What to look out for in 2013

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 reduction.

Unresolved and upcoming issues

In some senses, now the real work begins. The Basin Plan provides frameworks for more detailed plans on particular issues.

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 property
  • 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 decade.

Irrigation infrastructure operators will begin working toward achieving compliance with the new Water Trading Rules by 1 July 2014.

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, the 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 new rules
  • 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.