Fact sheet: Sustainable Diversion Limit (SDL) adjustment mechanism

Department of Sustainability, Environment, Water, Population and Communities, November 2012

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The Murray-Darling Basin Plan must include a sustainable diversion limit (SDL).

The SDL is the maximum amount of water that can be taken for consumptive use. It takes effect in 2019. Current total consumptive use is above this level and water recovery for the environment is necessary to achieve the balance of environmental, social and environmental outcomes underpinning the SDL determined by the Murray Darling Basin Authority. The environmental water will be used to improve and maintain the health of rivers, lakes, major wetlands and floodplains within the Basin as well as important habitats for animals and plants that rely on Basin rivers.

On 21 November 2012 the Parliament agreed to legislation to amend the Water Act 2007 to provide a transparent and efficient mechanism to allow the Minister, on the advice of the Murray Darling Basin Authority, to adjust the SDL within defined limits to achieve enhanced environmental and socioeconomic outcomes.

Water Ministers from Basin jurisdictions had asked for the Plan to be improved by incorporating an adjustment mechanism for surface water SDLs.

What activities could lead to adjustment of the SDL?

Activities to be considered under the adjustment mechanism will either allow equivalent environmental outcomes to be achieved with less water or increase the volume of water available for environmental use with neutral or improve socio-economic impact.

The two different types of projects that will be considered by the adjustment mechanism for surface water SDLs are called 'supply' and 'efficiency' measures.

Supply measures are works, river operations or rule changes that enable the use of less water but still achieve the Plan's environmental outcomes. Such projects would allow the Basin Plan's 2,750 gigalitres (GL) recovery volume to be reduced, thereby reducing the social and economic impact of water recovery to achieve the Basin Plan's SDL.

An example of a supply project is the installation of infrastructure such as regulators on a floodplain to enable inundation events using smaller quantities of water than would typically be needed in a general 'overbank' flooding event.

Other supply projects include re-configuring lakes or storage systems to reduce evaporation, or decreasing water losses while delivering environmental water by reducing seepage or evaporation.

Some Basin governments consider that there are enough supply measures to reduce water recovery efforts by as much as 650GL.

Efficiency measures recover and provide more water for the environment without negative social and economic impacts. They include improving the efficiency of on-farm irrigation and transferring the water savings for environmental use. Such projects achieve water savings for the environment without adverse impact on production and would allow the Basin Plan's 2,750GL recovery volume to be increased without reducing productive capacity in the Basin.

Who will develop proposals for SDL mechanism changes?

Basin jurisdictions will have three years until late-2015 to consult with communities, develop proposals, and assess the benefits prior to presenting them to the MDBA for consideration.

At that time the MDBA will assess a single package of adjustment proposals developed by Basin states and the Commonwealth. In 2016, the Minister will be provided with a recommendation from the Authority about how much to adjust the SDLs for surface water.

What are the controls on making changes to the SDL?

Once approved by the Minister, final adjustments to the SDL will need to be tabled in Parliament as a disallowable instrument, adding to the transparency of the process.

Any adjustment must ensure no worsening of either environmental outcomes or social and socio-economic impacts.

The capacity to adjust the SDL is limited to within plus or minus 5 per cent in net terms and changes must be based the best available science using models and assumptions generally accepted by professional hydrologists and other experts.

Who will decide SDL mechanism changes?

The Minister will decide any changes to the SDL in 2016. This decision will be based on advice from the Murray-Darling Basin Authority (MDBA).

How will these projects be funded?

The Commonwealth has decided to provide funding of $1.77 billion to ease or remove key constraints and implement efficiency measures to recover a further 450GL of water for the environment. It has also decided to reallocate some existing funding for water purchases to fund any agreed supply projects recommended by the MDBA.

How would State water resource plans be affected by the SDL adjustment mechanism?

Any adjustment to the SDL will be determined by 2016. This allows time for the adjusted SDL to be reflected in state water resource plans prior to the SDL taking effect from 2019.

All projects that impact on the SDL through the adjustment mechanism will need to be completed by 2024.

Water recovery and the SDL Mechanism

Note: * The Commonwealth has made a commitment to 'bridge the gap' between current diversions and the sustainable diversion limit in the Basin Plan. In the absence of an adjustment mechanism, the recoveries to 'bridge the gap' would total 2,750GL.