By TIM HUGHES

GOOD MORNING, It is quite a privilege to be here in the harrowed burrows of Parliament House, to talk about something that needs to be debated elsewhere in this building. I guess politics is all about what happens in the backrooms, so its probably not a bad place to start.

As the non-politician of this morning's speakers, I feel I owe it to you to give you a bit of background about myself, and the reason I came to be here.

I am a sixth generation sheep and cattle grazier on the New England tablelands of northern NSW, our farm on the watershed of the uppermost readchers of the Murray Darling basin on the one hand, and the catchment of Australia's largest eastern-flowing river the Clarence, on the other. In our neck of the woods, the possible diversion of the Clarence westward gets an airing from time to time, with favourable reception. Its an idea mooted by pro-development bodies ranging from western irrigators, to local politicians only interested in the employment opportunities that such infrastructure could bring, and lately on an even larger stage, has attracted the interest of Jeff Kennett and billionaire businessman Richard Pratt.

May I say I am also well acquainted with tiers of government. My district is one of those anachronistic donuts, where the town has one local government body, and the rural area surrounding it, another. In our instance, our farm is in the shire, but bordered on one side by the town council. Its an interesting anomaly; the shire council pay for the upkeep of the airport, which is naturally out of town, while the town council looks after the saleyards, where the sheep and cattle from the district are sold. Everyone in the district uses the sporting fields and shops in the town, and everyone drives on the roads in the shire - including one state and one federal highway - but still we have this absurd separation of powers.

Expanding this further, as a landowner I pay rates also to the Northern NSW Rural Lands Protection Board, a state body which looks after the stock routes and undertakes some feral weed and animal control. It's boundaries traverse at least four local government areas, and both the Murray Darling and eastern river catchments.

And then of course, above that, is the state of NSW, run by a government which, according to state budget papers, returns to the regions which make up 90 percent of the land mass and is home to 32 per cent of the state's population, only 18 percent of the funding. And higher still, our federal parliament here. So in this troubled world, I feel very secure with all those levels of governance over my head.

I am also a freelance journalist. Last year I wrote a piece for The Australian's Opinion page reflecting concerns about how, in the year celebrating our Centenary of Federation, the focus on bread and circus festivities excluded any serious attempt to even debate the very relevance of the states today.

In truth there were three relevant occurances, although they received little publicity.

The first was the proposed merging of the NSW/Victoria border cities of Albury Wodonga into Australia's first national city. The second, was the discovery by residents of the northern NSW border town of Jennings, that they actually lived in the Queensland address of Wallangarra, and not NSW after all. Some Centenary of Federation surprise that one.

And the third was the suggestion by New Zealand cabinet minister Steve Maharey suggested his country might one day merge with Australia. At least someone had been looking at the big picture, even if they were from the other side of the Tasman.

Throughout the year, we again heard the calls for a republic and bill of rights. But any constitutional reform must also seek to address the absurdities of our own very real, if non-violent, border conflicts, water being one issue that comes to mind which I know we will talk about more today.

The Victorian and New South Wales governments' joint proposal to merge the border centres of Albury-Wodonga into a 'national city' with its own integrated health, education and administrative services was touted as one way of overcoming the discrepancies residents face on anything from dog permits and drivers licences to school rules and medical registrations.

As a media event, it made for good copy about the possible demise of intra-community state rivalry. Missing, though, was any commentary analysing why the very idiocies that such a plan seeks to overcome, still exist.

While acknowledging the confusion still encountered by border-dwellers, the concept is a feeble attempt to address very real boundary issues that were supposed to have vanished with Federation 100 years ago.

Streamlining two lots of red tape at Albury-Wodonga may be all very well, but a year later, it is still unclear whether the concept really is about minimising anomalies at the middle tier of government, or merely vesting responsibility to another - either a new federal jurisdiction, or an enlarged local council with expanded powers? And its not as if Albury-Wodonga is alone here - what about Coolangatta-Tweed Heads, or indeed, the confused residents of Wallangarra-Jennings?

Now for me as someone from the New England region, a curious twist to the Albury Wodonga proposal is the appointment of our former MP Ian Sinclair as head of the working party, given that for much of his 35 years as federal Member, his constituents campaigned vigorously for a state of their own.

Formally proposed in state parliament in 1922, the New England New State Movement reached its zenith in 1967 when then NSW premier Sir Robert Askin held a referendum on the issue. Despite the unwelcome inclusion of Newcastle into the proposed state, a majority of voters were still reported to be in favour of cessation, however the proposal was narrowly defeated, allegedly because bureaucrats, in the week before the referendum, claimed Hunter Valley dairy farmers would be excluded from the Sydney milk zone. That's right: state tariffs and trade barriers certainly didn't disappear at Federation, just ask any milk producer what the 2001 de-regulation of the NSW dairy industry was all about.

Elsewhere, Far North Queenslanders have been agitating for self-government since 1852 when it was proposed by John Dunmore Lang. While in Western Australia - reluctant even in 1900 to federate for the very reasons echoed today - the Labor government's wish to reduce the number of non-city seats will surely drive an even larger wedge between the metropolitan south-west and the state's vast asset and income rich interior.

Instead of a debate about revisiting the relevance of our current government framework in totality, which would have made a fine and visionary celebration of federalism, we were left with the junket trip to the Old Dart and fireworks that had to be bigger and better than ever simply to partly satisfy the jading pallets of coliseum-goers in our capitals.

And so to the Murray Darling, beyond Federation.

At present, the Council of Australian Governments, or COAG, don't have an agreement about how to manage our most important river system, how to balance the needs of environment and industry, because Queensland refuses to sign, arguing that the state's agricultural industries haven't yet been able to 'develop' the water resource in their state in comparison with, say, NSW and Victoria.

One of the criticisms often directed at those advocating new states is the duplication of powers, and the accompanying inefficiency and bureaucracy that goes with it. If four states cannot even agree on the proper management of the Murray Darling Basin, with Queensland refusing to sign so how could five, six, or perhaps a dozen?

Increasingly, there are so many areas where discrepancies and duplication occur between nine state, territory and federal jurisdictions. Health and education are perhaps the two other main ones that spring most to mind. Recently, responsibility for the nation's public liability insurance is invariably either a state or federal responsibility, depending on who one speaks to.

So in terms of the Murray Darling, surely the dis-union between the states and the Commonwealth on the river's management, should be vested ultimately with the Federal parliament. Christopher Pyne has already spoken about the history and background of efforts to vest powers with the Commonwealth, and on this matter I agree largely with his sentiment.

The fact is, the natural landscape does not reflect the arbitrary boundaries surveyed by men 150 years ago. Now it may come as a surprise to many of you, but there are some farmers who are actually leading the pack and providing the model in a microsystemic kind of way. There are changing attitudes in the back blocks.

Bores are being capped in NSW and Qld to dramatically increase water efficiency by tackling evaporation and wastage.

Increasingly, farmers are undertaking a thing called whole farm planning, where they are re-fencing their paddocks and managing their land according to the natural landscape, its water flows, its soil types, abandoning the layouts put in place when they were first surveyed according to rigid portion blocks.

At the next level, river Catchment Management committees (CMC's) co-ordinate rehabilitation work and the funding for Landcare projects on a catchment basis. Indeed, these CMC's are, in a lot of cases, in the situation where they have agreement down stretches of the Darling's tributaries, but are to a certain extent hindered because of disagreements between the states, whose boundaries these committees sometimes traverse.

Just as farmers well know that rain and rivers don't respect an arbitrary fenceline, (unfortunately a lot of the time!), neither do the elements care whether they are in Queensland or South Australia.

As a broad generalisation, rural NSW is currently dealing with several pieces of legislation which seek to restrict some traditional farming practices, including limitations on clearing. I'm not going to enter the debate about these reforms, but the point I will make is that while the hammer is being weilded by the NSW Government, the environmental rehabilitation work identified by the CMC's and administered by Landcare, is generally funded from the Commonwealth - especially through the Natural Heritage Trust - not the states. This Sydney-centric decision-making may appease the environmental sentiments of urban dwellers, but in the country it is seen as cynical and vote driven when one considers there is little that seeks to address the state regime's own problems of effluent outflow, car emissions and the lack of decent public transport. Solve Sydney's problems? Just build another freeway...a toll-way at that.

But I digress.

In January, I wrote a story for The Australian about a group of four farming families near Armidale, in northern NSW, who have thrown open their gates and united their land and resources for the common good.

The four properties all adjoin a degraded creek, which, as individual properties, they all needed access to for stock water etc. Under their model, instead of making individual decisions about how their own section of the watercourse is managed - which could have meat competing interests - they are now working co-operatively to use the resources within a landscape, rather than within their old farm boundaries.

The project, initiated by one of the landholders and the University of New England's Institute for Rural Futures, harks back to the European commons system, still in operation today.

What has resulted are benefits for the natural and social environment of which they are a part.

Before, each of the properties was set-stocked. Now, the 300 cattle have been brought together in a single herd and grazed alongside 400 kidding goats in a rotation across the aggregation, giving each property regular rest from grazing, something that never happened before.

Winter hay no longer has to be brought in. Chemical inputs are now virtually nil, and organic accreditation is underway. Diversification opportunities are being discussed.

About a quarter of the land, including the creek which joins the properties, has been set aside

for conservation. The project has allowed members to increase their scale of production but with greater consideration for land and water quality.

There are also social benefits for the members of the common. In a model like this, farmers could stay on their properties and still find a role when they can no longer do the hard work outside, while others could concentrate on where there skills lie, rather than having to be jacks-of-all-trades.

The project has attracted outside interest, with financial assistance coming from industry research and development group Land and Water Australia; the Natural Heritage Trust and the NSW Department of Land and Water Conservation. A graduate student from UNE's Institute for Rural Futures monitors bio-diversity.

There have been hurdles; one of the biggest problems was that legal and government institutions fail to recognise property owned in common, although some property law such as strata title and forms of agricultural tenancy have been helpful. Land titles are still held by each family, but managed in co-operation.

Group decision making has been the greatest challenge for the farm manager, who says there are often diverse ideas that have to be thrashed around at a meeting until there is an outcome everyone is happy with.

Now I'm certainly not proposing that all the landholders along the Murray Darling basin, or indeed any other catchment, merge their resources. What I am suggesting is that if farmers can overcome generations of thinking and change their attitude as to what constitutes a boundary, and how the elements within that boundary are managed with the bigger picture in mind, why can't politicians?

Now while I agree with Christopher that the Murray Darling should be vested with the Commonwealth, but its not as simple as that.

The Murray Darling is not just about the big rivers, but the small ones. And its not just about who can take water out of the rivers and how much, but who contributes as well. Although I have no irrigation on my farm, I am directly involved already. How? Because I live in what is called the high rainfall zone of the ranges, receiving 900mm a year country. In a sense, we are the roof of the nation, from which the runoff flows into the rivers. As the owner of land traditionally valued and bought for high prices because of this rainfall security, I and a lot of my counterparts look on with interest at the massive capital gains brought about by 'development', where country with a natural rainfall only half or a third of what we receive has been transformed by the waters it draws out of the rivers, water that fell out of the sky in the ranges. May I suggest that 'who owns the rain' is another issue, but one that must also be resolved at a national level.

In saying that I must acknowledge irrigation farmers who are looking at more efficient water use. Near Moree in the Gwydir Valley in north-west NSW - it boasts to be the riches agricultural shire in the country - some cotton farmers are turning over their irrigated cotton country to walnuts and pecans instead, given that not only do they return more dollars per MegaLitre used, but as a permanent crop use less water overall.

As unfortunate as the over-allocation of irrigation licences may have been, it must not be forgotten that is has resulted in food and fibre industries worth billion to Australians and give consumers arguably the cheapest and cleanest products in the world. Water has brought about security and expansion for regional centres, helped to create an infrastructure that just can't be pulled out like a rug from underneath communities. The social, capital and environmental outcomes would be immense, impacting on many other areas of responsibility, currently resting with the states, such as regional development, housing, health and roads.

So should such a precedent be set with this transfer of responsibility - which I understand from Christopher's speech will require a referendum - then there would surely be the need for associated areas of dual jurisdiction and all the anomalies that went with them, such as health and education, to also be handed over to the Commonwealth. Should this happen, it would of course water down (no pun intended) some of the traditional legislative responsibilities of state governments. Already, the Federal governments' tax reform package has undertaken this to some degree, with many state taxes being abolished and replaced by a federal GST, the proceeds of which are forwarded to the states by the Commonwealth.

That being the case, the states would in a sense become more like local governments writ large, but undoubtedly they would maintain a capital city focus, further reducing adequate resources flowing back to the regions.

One thing state governments of all persuasions are doing is encouraging - indeed, coercing - local council amalgamations to create much larger regional entities. So given they would have reduced powers, the question must be asked if the answer wouldn't be to do away with the states altogether and have a county-style or district borough system, such as in the United Kingdom, instead. (It's not a new idea; in fact it's long been a policy of the Democrats, but few others seem brave enough to run it up the flagpole.)

To many, it all sounds too hard. But the creation, amending or subdivision of states is already vested with the Commonwealth under chapter six of the Constitution. So that's the easy part, especially given Australia's historic defeat of referendums.

All it would take is a bit of conviction. I don't claim to have any answers, but I do say let's have the discussion.

Reforming our legislative landscape to ensure the future of the Murray Darling basin is vital, but it's just the start. Looking at the sustainability of not just our natural resources, but our social and cultural ones as well - just like those farmers near Armidale are doing - demands and deserves a more comprehensive debate.

(ends)