The Australian Government is paying less for water entitlements because sellers are offering their water at lower prices. This reflects changes in market conditions in the southern-connected Basin which have resulted in the price of most entitlement types being lower in 2010 than those observed in 2008-09.

Recent prices recorded on water registers and prices reported through a survey of water brokers, conducted for the September 2010 quarter, indicate a further softening in the market, after earlier falls reflected in the March 2010 quarter survey.

Murray River entitlements held above the Barmah Choke provide a reduced set of options for environmental use compared with those below the Choke.

Price data from the Victorian water register indicates that above the Choke entitlements generally trade for less than equivalent entitlements below the Choke. Applying a discount to above the Choke entitlements is consistent with the value for money approach being used for the water purchase program.