A sustainable future for the Murray-Darling Basin
Water for the Future - fact sheet
Department of the Environment, Water, Heritage and the Arts, 2009
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Record low rainfall and climate change are contributing to unprecedented economic and environmental stress in the Murray-Darling Basin, exacerbated by historical over-allocation of water.
There is an urgent need to strike a better balance between enough water to sustain the environment and enough for irrigated food and fibre production and other human needs.
To give the Basin the best chance of recovery and to provide a viable future for the people who depend on it, the Australian Government is taking urgent action to better share water between the environment, agriculture and other human needs.
The Australian Government is investing $12.9 billion in Water for the Future, a 10-year plan to secure water supplies for all Australians. The Murray-Darling Basin is a focus of this plan that aims to assist agriculture to adapt to changed weather patterns and improve river health.
An important part of Water for the Future is buying water from willing sellers and using it to meet core environmental needs. Not only are healthy rivers critical for sustainable agricultural production, they also support water-based tourism and the amenity of regional and rural cities and towns.
The long-term plan for the Murray-Darling Basin recognises the importance of irrigated agriculture to Australia. Expenditure on recovering water for the environment is more than matched by funding for infrastructure to help communities reliant on irrigation move onto a sustainable footing.
Funding will provide jobs and a boost for regional economies particularly through the construction of improved irrigation infrastructure.
This publication outlines what action is being taken to achieve a better balance between water uses in the Murray-Darling Basin.
River Murray at Bunyip Reach, SA
Photo: J Baker and DEWHA
Restoring the Balance
Water for the Future will assist to reverse environmental damage and to reform the way we manage water. A key element of the plan is the $3.1 billion Restoring the Balance in the Murray-Darling Basin program through which the Government is buying water entitlements from willing sellers.
Water entitlements purchased by the Government are managed by the Commonwealth Environmental Water Holder (see below) and will be used to protect and restore key environmental sites in the Basin that need water, such as internationally significant wetlands.
Water purchases to date
The first round of water purchases opened in February 2008 and closed in May 2008. The Government purchased entitlements for more than 20 gigalitres (20 billion litres) of water across the Basin.
In September 2008, the Australian and NSW Governments purchased Toorale Station near Bourke with an entitlement to 14 billion litres of water from the Warrego and Darling rivers. The Toorale purchase has the potential to return an average 20 gigalitres of water to the Darling River every year and up to 80 gigalitres in flood years.
Purchasing rounds across the Basin are open until 30 June 2009. More information on opportunities to sell water entitlements is available by calling 1800 218 478 or from www.environment.gov.au/water/mdb/entitlement-purchasing/index.html
Water entitlement purchasing
During purchasing rounds, owners of water entitlements in the Murray-Darling Basin are invited to submit an application to the Australian Government Department of the Environment, Water, Heritage and the Arts to sell their entitlement. This is completely voluntary and sellers are paid a fair market price.
Broadly, there is a three-step process involved in selling entitlements to the Government. It is similar to any other sale of a major asset.
The first step is to complete an application form and submit it to the department. This form includes the price that sellers want for their entitlements. The second step involves an assessment of the application to make sure it meets the criteria for purchase. The final step is conveyancing undertaken by the Government's solicitor to transfer ownership from the seller to the Government.
Detailed information about this process, including the criteria for purchases, is available from www.environment.gov.au/water/mdb/entitlement-purchasing/index.html
Once an entitlement is purchased, the Government is treated like any other entitlement holder and will receive an allocation of water for its entitlements only if water is available.
Currently, allocations of water to irrigators in the majority of catchments are extremely low. These will increase in future years if rainfall into catchments and dams increases.
Restructured stormwater drain, Victoria
Photo: J Baker and DEWHA
Irrigator-led group proposals
The Government has invited groups of farmers to work with their irrigation water provider to develop coordinated proposals for selling their collective water entitlements.
There are substantial benefits for groups of irrigators in the same region to work together. If they all sell their entitlements they can decommission or alter shared irrigation supply infrastructure such as channels and pipelines.
In these cases the Australian Government will consider contributing towards the cost of infrastructure work that saves water.
It also gives irrigators an opportunity to restructure their businesses with the proceeds of the sale of their entitlements.
When deciding to purchase water entitlements from irrigator-led groups the Government is looking for value for money, action to improve the efficiency of the area's irrigation supply infrastructure and evidence that all directly affected parties have been consulted.
Purchases of properties in conjunction with state governments
If a property with significant water entitlements comes on the market, the Australian Government will consider a joint purchase with the relevant state government.
Criteria that need to be met before the Government contributes towards such a purchase include value for money, the willingness of the relevant state government to manage the land for conservation purposes and the volume of water entitlements included in the sale.
Exit grant package for small-block irrigators
The Australian Government is providing financial assistance of up to $150,000 as a special exit payment to eligible irrigators on farms of 40 hectares or less. There is an additional $30,000 for other transitional assistance. The package is available to eligible irrigators who agree to sell to the Australian Government all of their entitlements to extract surface water from a watercourse. It is open until 30 June 2009.
In a departure from previously offered Australian Government exit grant packages, the value of the land and the principle house located on the farm are exempt from the assets test. An important element of the scheme is that farmers who access the grants will not have to leave their properties and can continue to farm using dry-land approaches if they wish.
Irrigators can obtain further information on the eligibility criteria for the grants from Centrelink on 1800 050 015. Information on the exit grants is also available at www.environment.gov.au/water/programs/entitlement-purchasing/small-block-irrigators.html
Basin Plan
To ensure that future water use is placed on a sustainable footing so that there is enough water for a healthy environment as well as vital agriculture industries and human use, the Australian, state and ACT Governments have agreed on a new way to better manage the Murray-Darling Basin.
An independent expert body, the Murray-Darling Basin Authority (MDBA), will develop and administer a strategic plan for the integrated and sustainable management of water.
To be called the Basin Plan, it will incorporate environmental watering guidelines for the use of water to benefit the environment, and a new cap on water diversions based on sustainable long-term use of surface water and groundwater.
As part of the work to develop the Basin Plan, the Australian Government funded the CSIRO to undertake a groundbreaking research project to assess current and future water availability in regions across the Basin. The reports of this Murray-Darling Basin Sustainable Yields project are available at www.environment.gov.au/water/mdb/yields.html or by calling 1800 218 478. The Murray-Darling Basin Authority will also use other research and will consult widely in the Basin before it sets the new cap or sustainable diversion limit.
Commonwealth Environmental Water Holder
The office of the Commonwealth Environmental Water Holder has been created to manage the water that the Government buys for the environment. The role of this position is to protect and restore the environmental features of the Murray-Darling Basin.
The Commonwealth Environmental Water Holder's water entitlements will be subject to the same rules as other water holders. This means that the Commonwealth's water allocations will reflect the available water in any season.
Water for environmental purposes will be used in accordance with the Murray-Darling Basin Authority's Basin Plan. The priority for environmental water will be rivers and wetlands including those that support listed migratory and threatened species. A panel of scientific experts will assist the Commonwealth Environmental Water Holder to determine where to release water and when, so as to maximise the environmental benefits. More information about the Commonwealth Environmental Water Holder is available at www.environment.gov.au/water/environmental/cewh.
Gwydir Wetlands, NSW
Photo: D Markovic and DEWHA
Water for the environment
The Murray-Darling Basin incorporates Australia's three longest rivers and is one of our most diverse regions. It stretches from Queensland's channel country through NSW to the Australian Alps, Victoria's north-east and the Riverina, and on into South Australia's Riverland and the Coorong at the mouth of the Murray. The Basin contains more than 30,000 wetlands, including 16 internationally significant sites that provide habitat for migratory birds.
Water use in the Basin has increased five-fold in less than a century. Over-allocation has been exacerbated by severe drought and the early impacts of climate change. There is insufficient water to maintain the Basin's natural balance and ecosystems, resulting in a marked decline in its ecological health.
Many species that once were common are now rare and listed nationally for protection under the Environment Protection and Biodiversity Conservation Act 1999. At least 35 bird species and 16 mammals that live in the Basin are endangered. Twenty mammal species have become extinct since 1900 and Murray Cod, Australia's largest freshwater fish which was once widespread, is in severe decline.
In 2003, 80 per cent of the remaining River Red Gums on the Murray River floodplain in South Australia were stressed to some degree due to the combination of human activity and drought, and 20-30 per cent of those were severely stressed. With the ongoing drought the situation is significantly worse now.
The first basin-wide report card on the ecological health of the Murray-Darling Basin, the Sustainable Rivers Audit conducted between 2004-2007 over 96,000 km of rivers and streams, found long-term degradation in most of the Basin's valleys. Read more about the audit at www.mdbc.gov.au/SRA
CSIRO's work through the Murray-Darling Basin Sustainable Yields project, conducted during 2007 and 2008, revealed that consumptive water use in the Basin has reduced average annual streamflow at the Murray mouth by 61 per cent. Water fails to reach the river mouth 40 per cent of the time, compared to 1 per cent in the absence of water resource development. Climate change could further reduce flood events in many parts of the Basin, in some cases dramatically, affecting birds, fish, plants and animals.
Without adequate water for the environment, the Murray-Darling Basin's ecosystems will continue to deteriorate. CSIRO concluded that without changes to water sharing arrangements in the south of the Basin, climate change would be likely to lead to irreversible ecological degradation. Read the CSIRO report, Water Availability in the Murray-Darling Basin at www.csiro.au/mdbsy
Benefits of water purchasing
As well as helping to restore the health of the Murray-Darling Basin, selling water entitlements has direct benefits for farmers. Income earned from the sale of water entitlements can be used to reduce or retire farm debt or to reinvest in the farming enterprise, for example, in improving water efficiency infrastructure, spreading risk by diversifying into other forms of agriculture less dependent on irrigation or exploring off-farm options. These sorts of investments can return benefits to the district as well as individual irrigators.
Infrastructure improvements to achieve more sustainable agriculture
It is estimated 2,000 billion litres of water a year is lost in the Murray-Darling Basin because of inefficient water storage and delivery systems. The amount of irrigation water lost to leakage and evaporation is about the same as all our major capital cities consume.
The largest component of the Australian Government's Water for the Future plan is an investment of $5.8 billion towards improving the efficiency and productivity of irrigation water use and management in order to assist irrigation communities to adjust to a future with less water.
This huge investment recognises the importance of agriculture in generating wealth for the economy and is designed to ensure the industry has a secure and sustainable way forward. Overall, farming produces more than $31 billion in export income each year, including through irrigation, and provides fresh food for Australian households at prices that are low by world standards.
Despite the economic importance of irrigated agriculture, Australia has to become more efficient in the way irrigation water is managed and supplied, and in how it is used for food and fibre production. This means improving the efficiency of irrigation and ensuring the water market promotes high value use.
At the Council of Australian Governments' meeting in July 2008, the Australian Government reached in-principle agreement with the states and territories on the priority investments in more efficient irrigation in the Murray-Darling Basin. As part of this funding, these priority projects will receive the first $3.7 billion under this element of Water for the Future. The Australian Government has also announced its intention to call for project proposals from private irrigation operators at a later date.
Murray-Darling Basin, SA
Photo: J Baker and DEWHA
Water for the Future
Buying back water entitlements from willing sellers in the Murray-Darling Basin is one way the Government is working to support healthy rivers, one of the four priorities of Water for the Future. The buyback, combined with the Basin Plan, will put water use on a sustainable footing as we face the likelihood of reduced water availability because of climate change.
The Government is also preparing for the impacts of climate change by investing in more accurate monitoring, assessing and forecasting the availability, condition and use of water. This will complement the Government's wider climate change policy which includes funding for new energy technologies and establishing a Carbon Pollution Reduction Scheme to cut the nation's greenhouse gas emissions.
With less water available, it is important that the entire community is using water more wisely. In addition to Government funding for more efficient irrigation systems the Government is also providing support for households to install rainwater and greywater systems, and encouraging businesses that are high water users to reduce water consumption.
The Government is also working with state and local governments to secure water supplies for cities and towns by reducing reliance on rainfall through supporting desalination, recycling and stormwater use, as well as water-saving infrastructure and water treatment plants.
More information
For more information about Water for the Future call 1800 218 478 or visit www.environment.gov.au/water
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