1. Prof. Mike Young Research Chair, Water Economics and Management The University of Adelaide Policy

2. 2 “We don’t have all the answers – nobody does – but before we start laying bricks and mortar, we have got to get the foundations right, otherwise the cathedral will tumble with the smallest of tremors.” Peter Cullen, Wentworth Group of Concerned Scientists

3. 3 More than a drought An old problem  Living Murray  Dredge in 2002  Plans and more plans Existing MDB Agreement  Failed the River  Failed its communities  Failed Australia Time for our national leaders to empower someone to solve this problem  Solve it quickly Sustainable rivers audit

4. 4 Long drys are not new but … DRY WET Total River Murray System Inflows (including Darling River) 8 yrs 12 yrs 52 yrs

5. 5 Re-live from 1938 2014 Under the current MDB regime, the river could not survive another 6 years of drought

6. 6 Less rain means a lot less water - 1% - 3%

7. 7 Adverse climate change Mean supply 10,000 River & Storage Evap 2,000 Flow to sea 2,000 Deliverable water 6,000 Environment Use 1,500 Consumptive Use 4,500 0 Mean supply 7,000 River & Storage Evap 2,000 Flow to sea 2,000 Deliverable water 3,000 Environment Use 1,500 Consumptive Use 1,500 0 In Mediterranean climates, a 10% decline in mean rainfall results in around a 30% decline in mean storage inflow 10% less rain water means a 67% reduction in allocations unless the system is resized

8. 8 Ministers expect flow to decline by more than they plan to put back 0GL1,200GL2,400GL3,600GL So called 6 risks “could reduce stream flow by approximately 2,570 GL per year by 2023 and by up to 4,690 GL per year by 2053.” MDB Ministerial Council, May 2008 CoAG should require States to offset 100% of interception from the start of next year. Currently not on the agenda.

9. 9 Recommendations for CoAG Australia deserves an administrative regime that can be explained confidently as likely to work 1.Agree that new Independent Authority be made responsible for more than preparing another plan a) Responsible for maintaining the River at a minimum level b)Responsible for allocating the remaining non-flood inflows to shareholders 2.Allocate the environment and all States a share of inflows 3.Require offset of all new forests, farm dams, etc 4.Agree to restore the balance within 2 years using a mix of a)Coles Myer like buyback b)Compensation payments to irrigators c)By 2011, the environment should hold at least 15% of all entitlements

10. 10 Off-market share buybacks Type of Licence South Australian River Murray Licence Offer 1 …………….. ML @ not less than $2,400.00 per ML Offer 2 …………….. ML @ not less than $2,700.00 per ML Offer 3 …………….. ML @ not less than $3,000.00 per ML Offer 4 …………….. ML @ not less than $3,300.00 per ML Offer 5 …………….. ML @ not less than $3,400.00 per ML Signatures Licence holder ………………………………………… Registered interest (if any) ………………………….. Will you be leasing back any allocations made to these entitlements at $300 per ML of allocation made until 30 June 2010? Yes / No

11. Contact: Prof Mike Young Water Economics and Management Email: Mike.Young@adelaide.edu.au Phone: +61-8-8303.5279 Mobile: +61-408-488.538 www.myoung.net.auwww.myoung.net.au Download our report and subscribe to our droplets at www.myoung.net.au

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13. Volume of Water in the System Indicative template for sharing inflows among States and with the environment Putting aside enough for system maintenance & allocating the remainder is a Basin wide responsibility best given to an Independent MDB Authority