The Great Barrier Reef is in the worst state it's been in since records began and will be "pretty ugly" within 40 years, Australian scientists say.

A Senate committee is investigating how the Australian and Queensland governments have managed the reef, with Unesco to decide next year whether to list it as a world heritage site in danger.

Scientists have told the committee the reef is facing threats from coastal development, such as a massive port-related dredging project at Abbot Point, farm runoff and poor water quality. The reef cannot rejuvenate after times of stress as it once did, the scientists say.

The Australian Coral Reef Society – the oldest organisation in the world that studies coral reefs – says coral cover has halved since the 1980s, when the reef was listed as a world heritage asset.

By 2050 there will be fewer fish and large swaths of seaweed where complex coral structures once thrived, society president Peter Mumby said.

"It will be really pretty ugly," Mumby told the committee. "And the ability to earn a livelihood will be vastly diminished.

"The reef is in the worse state it's ever been in since records began. There is so much scope to improve governance."

The committee was told funding for the Great Barrier Reef Marine Park Authority had been cut, and the commonwealth was set to devolve its environmental approval powers to the states, meaning big projects would only be assessed once.

The director of the Global Change Institute at the University of Queensland, Ove Hoegh-Guldberg, said current efforts to help the reef were inadequate.

"The threats are escalating," he told the hearing. "It is time for a rethink. We are living in a fantasy land."

Three million cubic metres of sand and soil will be dredged for the Abbot Point port expansion. It will be dumped offshore, inside the Great Barrier Reef marine park area but about 40km from the nearest reef.

Ports Australia’s chief executive, David Anderson, said offshore dumping was cheaper and better for the environment than onshore dumping. But the effects were misunderstood and overstated, he told the hearing.

"We have been working with departments to ensure the World Heritage Committee is provided with the most robust scientific information," he said. "The sediment impacts of dredging are minor in comparison to those from river discharges and cyclones."

The Queensland Resources Council chief executive, Michael Roche, said the impacts of dredging were localised and temporary, and would not affect the long-term health of the reef.

"We are asking the [Senate] committee to focus on the real facts and the real science and not be distracted by a lot of the emotive campaigns against the resources sector," he told reporters outside the hearing.

"Dredging is required to keep ports open and to expand. It creates shipping channels, which is an important part of our economic infrastructure as our railways and roads are."

A protest was held outside parliament before the hearing began. Environmentalists and mining lobby groups are due to give more evidence on Monday.