The Council of Australian Governments (COAG) agreed in
principle in Adelaide on 26 March 2008 to a Memorandum of
Understanding (MOU) on Murray-Darling Basin Reform that could
remove decades of debate between the Commonwealth and State
Governments over water rights.
The COAG MOU aims to establish a cooperative and accountable
governance arrangement to enable genuine whole-of-Basin water
management to restore the environment and ensure sustainable
In order to implement the reforms, the Commonwealth and the
Murray-Darling Basin states (New South Wales, Victoria,
Queensland, South Australia and the Australian Capital
Territory) have agreed that the Murray-Darling Basin Authority
and the Murray-Darling Basin Commission be merged into a single
institution, to be known as the Murray-Darling Basin Authority
The new, independent Authority will be responsible for
developing, implementing and monitoring the Basin Plan, which
will include a sustainable cap on surface and groundwater
diversions from across the Basin. COAG is also working to
expand existing knowledge on sustainable yields across all
major river systems in Australia.
The Basin Plan will provide for the critical human water
needs of communities that use water from the Murray River and
its tributaries, for sustainable industries and for enhanced
environmental outcomes. The Commonwealth has also agreed to
honour existing water resource plans in all jurisdictions,
including those Victorian plans that continue until 2019.
COAG have also agreed on significant changes to the National
Water Initiative risk assignment framework, which is enshrined
in the Water Act 2007 (Cth). The framework will now
commence from the date existing water resource plans in the
Murray-Darling Basin cease to have effect, which will vary from
state to state.
The Commonwealth has also agreed to assume 100 per cent of
the risk of any reduction in water availability that is
attributable to improvements in knowledge about long-term
sustainable diversion limits that exceed 3 per cent of the
relevant diversion limit in each 10 years period. Previously
the states assumed one-third of that risk.
The Commonwealth Minister for Climate Change and Water is
responsible for approving the Basin Plan under the Water
Act. However, a new Ministerial Council, comprising all
Basin states and chaired by the Commonwealth, will be
established under the Water Act to advise the Minister
in relation to the Basin Plan. Importantly, if the Minister for
a Basin state disagrees with the proposed cap or other parts of
the Basin Plan, these matters will be referred back to the
Authority for reappraisal.
As part of securing Victoria's commitment to the
MOU, the Commonwealth Government has agreed in principle to
fund 90 per cent of the project costs (up to A$1 billion) of
the Stage Two Food Bowl Project in Victoria, subject to a joint
due diligence assessment and environmental flow conditions. The
Victorian Government is already implementing Stage One of the
Project to capture approximately 225 billion litres per year of
water to be shared equally by local irrigation systems,
environment and Melbourne households and businesses.
Between now and the next COAG meeting in late July, the
Commonwealth is to agree with the governments of New South
Wales, Queensland, South Australia and the Australian Capital
Territory on priority water savings projects in the Basin for
The parties will also consider how the role of the ACCC
might be strengthened. Currently the ACCC advises the
Commonwealth Minister on water market rules and may also
determine water charges in the Basin under the Water
Governments will now consult with stakeholders on the
implementation of the MOU and have committed to signing an
Intergovernmental Agreement at the July 2008 COAG meeting. It
will be important to examine the detail regarding the
implementation of the MOU and, in particular, how it affects
individual entitlement holders in affected water resource plan
areas. Full details of the MOU are in the COAG Communique at www.coag.gov.au.
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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