Proposed Basin Plan consultation report

Augmenting water supplies

175.Issue

Submissions supported the construction of infrastructure projects to divert water into the Murray–Darling Basin, transporting water from areas with high rainfall or water storage into the Murray–Darling Basin.

The opinion was usually accompanied by the belief that an infrastructure scheme such as the Bradfield scheme would provide water to communities in the Murray–Darling Basin during times of drought and would also provide water to the environment.

RESPONSE

Recent studies have investigated proposals to transport water from higher to lower rainfall areas. All have concluded that proposals to transport water typically have very high economic, energy, social and environmental costs.

As water becomes scarcer, it becomes more valuable. However, if water prices become high enough to make a long pipeline or canal economically viable, then alternative water supplies such as desalination may also become economically viable. Using available water more efficiently, and developing new local water supply sources — particularly those that rely less on rainfall — are considered better options than transporting water long distances.

The viability of such proposals must also consider the negative environmental and social impacts in the system from which the water would be transferred.

176.Issue

Submissions expressed a desire for more dams to increase water supply. This was often expressed along with praise for past dam construction and existing infrastructure such as the Snowy Mountains scheme.

Some submissions did not support further water infrastructure projects, including opposing the construction of more water storage projects, such as dams.

RESPONSE

The proposed Basin Plan does not provide for large-scale infrastructure projects such as new dams because this is outside the Plan’s scope. Proposals for new dams are the responsibility of state governments.

While new dams cannot be ruled out, MDBA notes there are real obstacles to them proceeding. These include lack of options for suitable dam sites in the Basin, the high financial cost and the requirement to ensure cost recovery from users, the environmental impacts (at a time when the Basin Plan is trying to establish a more-natural flow regime in the Basin’s regulated rivers) as well as likely difficulties in obtaining environmental approvals.

177.Issue

Submissions called for more desalination to increase water security. These submissions generally expressed this view in respect to urban water supply, and supported existing desalination plants.

RESPONSE

Proposals for desalination plants are not within the Basin Plan’s scope; however, proposals for desalination for metropolitan areas have been supported by state agencies, often with Australian government assistance.

Water buyback program

178.Issue

Submissions about the potential role of water buybacks ranged from strong support for the buyback program to concern about how it was being implemented and the potential for unintended social and economic impacts. Some expressed the view that the buybacks would cause significant economic damage to communities; others questioned how voluntary some sales were and expressed concern over the ’Swiss cheese’ effect.

Concern was also expressed about the transparency and accountability of the buyback scheme that it was not well-targeted, and that buybacks alone could not adequately solve the problems of the Murray–Darling Basin.

Some also questioned the value of the water purchased to date, and whether the government should be buying only high-security water.

Submitters held strong views that the ‘bridging the gap’ program should focus first upon improving irrigation infrastructure and efficiency, arguing that leaks and inefficiencies should be fixed before water was taken from productive use. There was a view that, although more expensive than purchasing water, upgrading infrastructure would bring longer term benefits to communities. Submissions supported the MBDA Chair’s commitment to advise governments to put an emphasis on infrastructure upgrades to save and recover water.

There were also submissions that expressed support for buybacks and the positive impact buybacks have had for some irrigators. Comments indicated the view that in some areas, buybacks were the only option because all water reform policy and infrastructure work had already been done and buybacks remained the last option to recover and save water.

Submitters also expressed the view that buybacks had underpinned water prices, provided a genuine and much-needed option that brought money into Basin communities, worked to the advantage of remaining irrigators and provided options for those exiting. Some submissions also referred to the Productivity Commission’s findings that buybacks were economically preferable because they provided better value for money than infrastructure upgrades.

RESPONSE

MDBA considers that the Australian Government’s water purchase program is an important part of the mix of options to recover water for the environment. The water purchase program provides important opportunities for many irrigators who wish to sell part or all of their water entitlements at a reasonable price; to reinvest in their farms; to diversify their operations; to retire debt; or to exit irrigation altogether.

However, based on MDBA socioeconomic analyses, MDBA notes that recovering water through purchases alone could have serious detrimental effects in communities that rely heavily on irrigated agriculture. MDBA acknowledges that if farmers sell their water and stop irrigating, there could be flow-on effects on the communities that support and rely on irrigation farming.

For this reason, MDBA considers it important that, where there is a clear benefit over costs, there should be an investment bias towards water recovery that supports infrastructure and environmental works and measures that can deliver efficiency savings.

MDBA also notes that it is a long-standing Australian Government policy that there will be no compulsory acquisition of water entitlements. The Australian Government has committed to ‘bridge the gap’ through water-saving infrastructure and water purchases from willing sellers.

MDBA considers that where buybacks are used as a tool for water recovery, it needs to be made very clear where and what type of entitlements (e.g. high or low security) will be purchased. The mix and location of entitlements will clearly determine which agricultural industries and communities are affected.