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Snowy Water Agreement

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SpeakersDella Bosca The Hon John; Nile Reverend The Hon Fred; Gay The Hon Duncan
BusinessMinisterial Statement


    SNOWY WATER AGREEMENT
Page: 11678
    Ministerial Statement

    The Hon. J. J. DELLA BOSCA (Special Minister of State, Minister for Industrial Relations, Assistant Treasurer, Minister Assisting the Premier on Public Sector Management, and Minister Assisting the Premier for the Central Coast) [5.07 p.m.]: Australia is the world's driest continent. As early explorers criss-crossed the land they assessed the country's potential by the amount of water available to support livestock and crops. When the Snowy Mountains were first explored by European settlers in 1835 it was realised that there was a huge potential supply of water, but most of it drained away to the ocean. Some of the nation's best-known rivers—the Murray, the Murrumbidgee, the Tumut and the Snowy—rise in these mountains. Some of this water has always flowed westward feeding the Murray and Murrumbidgee system, but much went east and was largely unexploited.

    Australians have an attachment to the Snowy River though literature. In 1892 Banjo Paterson wrote the famous ballad The Man From Snowy River, which epitomised the riders of the high country. Hardly an Australian would not know some of the lines from that poem. We picture the scenic and environmental beauty that leaps out of the ballad. It is ironic to recall that the story eulogises the riders of the high country, whose introduction of hoofed animals did a lot to damage the natural environment of the area. Another aspect of the Snowy played a profound part in the lives of many Australians—the great Snowy Mountains scheme built between 1949 and 1972. There is nothing more Australian than the Snowy River.

    Farmers and politicians of New South Wales looked with envy at the Snowy country for decades. Its vast quantity of water was what the colony needed but most of it ran away to the sea. Droughts regularly crippled the colony of New South Wales. In 1884 the New South Wales Surveyor General, P. F. Adams, proposed a dam on about the site of today's Island Bend and advocated a massive canal across the range to the Murrumbidgee. Further schemes were discussed over the years. In 1941 William McKell led the Australian Labor Party to a stunning victory in the New South Wales election. Rural issues, including water, were high on the Government's agenda. People had talked about a Snowy scheme for generations and now McKell decided it was time to act. In December 1941 he commissioned the New South Wales Snowy Mountains Committee to investigate proposals for the utilisation of the waters of the Snowy. In 1944 it reported, recommending a Snowy project.

    The New South Wales Government saw irrigation as the object of any such project not hydro-electric power. The Federal Government, however, saw the waters of the Snowy as primarily for power generation. Canberra saw a series of underground power stations, far inland, as being secure in the case of attack in war time. Victoria also took the view that power was the priority. In Canberra, Prime Minister Ben Chifley and Minister for Works, Nelson Lemmon, were enthusiastic about the proposal to harness the Snowy waters, although they too shared the Victorian view of the priority for hydro-electric power. However, it was no simple legislative matter in the complexities of a federated Australia to have three governments agree on the project. Thus, the Chifley Government passed Federal legislation, using its emergency powers under the Defence Act, declaring the project necessary for defence purposes. A compromise was reached on utilising the waters for both power and irrigation.

    The Snowy Mountains scheme changed Australia forever. A nation, founded on solid British stock, almost overnight became one of the world's great pancultures. A hundred thousand workers from some 33 countries toiled in this new southern outback—miners, riggers, sparkies, chippies, engineers, surveyors, drivers, cooks, clerks—the list is endless. Tough individuals built the Snowy through sheer hard work and sometimes at the cost of their lives. For many there was a story of courage and adventure in even reaching Australia from war-ravaged Europe. Today many Australian families owe the gift of this country to their dads and grandads who came to work on the Snowy, and stayed. Those of us who grew up in the 1950s and 1960s were familiar with the Snowy names. There was a mystique about the old towns of Adaminaby and Jindabyne that were swallowed up by the great dam waters. There was a magic in the names of Snowy towns that sprung up such as Khancoban, Cabramurra, Happy Jacks and Island Bend. Fifty years on, the Snowy remains a great engineering achievement.

    The Snowy scheme impressed the national consciousness like no other project has done before or since. There are endless tales told of the Snowy. From the Snowy came hydro-electric power and irrigation. The Snowy relied on multiculturalism, innovation, brilliant organisation, and world's best practice in technology combined with an awesome vision. Through co-operation with management, unions and workers disputes were settled quickly before they escalated. Snowy Mountains Commissioner Sir William Hudson and the Australian Workers Union used on-the-spot mediation to settle disputes. It was not only a multicultural engineering success; it was an industrial success. If ever there was a national monument from which people could draw pride and confidence it was the Snowy. I recommend to honourable members who are interested in the Snowy Mountains scheme a visit to the photographic exhibition on the first floor of the State Library. I recently had the great pleasure of opening this display and it is well worth a visit.

    In their day those who proposed and developed the Snowy scheme had a high regard for the environment but they did not foresee what would happen. One of the effects of the development of the Snowy scheme was the diminishing flow of the Snowy River. The reduced flow is quite dramatic. This was brought home to me when I visited Dalgety on the Snowy downstream from Jindabyne Dam. To solve such a problem, to reverse a process, is not easy. Apart from cost factors there are the obvious impacts on other communities west of the Snowy that have come to rely on the Snowy scheme for irrigation water. Negotiations between the three governments of New South Wales, Victoria and the Commonwealth have been undertaken to try to solve this problem. I am pleased to report the success of negotiations between governments on this issue. In October 1998, the final report of the Snowy Water Inquiry was presented to the New South Wales and Victorian governments by the Commissioner, the Hon. Robert Webster. Completion of the inquiry is a precondition for the corporatisation of the Snowy Mountains Hydro-Electric Authority.

    The inquiry was set up to develop fully costed options to address environmental issues arising from the current pattern of water flows in rivers affected by the Snowy Mountains Hydro-Electric Scheme. Water flows are determined by the requirements for both electricity generation and supply of water for irrigation farming to the Murray and Murrumbidgee valleys west of the Great Dividing Range. The inquiry received wide-ranging submissions from interested parties. These included the three major groups which have substantial interests in the flows of water from the Snowy scheme: environmentalists, irrigation farmers from west of the Great Dividing Range and the electricity generation interests. Extensive negotiations on an outcome from the Snowy Water Inquiry have been carried out between New South Wales, Victoria and the Commonwealth. The results of these negotiations were announced on 6 October 2000 in Jindabyne by Premier Carr and Premier Bracks.

    The Premiers outlined an agreement on increased water releases from the Snowy Mountains scheme to the Snowy River; the upper Murrumbidgee River; and the Snowy region alpine rivers. This package has been designed to deliver environmental benefits for the rivers whilst at the same time protecting the environment of the Murray-Darling Basin, safeguarding the interests of irrigation farmers, maintaining the quality and quantity of South Australia's water supply and preserving the viability of the Snowy scheme. The key to this solution is the achievement of water savings in the western rivers which are then used to offset increased flows in the Snowy River. The outcome can be summarised as follows: in implementing increased flows in the Snowy River below Jindabyne, in the River Murray and in the Snowy montane rivers, the three governments will aim for no adverse impacts on water entitlements for irrigation in diversions from the River Murray and in the Murrumbidgee and Goulburn-Murray river systems; water flows for environmental purposes in the River Murray and in the Murrumbidgee and Goulburn-Murray river systems; and South Australian water security or water quality consistent with water sharing arrangements in the Murray-Darling Basin Agreement.

    The three governments will establish a jointly owned enterprise which will be charged with acquiring up to 282 gigalitres of water at least cost. This is irrespective of whether the water is sourced from New South Wales or Victoria. The water acquired by the enterprise will be used to offset increased flows in the Snowy River of up to 21 per cent of average natural flow—212 gigalitres. The target is to achieve these increased flows within 10 years. The flow level in the Snowy River above which compensation will be paid to Snowy Hydro Ltd will be set at 21 per cent of average natural flows. This is the substance of the agreement which I have tabled in the House today as required under the Snowy Hydro Corporatisation Act 1997. However, the three governments were able to agree on additional benefits to the minimum ones required by the legislation. First, 70 gigalitres per annum of dedicated environmental flows will be provided to the River Murray. Second, increased water flows will also be provided in the Snowy montane rivers. Many of the Snowy montane rivers, such as the upper Murrumbidgee and the Snowy above Jindabyne, have high environmental value. This applies to threatened and endangered species and rare upper montane ecosystems.

    The agreed outcome for the Snowy Water Inquiry will achieve significant improvements in the environmental conditions of these rivers. The joint government-owned enterprise will acquire water primarily through investing in water-saving measures and if necessary through purchase of water entitlements in New South Wales and water rights in Victoria. It is anticipated that the majority of water will be acquired through water-saving measures rather than purchases. The enterprise will be required to manage any purchases of water very carefully so as not to inflate the prices paid in the water market. The enterprise will be funded by the three governments during 10 years. New South Wales and Victoria will each contribute up to $150 million and the Commonwealth will contribute $75 million in that period. The Commonwealth's contribution of $75 million will be used primarily to fund the 70 gigalitres per annum of dedicated environmental flows in the River Murray. Those familiar with the story of the Snowy will recognise this agreement as a major intergovernmental initiative. It is a determined move by the three governments to address a major problem. This is an example of governments acting responsibly and collectively on environmental issues of concern to the broader community. I seek leave to incorporate in Hansard the Heads of Agreement for the agreed outcomes from the Snowy Water Inquiry. This document outlines arrangements to implement the outcomes and will enable honourable members to understand more fully the details of the matter.

    Leave granted.
    ______


    HEADS OF AGREEMENT
    THE AGREED OUTCOME FROM THE SNOWY WATER INQUIRY
    6 December 2000

        This Heads of Agreement has been prepared to outline arrangements to implement the outcome from the Snowy Water Inquiry which has been agreed between the NSW, Victorian and Commonwealth Governments.

        Legislative Basis of An Agreed Outcome

        The Snowy Hydro Corporatisation Act 1997 (NSW) requires that, following the completion of the Snowy Water Inquiry, NSW is to reach agreement with Victoria on:
        • the initial release of water to the Snowy River for environmental reasons on the issue of the Snowy water licence; and
        • the increased amount of such releases of water following the first review of the Snowy water licence that will not give Snowy Hydro an entitlement to compensation.

        The Act requires a review of the provisions of the Snowy water licence relating to the initial release of water to the Snowy River for environmental reasons five years after the licence is issued. The Act also requires reviews of all obligations under the Snowy water licence 15 years after the licence is issued and every 10 years thereafter.

        The Snowy Hydro Corporatisation Act 1997 (Cth) requires the relevant Commonwealth Minister to be satisfied with the adequacy, conduct, outcome and planned implementation of the Snowy Water Inquiry, having regard to the continued viability of the Snowy Scheme.
    Environmental Objectives

        The environmental objectives for the Snowy River and the Snowy upper montane rivers are to improve the habitat for a diverse range of plant and animal species by a combination of:
        • improving the temperature regime of river water;
        • achieving channel maintenance and flushing flows within rivers;
        • restoring connectivity within rivers for migratory species and for dispersion;
        • improving triggers for fish spawning; and
        • improving the aesthetics of currently degraded riverine environments.

        These objectives are complemented by an objective to maintain and improve environmental flows for the River Murray.
        1. INTRODUCTION

        This Introduction sets out the principles adopted by the three Governments in reaching agreement on the Snowy Water Inquiry outcome. The body of the document repeats the principles and provides more information about the implementation of the agreed outcome.

        1.1 In implementing increased flows in the Snowy River below Jindabyne, in the River Murray and in the Snowy montane rivers, there will be no adverse impacts on:
          • water entitlements for irrigation in diversions from the River Murray and in the Murrumbidgee and Goulburn-Murray river systems;
          • water flows for environmental purposes in the River Murray and in the Murrumbidgee and Goulburn-Murray river systems;
          • South Australian water security or water quality consistent with water sharing arrangements in the Murray-Darling Basin Agreement.

        1.2 The three Governments have adopted the following target levels of water flows to be achieved progressively within 10 years:
          • total flows equivalent to 21% of average natural flow (ANF) in the Snowy River;
          • increased flows equivalent to 150 gigawatt-hours per annum of foregone electricity generation in the Snowy montane rivers, including the upper Murrumbidgee River;
          • dedicated environmental flows allocated to the River Murray of 70 gigalitres per annum.

        1.3 The additional 7% of further flows in the Snowy River up to a total of 28% ANF may be achieved following the implementation of an additional major capital works program to achieve water savings in the southern Murray-Darling Basin beyond those required to offset the 21 % ANF flows in the Snowy River. This program will be undertaken through public private partnerships in which the water saved is shared between the governments and private sector partners. Water savings allocated to the governments will be used to offset increased flows in the Snowy River and to provide further dedicated environmental flows in the River Murray.

        1.4 All increased flows in the Snowy River and dedicated environmental flows allocated to the River Murray will be offset with water acquired primarily through prior verified water savings in diversions from the River Murray and in the Murrumbidgee and Goulburn-Murray river systems and, if necessary, through purchases of water from these areas.

        1.5 Once a flow of 15% ANF is achieved in the Snowy River, the security of the further offset water required to achieve a 21 % ANF flow in the Snowy River will be at the level of reliability measured at the point of acquisition or purchase, not at the reliability level for annual inflows to the Snowy River.

        1.6 Compensation for all net foregone revenue resulting from reduced availability of water flows will be paid to Snowy Hydro Ltd, by arrangement between NSW and Victoria, for any flows in the Snowy River above 21% ANF.

        1.7 A joint government enterprise will be established by the NSW, Victorian and Commonwealth Governments with a charter to acquire water at least cost, irrespective of whether it is sourced in NSW or Victoria. The enterprise will acquire water primarily through investing in water savings projects and, if necessary, through purchasing water entitlements and water rights. Any of the three Governments may provide the enterprise with costed water savings projects to be investigated by the enterprise.

        1.8 The purpose of the enterprise will be expressed in its founding documents as being to:
          • acquire sufficient water to offset up to 21% ANF flows in the Snowy River and to provide for dedicated environmental flows of 70 gigalitres per annum allocated to the River Murray; and
          • commission necessary environmental and riverine works, in addition to works commissioned by Snowy Hydro Ltd, in the Snowy River, the Snowy montane rivers and the River Murray as nominated and agreed by the three Governments.

        1.9 The enterprise will be funded as follows:
          • New South Wales Government: $150 million;
          • Victorian Government: $150 million,
          • Commonwealth Government: $75 million.
          These are the total financial contributions which will be made by the Governments towards achieving the target levels of water flows specified in Clause 1.2. All financial contributions will be provided in the first ten years. The Commonwealth financial contribution will be provided, in particular, to secure environmental releases to the River Murray.
          Commitment of funds can only be varied by agreement between the three Governments.

        1.10 All increased flows in the Snowy River and the River Murray are to be for environmental purposes and are not to be used for irrigated agriculture or any other consumptive purpose.

        2. COMMITMENTS BY THE GOVERNMENTS

        2.1 The NSW, Victorian and Commonwealth Governments agree that in implementing increased flows in the Snowy River below Jindabyne, in the River Murray and in the Snowy montane rivers, there will be no adverse impacts on:
          • water entitlements for irrigation in diversions from the River Murray and in the Murrumbidgee and Goulburn-Murray river systems;
          • water flows for environmental purposes in the River Murray and in the Murrumbidgee and Goulburn-Murray river systems;
          • South Australian water security or water quality consistent with water sharing arrangements in the Murray-Darling Basin Agreement.

        2.2 The three Governments agree that flows in the Snowy River below Jindabyne will not be increased and dedicated environmental flows allocated to the River Murray will not be implemented unless they are first offset by water acquired through:
          • primarily undertaking water saving, environmental improvement and regional development projects in diversions from the River Murray and in the Murrumbidgee and Goulburn-Murray river systems; and
          • if necessary, purchasing water entitlements and water rights from holders in a manner which promotes the water trading market.

        2.3 The three Governments agree that, at any given time, the total volume of water releases from the Snowy Scheme to the Snowy River below Jindabyne cannot exceed the total verified volume of water acquired through the processes outlined in Clause 2.2.
        2.4 The three Governments agree that water to offset increased flows to the Snowy River below Jindabyne or dedicated environmental flows to the River Murray will not be acquired from the Darling River system except by agreement between NSW, Victoria, the Commonwealth and South Australia.

        2.5 All increased flows in the Snowy River and the River Murray are to be for environmental purposes and are not to be used for irrigated agriculture or any other consumptive purpose.

        3. ESTABLISHMENT OF A JOINT GOVERNMENT ENTERPRISE

        3.1 A joint government enterprise will be established by the NSW, Victorian and Commonwealth Governments with a charter to acquire water at least cost, irrespective of whether it is sourced in NSW or Victoria. The enterprise will acquire water primarily through investing in water savings projects and, if necessary, through purchasing water entitlements and water rights.

        3.2 The enterprise will acquire water in order of least cost in diversions from the River Murray and in the Murrumbidgee and Goulburn-Murray river systems, treating the water available as a single pool.

        3.3 Any of the three Governments may provide the enterprise with a costed water savings project or package of projects to be investigated by the enterprise or provide water from savings projects initiated by the relevant Government at the lesser of the cost of the project(s) or the prevailing market price in the market from which the savings were drawn.

        3.4 The purpose of the enterprise will be expressed in its founding documents as being to
          • acquire sufficient water to offset up to 21% ANF flows in the Snowy River and to provide for dedicated environmental flows of 70 gigalitres per annum allocated to the River Murray; and
          • commission necessary environmental and riverine works, in addition to works commissioned by Snowy Hydro Ltd, in the Snowy River, the Snowy montane rivers and the River Murray as nominated and agreed by the three Governments.

        3.5 The enterprise will be funded as follows:
          • New South Wales Government: $150 million;
          • Victorian Government: $150 million;
          • Commonwealth Government: $75 million.
        These are the total financial contributions which will be made by the Governments towards achieving the target levels of water flows specified in Clause 1.2. All financial contributions will be provided in the first ten years. The Commonwealth financial contribution will be provided, in particular, to secure environmental releases to the River Murray.

        Commitment of funds and the allocation of water savings for environmental purposes can only be varied by agreement between the three Governments.

        3.6 The enterprise will be non-profit. It will have a defined annual cash flow and a limited capacity to carry out short-term investment, carry over of funds between financial years, and borrowing. The annual business plan of the enterprise including the proposed savings projects or package of projects will require the approval of the three Governments.

        3.7 The parties recognise that NSW and Victoria are moving to establish fully functioning water markets consistent with COAG principles and MDBC resolutions and the parties also note that NSW is currently in a program of active water policy reform and that these initiatives will underpin the operation of the enterprise.

        3.8 Pending the establishment of fully operating water markets, the State Governments will take all reasonable steps to promote access by the enterprise to water entitlement and water rights holders (including individuals) in both States for the acquisition of water for the purposes of this agreement.

        4. STAGES FOR INCREASED FLOWS

        First Stage (Initial release)

        4.1.1 An initial increased release of water to the Snowy River below Jindabyne will be made from the Mowamba River and Cobbon Creek aqueducts at a time agreed by all three Governments following the proclamation of the Snowy corporatisation legislation.

        4.1.2 Water to offset the increased flows in the Snowy River resulting from releases from the Mowamba River and Cobbon Creek aqueducts will be sourced for up to the first three years from Snowy Scheme storages. These borrowings will be paid back over a time scale which does not affect water allocations for irrigation farming. The repayment schedule will be part of the agreed annual business plan of the joint government enterprise. Within three years, inflows to the Snowy River from the Mowamba River and Cobbon Creek will be offset by verified water savings from the enterprise. Reductions in assured releases to the west made by Snowy Hydro Limited equal to these verified water savings will be implemented when this offsetting commences.

        4.2 Second Stage (2 to 7 years)

        4.2.1 Water releases from the Snowy Scheme to the Snowy River below Jindabyne will be progressively increased in tandem with increases in the verified volume of water acquired by the joint government enterprise. For this stage, the target flow in the Snowy River below Jindabyne is 15% ANF. To enable these releases to be made, within three years of corporatisation Snowy Hydro Ltd will build an outlet at Jindabyne Dam to enable a flow in the Snowy River of at least 28% ANF.

        4.2.2 Dedicated environmental flows allocated to the River Murray of up to 70 gigalitres per annum will be progressively implemented in tandem with increases in the verified volume of water acquired by the joint government enterprise. The River Murray flows will be matched to the allocation to the Snowy River on the basis of one gigalitre allocated to the River Murray per two gigalitres allocated to the Snowy River over the Second Stage (2 to 7 years).

        4.2.3 The MDBC will be responsible for managing a variable inflow regime, including above-target water from the Snowy Scheme to provide dedicated environmental flows to the River Murray downstream from the Hume Dam.

        4.2.4 NSW will develop schedules for increased water releases to the Snowy montane rivers, including the upper Murrumbidgee River, of a total volume of water equivalent to foregone Snowy electricity generation of 100 gigawatt hours per annum. If necessary to enable releases to the upper Murrumbidgee River, within three years of corporatisation Snowy Hydro Ltd will build an outlet at Tantangara Dam.

        4.2.5 Water releases to the Snowy River below Jindabyne and to the Snowy montane rivers will mimic natural flows under prevailing climatic conditions to the extent possible, depending on the availability and reliability of offset water and the capacity of constructed outlet works at Jindabyne and Tantangara Dams.

        4.3 Third Stage (8 to 10 years)

        4.3.1 Water releases from the Snowy Scheme to the Snowy River below Jindabyne will be progressively increased in tandem with increases in the verified volume of water acquired by the joint government enterprise. For this stage, the target flow in the Snowy River below Jindabyne is 21% ANF.

        4.3.2 In this stage, the security of the further offset water required to achieve a 21% ANF flow in the Snowy River will be at the level of reliability measured at the point of acquisition or purchase, not at the reliability level for annual inflows to the Snowy River.

        4.3.3 Water allocated from the Snowy Scheme to the River Murray for dedicated environmental flows will continue to be matched to the allocation to the Snowy River on the basis of one gigalitre allocated to the River Murray per two gigalitres allocated to the Snowy River up to a maximum allocation of 70 gigalitres per annum to the River Murray within 10 years.

        4.3.4 Water releases from the Snowy Scheme to the Snowy montane rivers will be increased to a total volume of water equivalent to 150 gigawatthours per annum of foregone electricity generation.

        4.3.5 The target is to complete this stage in 10 years.

        4.4 FOURTH STAGE (BEYOND 10 YEARS)

        4.4.1 The additional 7% of further flows in the Snowy River up to a total of 28% ANF may be achieved following the implementation of an additional major capital works program to achieve water savings in the southern Murray-Darling Basin beyond those required to offset the 21% ANF flows in the Snowy River. This program will be undertaken through public private partnerships in which the water saved is shared between the governments and private sector partners. Water savings allocated to the governments will be used to offset increased flows in the Snowy River and to provide further dedicated environmental flows in the River Murray.

        5. COMPENSATION PAYABLE TO SNOWY HYDRO LTD

        5.1 The three Governments agree that compensation for all net foregone revenue resulting from reduced availability of water flows will be paid to Snowy Hydro Ltd, by arrangement between NSW and Victoria, for any flows in the Snowy River above 21 % ANF.

        5.2 No flows in excess of 21% ANF will be implemented before arrangements for sharing the cost of the compensation are agreed between the NSW and Victorian Governments.

        6. WATER ACCOUNTING ARRANGEMENTS

        6.1 The measuring point for all Snowy River flows will be immediately below the confluence between the Snowy and Mowamba rivers.

        6.2 The three Governments will present each water savings project or package of projects proposed by the joint government enterprise or by the Governments themselves to the Murray Darling Basin Commission for comment under clause 46 of the Murray Darling Basin Agreement.

        6.3 A methodology for verifying the water savings actually acquired through each project for the purposes of offsetting increased flows to the Snowy River below Jindabyne and dedicated environmental flows to the River Murray will be developed for comment by the MDBC and approval by the three Governments.

        6.4 An auditor appointed by the three Governments in consultation with the MDBC will review the calculation of prospective water savings from each project, certify that the calculations are reasonable and verify the actual water savings achieved by each project.
        6.5 Victoria and NSW will create specific environmental water entitlements for the Snowy and Murray Rivers. The water contained in these entitlements will represent the water savings and purchases made by the joint government enterprise.

        6.6 The allocation of water to the Snowy Scheme for increased flows in the Snowy River below Jindabyne and for dedicated environmental flows in the River Murray will be made when the offsetting water savings actually acquired have been verified by the auditor. However, the initial release of water from the Mowamba River and Cobbon Creek aqueducts will be in accordance with clause 4.1.2 of this agreement.

        6.7 The joint government enterprise will be required to maintain a continuous and audited record of water acquired for the purpose of offsetting increased releases to the Snowy River below Jindabyne and dedicated environmental flows to the River Murray and the relationship of these acquisitions to the Murray and Tumut developments of the Snowy Scheme. The enterprise will advise the respective responsible Ministers of the volumes of offset water acquired.

        6.8 Assured releases from the Murray and Tumut developments of the Snowy Scheme will be reduced by the increased volumes of water released to Snowy montane rivers external to the Scheme, including the upper Murrumbidgee River, according to the catchment into which each of these rivers flows.

        6.9 Each State will reduce its MDBC Cap by the audited total volume of water advised by the enterprise as having been acquired within that State for the purpose of offsetting increased releases to the Snowy River below Jindabyne and dedicated environmental flows to the River Murray.

        6.10 The water allocated to the Snowy Scheme as dedicated environmental flows to the River Murray will be held in Snowy Scheme storages and will be available to Snowy Hydro Ltd as above-target water.

        6.11 Following agreement between the three Governments, the NSW Water Administration Ministerial Corporation, as the licensor, will direct Snowy Hydro Ltd prior to the development of the annual Snowy Hydro Operating Plan on the volume of water to be deducted from assured releases to, and from the guaranteed minimum for, the west from each development to offset increased releases to the Snowy River below Jindabyne and dedicated environmental flows to the River Murray during the currency of the Operating Plan. The deductions from assured releases and the guaranteed minimum are to be equal to the total verified water savings acquired by the joint government enterprise.

        6.12 Following agreement between the three Governments, the NSW Water Administration Ministerial Corporation, as the licensor, will direct Snowy Hydro Ltd on the monthly schedule of releases to the Snowy River below Jindabyne to be achieved which corresponds to the increased release volume. This direction will be provided in time to be included in the Snowy Hydro annual Operating Plan.

        6.13 Following agreement between the three Governments, the NSW Water Administration Ministerial Corporation, as the licensor, will direct Snowy Hydro Ltd on the monthly schedule of releases to the Snowy montane rivers to be achieved which corresponds to the volume of water equivalent to foregone Snowy electricity generation of 150 gigawatt-hours per annum, or the agreed component thereof within the first ten years. This direction will be provided in time to be included in the Snowy Hydro annual Operating Plan.

        7. ENVIRONMENT AND RIVERINE WORKS

        7.1 The joint government enterprise will be responsible for funding environment and riverine works in the Snowy River, the Snowy montane rivers and the River Murray as nominated and agreed by the three Governments and in accordance with its approved business plan.

        8. RESPONSIBILITIES OF SNOWY HYDRO LTD

        8.1 The three Governments will, as appropriate, indemnify Snowy Hydro Ltd from any liability for downstream environmental or property damage resulting from release of water from the Snowy Scheme for increased flows in the Snowy River below Jindabyne and in the Snowy montane rivers or for dedicated environmental flows in the River Murray made in accordance with the Snowy water 1icence.

        8.2 Within three years of corporatisation, Snowy Hydro Ltd will build an outlet at Jindabyne Dam to enable a flow in the Snowy River of at least 28% ANF.

        8.3 If necessary to enable releases to the upper Murrumbidgee River, within three years of corporatisation, Snowy Hydro Ltd will build an outlet at Tantangara Dam.

    ______

    Reverend the Hon. F. J. NILE [5.18 p.m.], by leave: The Christian Democratic Party is pleased, as I am sure all honourable members are, that this agreement has been reached between the Commonwealth, New South Wales and Victorian governments. There has been much agitation in the House particularly in regard to the Snowy River. Not only will the Snowy River benefit from this agreement but also the Murray River. I commend the leaders of the three respective governments for their energy in bringing about this agreement.

    Notice of Motion

    The Hon. J. J. DELLA BOSCA: I seek the leave of the House to give notice of a motion with respect to the agreement between New South Wales and Victoria on the outcomes of the Snowy water inquiry.

    The Hon. D. J. GAY: The House should be aware that if one member of the Opposition were to say no, leave would not be granted and the Special Minister of State would not be able to proceed to give notice. We acknowledge that the Special Minister of State just made a ministerial statement, but I point out that very short notice was given of it. Overnight, the Opposition will be reviewing its position on this matter. However, the Opposition will not use, as it could have used, this opportunity to stop the Government proceeding with this matter.

    Leave granted.

    The Hon. J. J. DELLA BOSCA (Special Minister of State, Minister for Industrial Relations, Assistant Treasurer, Minister Assisting the Premier on Public Sector Management, and Minister Assisting the Premier for the Central Coast) [5.22 p.m.]: For the benefit of the House I acknowledge that I am aware of the difficulties posed to the House by these circumstances. I attempted to brief members of the Coalition and crossbench members earlier. Largely, this has been brought about by circumstances outside the immediate control of the New South Wales Government. Those circumstances can be fully ventilated tomorrow during debate on the substantive motion that I will move. I give notice that on the next sitting day I will move:
        That, under section 3 of the Snowy Hydro Corporatisation Act 1997, this House does not propose to disapprove of the agreement on the outcomes of the Snowy Water Inquiry, dated 5 December 2000, between the State of New South Wales and the State of Victoria, and tabled in this House on 6 December 2000.

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