The Murray-Darling Basin Plan became law late last year. Below
is a snapshot of some key aspects of the Basin Plan and some
unresolved or upcoming issues to look out for in 2013.
Key aspects of the plan
The plan is to reduce consumptive water use by 3,200 gigalitres.
The total volume is significantly less than the maximum reduction
of 4,000 gigalitres foreshadowed by the "Guide to the proposed
Basin Plan" which was released in 2010. The 3,200 gigalitre
reduction includes 450 gigalitres of water savings derived from new
Australian Government spending on water infrastructure projects to
enhance water use efficiency.
There has been a significant rebalancing away from buybacks of
water rights and toward investments in water infrastructure.
Investments in water infrastructure are generally considered
preferable to buybacks from the perspective of minimising economic
and social impacts, so this shift should help deliver on the
Australian Government's commitment to optimise environmental,
economic and social outcomes.
Past, current and committed reductions mean that progress toward
reduced consumptive water use is already well advanced.
The plan allows up until 2024 to achieve the targeted
Unresolved and upcoming issues
In some senses, now the real work begins. The Basin Plan
provides frameworks for more detailed plans on particular
The Murray-Darling Basin Authority, in consultation with the
States, will begin the process of identifying, and ultimately
relaxing or removing, capacity constraints so as to accommodate
reducing consumptive water use by 3,200 gigalitres. This might
involve, for example:
increasing the volumetric capacity of outlets and channels
infrastructure works to move roads, raise bridges or relocate
structures on private property
easements to flood certain land
changing operating rules that currently prevent flooding of
roads, bridges, other public infrastructure and private
the development of the environmental watering plan will be a
vast and complex undertaking. It will raise all sorts of
interesting issues around topics like water shepherding and
piggybacking on natural flows.
There will be a process of preparing and accrediting water
resource plans. There have been some queries raised about the
extent to which the governments of New South Wales (NSW) and
Victoria will cooperate in this process. The Australian Government
has the power to step in if necessary.
State governments may propose environmental works and measures
as a means of contributing up to 650 gigalitres of the overall
reduction. Water savings made in this way will reduce the need for
buybacks of water rights. This 650 gigalitres is not apportioned
between the States and some stakeholders have expressed concern
that if one State does not contribute environmental works and
measures, the resulting buybacks may impact other States unfairly.
Consequently, the NSW Government has now capped buybacks of water
rights for environmental purposes to three per cent per valley per
Irrigation infrastructure operators will begin working toward
achieving compliance with the new Water Trading Rules by 1
How we can help
We played a role in shaping the Basin Plan, starting with the
initial consultation on the Water Bill 2007, and then
advising key water sector clients throughout each phase of its
development, including all the twists and turns around the
constitutional issues, the referrals of power by the States, the
House and Senate committee hearings, the Guide released in 2010,
draft Basin Plan released in 2011 and the final Basin Plan.
With over five years at the cutting edge of developments in this
field, we can assist in:
adapting to the Water Trading Rules, having already adapted the
water trading contracts and policies of some irrigation
infrastructure operators in anticipation of the commencement of the
advising on Australian Government-funded water infrastructure
projects to enhance water use efficiency or to facilitate subsystem
retirements, having represented clients in a series of these
projects worth over $500 million
issues arising out of identifying, relaxing or removing
capacity constraints so as to accommodate the reduction of
consumptive water use by 3,200 gigalitres.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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These reforms are largely targeted at reducing the cost of the capacity component of the Wholesale Electricity Market.
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