NSW urgently needs a "systemic fix" of its water extraction policies after a scathing independent investigation into water theft found the state's enforcement "ineffectual" and unprofessional.
The interim report by former senior water bureaucrat Ken Matthews said the Berejiklian government should consolidate all water compliance and enforcement into the Department of Industry "at arms length" from the Department of Primary Industries' water division.
Both Labor and the Greens called for water minister Niall Blair, the deputy NSW Nationals leader, to be stripped of the portfolio given the record of big irrigators donating to the party and the report's conclusions of poor oversight.
Among Mr Matthews' key findings are that the overall standard of NSW enforcement "has been poor", with metering of water extraction from the Barwon-Darling River in northern NSW "not at the standard required for sound water management".
The Independent Commission Against Corruption (ICAC) began its own probe last month. To avoid "complications" of conducting parallel investigations, Mr Matthews suspended his own group's investigatory work and handed relevant material to the ICAC.
The Matthews report recommends a range of "urgent" measures, including the creation of a legislated NSW Natural Resources Regulator that would take on water and eventually other resource issues. The government said it would act on that recommendation.
"The locus of compliance responsibility would be clear and leadership and decision-making authority would be unambiguous," the report said. "That is not the case now."
The Matthews report is one of six separate inquiries under way after the Four Corners report highlighted cases of irrigators installing equipment that took billions of litres of water, potentially undermining confidence in the entire $13 billion Murray Darling Basin recovery plan.
Mr Blair, the Department of Primary Industries Minister, told a media conference that the interim report was "pretty sober" reading for the government, revealing "failures", some of which would be acted on immediately.
Albury councillor David Thurley, who is Murray Darling Association President, welcomed the findings of an independent review.
“The MDA is a firm supporter of the Basin Plan and is committed to consistent compliance and enforcement arrangements,” he said.
“The report outlines a way forward for water compliance in the Murray-Darling Basin that could go a long way toward restoring public confidence in the plan.
“The MDA also backs Mr Matthews’ support for concurrent inquiries – including an ICAC investigation confirmed on August 24 - to thoroughly and strongly review all the allegations made and to look at the culture of the relevant government departments.
“Our members have always supported a fair and equitable approach to compliance and would welcome consistency across the Basin.”