Australian Government water purchasing in the Murray-Darling Basin

Australian Government investments in water recovery

The Australian Government has made a significant investment in reforming the Murray—Darling Basin over many years. The aim of the Basin Plan and the investment has been to ensure a healthy basin capable of supporting regional communities, agriculture and the environment. The Basin Plan contains water recovery targets to enable the environment to have its share of the available resource.

The Australian Government has provided funding under the Sustainable Rural Water Use and Infrastructure Program to recover water to assist with bridging the gap to the sustainable diversion limits (SDLs) in the Murray-Darling Basin Plan 2012.

This method of water recovery has been just one way that water has been recovered for the environment. Australian Government investments in water efficiency measures to save water losses and to deliver environmental water more efficiently have also been made. More information about these initiatives is also on the department’s website.

SDLs limit how much water can be used in the Basin by towns and communities, farmers and industries, while keeping the rivers and environment healthy.

To 30 June 2023, the Australian Government has recovered 1,231.2 gigalitres per year long-term average annual yield (GL/y) of surface water through purchasing.

When the Australian Government implements water recovery projects and programs – either through investment in water use efficiency projects such as upgrading irrigation systems on farms, or reducing water losses from irrigation delivery systems or buy purchasing water from the market, participation is voluntary.

Often, the Australian Government’s investments in water recovery projects provide multiple benefits to the participant which flow on to regional communities.

Refer to Progress on Murray-Darling Basin Water Recovery for more information

1,500 gigalitre cap on surface water purchasing

In 2015, the Australian Government legislated a 1,500 gigalitre cap on surface water purchases to ensure the Basin Plan delivers a balanced outcome for the economy, for Basin communities and for the environment.

To 30 June 2023, a total of 1,231.2 GL/y has been purchased by the Commonwealth to meet the Sustainable Diversion Limits. This includes 2.8 GL/y of water recovered from the South Australian Government in May 2016, which is exempt from the 1,500 GL/y limit on water purchases.

A total of 271.6 GL/y is left remaining under the cap on purchase of surface water entitlements.

Benefits of environmental water

The water already recovered is being used to make a real difference to the environment and the communities that depend on it. Environmental flows have:

• helped fish spawning, including the largest Murray cod spawning event in the last 20 years
• provided breeding habitats for thousands of waterbirds
• supported the recovery of important native wetland and riverbank plants
• helped to reconnect rivers in the Basin.

See the Flow-Monitoring Evaluation Research (Flow-MER) website for more information about how Commonwealth water for the environment is making a difference to the Basin’s rivers, wetlands and floodplains and for more information, visit the Commonwealth Environmental Water Office.

Previous purchases

The Australian Government purchased water for the environment between 2008 and 2020 using open, competitive tenders and strategic purchasing.

Find out about water purchases made for:

• surface water through limited tender
• surface water through open tender
• groundwater

Australian Government water purchases are also reported on:

• AusTender
• relevant state water registers.

In 2014, the Government released the Water Recovery Strategy for the Murray–Darling Basin.

The strategy outlined the government’s approach to recovering water for the environment, while maximising positive outcomes for farmers and communities in the Basin. This included prioritising water recovery through infrastructure investment over water purchasing. Any water purchases that were conducted focussed on high priority, strategically important initiatives.

These reports have demonstrated the scale of the challenge remaining, and that a mix of water recovery options will be necessary to ensure the outcomes of the Basin Plan can be achieved.

How we considered previous offers

When considering an offer to purchase water from an entitlement holder for previous purchases, the department consulted with the Commonwealth Environmental Water Holder to determine if and how a particular water type would benefit the environmental water portfolio.

The department also consulted with the Murray-Darling Basin Authority to understand how the water type being offered may contribute to environmental outcomes.

The department also considered:

• the seller’s business rationale for offering the water for sale
• any potential impact on the broader community, the environment or state governments.

Since August 2015 the department has received in excess of 100 unsolicited offers to sell water entitlements to the Australian Government. Some of these offers have aligned with the Australian Government’s goals and have resulted in water being purchased. Others have presented challenges.

For example, in some cases, the water entitlements on offer could not be protected from downstream extraction. The department could only consider these offers if adequate protections were in place. Otherwise the water would be of limited benefit to the environmental water portfolio.

How we assessed past purchases

The department’s assessment process evaluated each offer to determine whether the:

• water would contribute to bridging the gap to the sustainable diversion limits
• offer is within, or close to the market price as informed by expert valuations
• offer would meet the Commonwealth Procurement Rules.

If an offer passed the assessment process, the department sought approval from the Minister to purchase the water through a limited tender arrangement with the seller.

When the department purchases water entitlements, they are transferred from the seller to the Australian Government. The Commonwealth Environmental Water Holder then manages the water. They ensure it delivers the best environmental outcomes, while benefitting river communities.

Find out more about the Commonwealth Environmental Water Holder.

Survey of water entitlement sellers under Restoring the Balance in the Murray-Darling Basin

The Department of the Environment released a commissioned report by Marsden Jacob Associates that independently assessed the impact on participating irrigators of water sales to the Commonwealth. See Survey of water entitlement sellers under the Restoring the Balance in the Murray–Darling Basin Program.

Further information

Contact us for more information on Australian Government water purchasing in the Murray-Darling Basin.

Email: watertenders@dcceew.gov.au