STANDING COMMITTEE ON PUBLIC ADMINISTRATION
GOVERNANCE OF WESTERN AUSTRALIA’S WATER RESOURCES
TRANSCRIPT OF EVIDENCE TAKEN
AT PERTH
WEDNESDAY, 1 NOVEMBER 2006
Members
Hon Barry House (Chairman)
Hon Ed Dermer (Deputy Chairman)
Hon Matthew Benson-Lidholm
Hon Vincent Catania
Hon Helen Morton
______
Public Administration Wednesday, 1 November 2006 Page 18
Hearing commenced at 11.24am
LONEY, MR JOHN
Director, Policy and Planning, Department of Water, examined:
HAUCK, MR EDWARD,
Manager, Strategic Water Planning, Department of Water, examined:
The CHAIRMAN: On behalf of the committee, I welcome you to the meeting. You will have signed a document entitled “Information for Witnesses”. Have you read and understood that document?
The Witnesses: Yes.
The CHAIRMAN: These proceedings are being recorded by Hansard. A transcript of your evidence will be provided to you. To assist the committee and Hansard, please quote the full title of any document you refer to during the course of the hearing for the record. Please be aware of the microphones and speak into them. I remind you that your transcript will become a matter for the public record. If for some reason you wish to make a confidential statement during today’s proceedings, you should request that the evidence be taken in a closed session. If the committee grants your request, any public and media in attendance will be excluded from the hearing. Please note that until such time as the transcript of your evidence is finalised, it should not be made public. I advise that the premature publication or disclosure of evidence may constitute a contempt of Parliament and may mean that the material published or disclosed is not subject to parliamentary privilege.
I am sure that through correspondence with the committee you are aware of the context of our inquiry. It is a self-initiated inquiry into water governance. This committee is following the work that was done by its predecessor in the last Parliament. It did not have enough time to investigate all the areas. This time we have focused on a narrower inquiry of water governance and administration. Would you like to make an opening statement to the committee?
Mr Loney: Yes, I would. With your permission I will ask Ed to supplement anything that I miss in my opening statement. I make my opening statement in the context of the three general areas referred to in the committee’s letter to Paul Frewer, the Director General of the Department of Water. I will concentrate on the first area, which is the functions and operations of the Department of Water.
The CHAIRMAN: I clarify for the record that the committee contacted the department and invited it to appear before the committee. We stipulated that we were interested in three general areas. The first is the functions and operations of the Department of Water. The second is the roles and responsibilities of other state government departments. The third is the rationale and reason for proposed changes in water governance structures.
Mr Loney: My opening statement will particularly address the first and third areas. The second area, the role of other state government departments, will emerge as committee members ask specific one-on-one questions.
By way of background, the ground water and surface water resources in Western Australia have generally not been developed or investigated to the same extent as has occurred in the other states. The reasons for that are that we have a higher concentration of ground water compared with the other states, which makes it much more difficult to understand with greater precision. We are obviously a much larger state with fewer population pressures and there simply has not been the pressure to achieve a greater understanding of water. That situation is clearly changing. A number of factors are leading to increased pressures and risks. These factors are climate variability and change, which are particularly noticeable in the south west of Western Australia. Climate change and variability have resulted in decreased rainfall and, very importantly, decreased run-off into both the surface water catchments and the underground aquifers. Western Australia is experiencing significant rates of economic growth and with that it is experiencing a continued increase in the demand for water and increasing population growth in the south west and other regional centres. There used to be a big gap between demand and supply; however, that gap is diminishing, and we are under greater pressure to increase our knowledge of our water resources and to manage them in a more sustainable manner. They are some of the key drivers that we will be talking about.
Water resource management is based on the triple bottom line - that is, economic, social and environmental factors. An increased demand for water and a decrease in the yield from the systems can result in a reduction in the reliability of the supply and the increased prospect of water shortages and/or an increasing trade-off between the three areas of the triple bottom line, which are the economic, social and environmental factors. The government has managed these significant changes by developing a program of alternative water supplies. The Water Corporation’s “Security through Diversity, The Water Crisis: Fact or Fiction?” program includes the desalination plant, which is due to open shortly. It also includes water trading with Harvey Water, the irrigation cooperative, demand management through water restrictions and the water reform program, which I will go into in some detail in a moment. Additional funding has been provided for increased resourcing for the investigation and increased understanding of our water resources. By way of a background, those are our drivers.
The Department of Water was formed and became operational in January this year. It was separated from the Department of the Environment. Significantly I must point out that it is still operating under the Water and Rivers Commission legislation. The Water Resources Legislation Amendment Bill 2006 is currently before the upper house. To that extent we are operating almost as the Water and Rivers Commission trading as the Department of Water. The commission and the board still operate fully, as the board should, and all key policy issues are taken up and discussed and endorsed by the board. The Water and Rivers Commission is still operating in every sense of the word. I stress that although we are the Department of Water, we will continue to operate under the Water and Rivers Commission legislation until the Water Resources Legislation Amendment Bill 2006 is passed by the upper house and sent to the Governor.
The aim of our department is to plan, develop and manage the state’s water resources on a sustainable basis. Our vision is to ensure that water goes to the highest and best use of Western Australia’s water resources. This highest and best use is significant when we consider the water reform project, which I will discuss in a few moments. The committee is interested in the functions and operations of the Department of Water. I have a copy of the department’s structure. With your permission, I will go through it to highlight the areas that we concentrate on.
[11.30 am]
I do not propose to go through this document in any great detail to the bottom line. It is dated back in June, because there has been some tweaking, as you would imagine, with the new department. I will concentrate on the yellow boxes towards the top; they set out the various divisions. The policy and planning division, which I head up, is the first yellow box in the top left of the chart. It is responsible for getting the policy and the planning frameworks for legislation underpinnings, state planning - we are going through a program of state water plans and regional plans - working with industry, the Premier’s Water Foundation and indigenous policy issues. The one box entitled “Manager Water Reform” is dealing very much with the National Water Commission and all the new national water initiatives that are emerging. The second box, “Water Resources Management” for which John Ruprecht is the manager, is really about proving up the resources by identifying and protecting the resources. We get the policy and planning right and they then identify the size, quality and quantity of the resources. The next box, “Water Resource Use Division”, refers to Rod Hammond’s division. That is very much based on the fact that we know how much water there is, and this is the licensing allocation of how the water is used. In some sense we would like to think it is a natural progression. We prove how much water there is and then there is the water use division, which Rod Hammond heads up. The water licensing allocation will undergo substantial changes under the water reform process, which we will discover as we go through this morning. The final two boxes are “Water Resource Business Operations” and “Corporate Services”. The business operations cover our regional offices, as you would imagine. We have an extensive number of properties from Kununurra through to Albany and Esperance. The water resource managed by Paul Rosair’s division and the corporate services division is headed up by Brendan O’Neil. If members are happy with that, I just wanted to talk about the broad, structural areas that we are concentrating on to show that each of our subprograms is linked to one of the divisions, so each division contributes to a subprogram. It is a nice, one-on-one relationship.
The CHAIRMAN: Is it possible to superimpose on that flow chart other government agencies and organisations or private organisations, such as the Busselton Water Board, to show where they fit into the whole structure, or would you need a separate flow chart?
Mr Loney: You could superimpose it. I will ask Ed to comment on that, in the sense that there are two forms of licensing. One is the licence to draw water and then there is a separate services licence, which is where the Water Corporation and the Busselton Water Board fit in. They can be superimposed, but perhaps Ed would like to make a more detailed comment.
Mr Hauck: Yes. There are areas within other organisations; for instance, the Water Corporation, where certain functions complement the functions within the Department of Water. The Water Corporation undertakes some water resource investigations for the purposes of developing water supplies, whereas the Department of Water undertakes investigations to understand, for instance, the ground water resources of the state. We make use of each other’s programs, but they are for different purposes. For instance, the investigations function under the second yellow box from the left, which shows water resources management, would involve some elements that would take place within different water suppliers, such as Busselton Water Board, Bunbury Water Board and the Water Corporation; likewise, there would be some aspects of regulation of water services that relate back to specific areas within the Department of Water. For instance, the industry support area would have some water services policy aspects that would apply to the water services provided by groups such as the Water Corporation, the Busselton Water Board and Bunbury Water Board. You could map some functions to that degree, if that answers your question.
Mr Loney: The licences to the water service providers are provided by the Economic Regulation Authority, so the actual licence provision for water services is provided by the ERA. Again, that would need to be superimposed on this diagram.
The CHAIRMAN: I guess the inevitable question is: is there some duplication with some of these tasks between your agency and the Water Corporation or something else?
Mr Loney: I certainly do not see any duplication in that. The function of the policymaker of this department was separated out from that of the utility provider when the Water Authority was broken up and the Water Corporation established. In terms of good governance, we have made sure that we clearly separated out the role of the regulator from the utility provider but, as Ed said, there might be some areas where they will undertake some investigation for water supply. They work so very close together that is very much a complementary process, as I would see it.
The CHAIRMAN: Thank you. Please carry on.
Mr Loney: The next area I would like to talk about is the water reform process, which goes right back to the Council of Australian Governments agreement of 1994. As for an increased impetus, the state water strategy was brought in focus by the drought and the harsh winter of 2001, and the state water strategy document was released in 2003. There were a couple of key outcomes from that. One was the agreement that we would move into a very detailed planning framework. We have a state water plan, which has just been released in final draft form. Again, I have copies which members may wish to have a look at.
The CHAIRMAN: Would you like to table that document?
Mr Loney: I do not plan to go through it in any detail; it is simply for information. It is an indication that we are going through a detailed planning process, which has a framework in which the state water plan is at the top and then it moves down to regional water plans and then detailed ground water plans. That document sets out the framework by which we will be operating our planning process.
The CHAIRMAN: Are you happy for that to be tabled as a public document and also the previous flow chart that you gave us?
Mr Loney: The flow chart is certainly a public document that has been released. I guess that this is an internal structural document, which is constantly undergoing change, so I would not like it to be seen as gospel at any one time. If it is appropriate not to table it, if that is okay -