In light of recent media coverage following the Senate’s vote to block the Federal Government’s changes to the Murray-Darling Basin Plan, Waterfind has collated resources from news, industry and authority sources to provide an overview of the potential impact.
What is the Murray-Darling Basin Plan?
Balancing the Basin's Water
What is the Murray-Darling Basin Plan and why are we still talking about it?
The Murray-Darling Basin Plan is an historic, bipartisan agreement about how to use the water that flows down the nation’s longest river system.
It was signed into law by then-prime minister Julia Gillard on November 22, 2012, after the Commonwealth reached an accord with each of the Basin states: Queensland, New South Wales, Victoria, South Australia and the Australian Capital Territory.
But the plan remains highly controversial.
Some argue it didn’t go far enough in favour of the environment and won’t return the rivers to health.
Others say it went too far, causing irreparable damage to irrigation-dependent communities and agricultural production.
What is the Basin Plan and how does it work?
The Murray-Darling Basin drains one-seventh of the Australian continent, and represents one-third of its agricultural production.
It is home to more than 2 million people and 16 Ramsar-listed wetlands.
It is more than 2,500 kilometres long, on one of the driest continents in the world.
Trying to balance all of those sometimes-competing priorities makes Murray-Darling water sharing one of the most divisive and complicated policy issues in the country.
That was brought into sharp focus during the Millennium drought (which ran approximately from 2002-2009), leading to the passage of the Howard government’s Water Act in 2007.
That committed $10 billion towards a decade-long effort to reach a national agreement on water use in the Murray-Darling, to redress the over-allocation of water licenses and to return water to the environment.
The 2012 Murray-Darling Basin Plan was the result of that long and painful process.
Broadly speaking, it plans to remove 2,750 gigalitres of water from irrigated agriculture, and return that to the river system.
As of the end of June 2017, a little over 2,080 gigalitres had been recovered through a mix of government purchases of water licences, and taxpayer-funded infrastructure improvements.
In return for making their farms more water-efficient, farmers surrender the water they save to the Commonwealth.
If it was signed in 2012, why are we still talking about it?
In order to get all the Basin states to sign up to the Plan, a couple of the really hard issues were effectively left unresolved in the document that became law in 2012.
Specifically, the Plan included an ‘adjustment mechanism’ which could be used to change the 2,750 gigalitre water recovery target, but it left it to future governments to work out how, or if, that should happen.
To put it simply: those chickens are now coming home to roost.
Before the end of 2017, the Commonwealth and Basin state governments have three key decisions to make.
The first decision is whether to accept the recommendation of the Murray-Darling Basin Authority, that the Commonwealth reduce the amount of water it acquires for the environment in the Northern Basin.
That followed the findings of the MDBA’s Northern Basin Socio-Economic Review last year, which confirmed that removing water from agriculture has smashed employment in irrigation-dependent communities like Dirranbandi, Queensland and Collerenabri, NSW.
The second decision is for the states to finalise a list of major infrastructure projects designed to deliver environmental water more effectively and efficiently in the southern end of the basin.
If those are adopted, and the states can prove that they can achieve the same or a better environmental impact by delivering less water more efficiently, the Commonwealth can use the Basin Plan’s ‘adjustment mechanism’ to reduce the amount of environmental water it acquires by up to 650 gigalitres. That would set the target at 2,100 gigalitres, and we’re already at 2,080 gigalitres. So accepting those projects is a big deal.
The third decision, arguably the most sensitive political fight of all, is whether the Basin governments decide it’s possible to use the ‘adjustment mechanism’ to deliver an additional 450 gigalitres of environmental water on top of the Plan’s 2,750-gigalitre target.
The plan says the additional water can only be delivered if it would have a ‘neutral or improved’ socio-economic impact on Basin communities.
Federal Labor and South Australia are adamant: that water must be delivered, or the environmental outcomes promised by the plan won’t happen.
The Commonwealth, NSW and Victorian governments aren’t so sure it’s possible to deliver the extra water without hurting the social and economic fabric of communities upstream.
Right, but what does ‘neutral or improved’ actually mean?
That is the question.
There is now a political argument about the definition of ‘neutral or improved’ socio-economic outcomes.
The Basin Plan says that if a farmer chooses to sell water to the Commonwealth, that is a ‘neutral or improved’ outcome because that farmer is being paid a fair price for their water.
But irrigators and many irrigation-dependent communities say that definition falls well short, because it doesn’t take into account the flow-on effect when a farmer sells water.
They argue that, while the farmer makes money, the sale might make it harder to deliver water to other irrigators. It might also reduce the whole district’s capacity to grow things, which in turn might affect employment. If jobs disappear and people need to go elsewhere for work, that could hurt businesses in town, or the local school might have to close.
Water Minister Barnaby Joyce is sympathetic to that view, while shadow water minister Tony Burke warned that reopening the plan and revisiting the definition risks destabilising or even destroying the whole endeavour.
Farmers and communities have had a win in another area though: the council of Commonwealth and state water ministers has signed off on a new socio-economic study for the Southern Basin, just like the one the MDBA did for the north.
This time, accounting and consultancy firm EY has been tasked with the job.
When they report back, those findings should add to the political debate about whether it is possible to deliver the extra 450 gigalitres for the environment.