determination
      to be provided to the Treasurer who, in turn, is required to prepare a
      response to the determination which must be laid before both Houses of
      Parliament within a specified timeframe.

  20. Failure to comply with Interim Basin Plan made under this Act
      Clause 20 stipulates the effects of failing to comply with a
      determination made under the bill.  It provides the Minister with the
      power to assess the impact of the failure of any Basin State on other
      shareholders and the quantitative effect of that failure to comply on
      the Basin water resources and to reduce the Basin's State share in the
      Basin water resources.  Where the Basin State continues to fail to
      comply with a determination, the Minister must apply for an injunction
      against the Basin State in accordance with the Water Act 2007.

  21. Inconsistent Commonwealth laws
      Clause 21 provides that where a provision of the bill is inconsistent
      with a provision of any other law of the Commonwealth, the relevant
      provision of the bill prevails, and the other law is, to the extent of
      the inconsistency, invalid.

  22. Application of Legislative Instruments Act 2003
      Clause 22 relates to the application of the Legislative Instruments
   Act 2003.

  23. Annual Reports by Minister
      Clause 23 requires the Minister to prepare, and lay before each House
      of the Parliament, an annual report on the operation of the bill.

  24. Regulations
      Clause 23 provides for the making of regulations.

   Schedule 1
      Schedule 1 amends the Water Act 2007, for the purposes of appointing a
      Chief Executive Officer to the Authority.  It sets out the duties of
      the Chief Executive Officer as well as all other matters related to
      his or her appointment.


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