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Murray-Darling Basin dry inflow contingency planning

Overview report to First Ministers
September 2007

Dry inflow contingency planning in the Murray-Darling Basin: fourth report

First Ministers have received the fourth Murray-Darling Basin (MDB) Contingency Planning Report from senior officials. The Premiers of New South Wales and South Australia and the Chief Minister of the Australian Capital Territory have agreed to the Report's recommendations.

Unfortunately the Premier of Victoria has said he is unable to agree to the report through public remarks that misrepresent its recommendations and the position of the Commonwealth. This is regrettable and prevents a joint statement by all First Ministers. I have therefore decided to release the report in full.

The key message of the report is that the 2007-08 water availability outlook for the southern MDB is serious and has deteriorated through August. Irrigation allocations across much of the southern Murray-Darling Basin still zero or very low.

Despite around average rainfall over large parts of the MDB from January to July 2007, inflows into River Murray storages so far in 2007-08 are still well below average. Inflows received in the 2007-08 season are among the lowest on record. Due to severely depleted storages at the beginning of this water year there is significantly less water in Murray System storages now than there was in August 2006.

At 27 August 2007 water availability was at 1500 GL (about 1250 GL above critical demand). This water is being shared under the water sharing arrangements agreed by First Ministers on 20 June 2007. Under the water sharing arrangements (at 27 August 2007) NSW is entitled to 195 GL and Victoria is entitled to 490 GL for consumptive use. The 13 GL of water available for environmental use is held equally by NSW and Victoria. South Australia is entitled to 262 GL for consumptive use plus 225 GL for dilution flow and 333 GL to cover losses. Transition to normal water sharing arrangements under the Murray-Darling Basin Agreement will not commence until total water availability reaches around 2200 GL.

Governments understand that continuing low water availability over the coming months will particularly impact on the horticultural and other water dependant industries. There has already been some loss of permanent plantings in the southern MDB and there is a significant risk that allocations will be insufficient to avoid further widespread losses of permanent plantings.

Water users will need timely and accurate forecasts of water allocations over coming months, so that they can make key management decisions. To ensure that information is available for this purpose, governments will continue to work closely with industry associations and stakeholder groups.

If below average inflows continue, the Murray System storage volumes at the beginning of 2008-09 are likely to be less than the low levels at the beginning of 2007-08. Governments have agreed to five principles (including the possible establishment of a reserve) that could underpin the arrangements to meet critical water supplies in 2008-09.

These principles are:

1. In managing issues around dry inflow planning, markets should be used to the maximum extent possible.
2. Arrangements (including the possibility of establishing a 'collective' reserve) should be established by the Murray-Darling Basin Commission in 2007-08 to ensure there is sufficient water in 2008-09 to enable operation of the river and delivery of agreed flows (including 696 GL dilution flow to South Australia), as well as provisions to manage projected poor water quality (particularly salinity and algal blooms).
3. To assist South Australia to store additional reserves, South Australia should be permitted to store reserves in NSW and Victorian airspace in Murray System storages. (It is noted that South Australia is able to access some or all of the volume needed to meet critical requirements from volumes provided for dilution and loss purposes.) To assist the ACT, storage arrangements may need to be negotiated with NSW and Snowy Hydro Ltd.
4. Operational decisions on the measures to be adopted, including the source, volume and timing of establishing a collective reserve should be made by the Murray-Darling Basin Commission in September 2007, taking into account SOG recommendations.
5. Jurisdictions are encouraged to allow water to be carried over from 2007-08 to 2008-09, which would be available in storages from the beginning of the 2008-09 water year. South Australian carryover held in NSW and Victorian airspace in Murray System storages should have the same priority for delivery as NSW and Victorian carryover. Delivery of any carry-over will depend on having sufficient water available to meet transmission losses.

The August 2007 overview report is available on the Commonwealth Department of the Environment and Water Resources website at: www.environment.gov.au.

20 September 2007

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