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Murray-Darling Basin management

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90 Parliamentary Library Briefing Book: Key Issues for the 44th Parliament

Murray-Darling Basin management Bill McCormick, Science, Technology, Environment and Resources

KEY ISSUE The Basin Plan’s implementation is essential for the sustainable management of the Murray-Darling Basin.

Agricultural water use The Murray-Darling Basin (MDB) covers 14% of Australia and is home to over two million people. The Basin’s agriculture (both dryland and irrigated) accounts for almost 40% by value of Australia’s agricultural production.

The great bulk of the Basin’s water use is for agriculture. Most of the irrigated area is given to pasture and crops. Some crops (vegetables, fruit and nuts) yield relatively high prices for low levels of water use, but others (such as rice) produce lower value for high levels of water use.

The Basin’s highest water consumers in 2005-06 were for dairy farming, cotton-growing (20% of agricultural water), pasture and rice.

Water is also needed for domestic and industrial uses and to maintain life in the rivers and floodplains. As a result, the MDB is the most highly regulated river system in Australia, which is complicated by the fact the Basin straddles four states and the ACT.

Environmental issues Many issues affect the water resources and ecosystems of the MDB including salinity, erosion, blue-green algal blooms, water quality, and invasive species. Climate change and resultant possible increases in drought pose a significant risk to the availability of surface water in the MDB.

The almost decade-long millennium drought, starting around 2000, caused significant damage to ecosystems as well as to the economy. It ended with widespread flooding in 2010, resulting in inundation of many floodplains and raising the Basin’s water storages from 32% to 81% during 2010-11.

The flooding enabled many species to recover from the effects of a long drought but also caused widespread damage to property.

The lower Murray as a threatened ecological community In August 2013, the River Murray and its associated wetlands, floodplains and groundwater system, was listed as a ‘critically endangered’ ecological community under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). Listed threatened ecological communities are matters of national environmental significance (MNES) under the EPBC Act and any new proposal may require approval under the Act. Only those proposals that have or are likely to have a significant impact on a MNES must be referred to the Commonwealth.

Early management The Commonwealth’s numerous attempts to facilitate the improved management of the MDB by the states were restricted by its limited constitutional powers over water and land use.

The 1915 River Murray Agreement, signed by the Commonwealth and New South Wales, South Australia and Victoria, was restricted to the main stem of the Murray. The 1987 Murray-Darling Basin Agreement addressed the broader problems of the MDB, including water quality, and established the Murray-Darling Basin Commission (MDBC).

To combat the over-allocation of water in the MDB, a cap on water diversions came into effect on 1 July 1997 for NSW, South Australia and Victoria. Programs such as the Living Murray were made to recover water entitlements so more water could stay in the rivers.

Present management and Basin Plan In response to the millennium drought and the continuing over-allocation of MDB water resources by the states, in 2007 Prime Minister John Howard proposed a $10 billion 10-year National Plan for Water Security. He called for the MDB states to transfer their powers to enable the Commonwealth to oversee the


Australia's environment

management of the MDB. The MDBC would be reconstituted as an Authority (MDBA), responsible for setting a cap on the sustainable use of Basin water resources.

Agreement was not reached with all the states, so the Commonwealth legislated to achieve its aims using only Commonwealth powers. The Water Act 2007 established the MDBA which is responsible for preparing the Basin Plan for the Minister. The Plan must contain:

• long-term average Sustainable Diversion Limits (SDLs) for the amount of surface water and groundwater that can be taken from Basin water resources

• an environmental watering plan

• a water quality and salinity management plan and

• rules about trading of water.

The social, economic and environmental outcomes of the water resources must not be compromised. The Plan outlines risks to Basin water resources, such as climate change, and strategies to manage them.

The SDLs are implemented through state water resource plans, accredited by the Commonwealth. There will be a five -year phase-in period for the SDLs for each Water Resource Plan before they start in 2019.

Programs of the incoming Labor Government in 2007 implemented much of the Howard Government Plan. The Sustainable Rural Water Use and Infrastructure program provides $5.8 billion to modernise irrigation infrastructure, thereby saving water. The Restoring the Balance in the Murray-Darling Basin program is investing up to $3.1 billion to address over-allocation in the MDB, including through buying back water entitlements.

In 2008, all the Basin states agreed to refer their powers to the Commonwealth, and the Water Act was amended accordingly.

Basin Plan implementation After the 2010 release for comment of the Guide to the Basin Plan there were significant public demonstrations against the proposal to reduce surface water SDLs. The MDBA raised

the SDLs in its November 2011 draft Basin Plan. The final Basin Plan was tabled on 26 November 2012.

Implementation steps of the Basin Plan include the 2013 release of the constraints management strategy; the 2014 release of the Basin-wide environmental watering strategy and new water trading rules; the 2016 determination of the adjustment to the surface water SDLs; and the 2019 start of the surface and groundwater SDLs.

Changes to SDLs The proposed reduction in surface water SDLs from a 2009 baseline is 2,750 Gigalitres (GL) per year, but 1,658 GL of this has already been recovered through projects and water buybacks.

The level of reduction of SDLs was a major issue during the development of the Basin Plan, with the South Australian Government wanting to increase the reduction in surface water SDLs. Two Acts have been subsequently passed to amend the Water Act.

The Water Amendment (Long-term Average Sustainable Diversion Limit Adjustment) Act 2012 permits the MDBA to adjust the SDLs by up to 5% (540 GL per year) in response to environmental works and measures proposed by the Basin states. The Water Amendment (Water for the Environment Special Account) Act 2013 provides for $1.77 billion to be deposited over the ten years starting 2014-15 to fund water recovery projects; $200 million of this will be used to remove key constraints which limit the amount of environmental water that can be delivered through the river system. These projects aim to return an additional 450 GL of environmental water so the SDLs can be reduced by 3,200 GL per year as requested by South Australia.

Further reading B McCormick, ‘Water’, Budget Review 2013-14, Research paper, 3, 2012-13, Parliamentary Library, Canberra, 2013, pp. 81-83.