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Murray–Darling Basin

                                                                                                   

Water Rights

                             

The operating rules and constraints governing water entitlements, allocations, trades and transfers are provided on this page.

 

Operating Rules and Constraints

The wide range of hydrological characteristics and water infrastructure existing within the Murray–Darling Basin (MDB) region has led to the development of varying administrative arrangements. In addition, interjurisdictional cooperation is required to manage water resources because they are shared by several jurisdictions. Interjurisdictional arrangements (the Murray–Darling Basin Agreement, in particular) and state water legislation (including state water management plans) are in effect to plan and manage the MDB region’s water resources, and impose operating rules and constraints.

The Murray–Darling Basin Cap (the Cap), established in 1995, provided a new framework for water sharing in the MDB. The Cap aims to limit yearly diversions to the volume that would have been diverted at the 1993–94 development level in most valleys – plus allowances in some valleys (MDBA 2009). The Cap did not restrain groundwater diversions.

The Cap is being managed in accordance with the set of formal rules in Schedule E of the Water Act 2007 (Cwlth). The Cap is managed based on diversion limits set at the valley level, with the designated Cap valleys defined in Schedule E . The implementation of the Cap within a State or Territory is the responsibility of the concerned government. The Murray–Darling Basin Authority is responsible for monitoring, auditing and reporting on the Cap compliance.

 

Water Entitlements

Water access entitlements (WAEs), when added to other statutory (non-entitled) water rights (landowner basic rights, etc.) represent the total volume of water rights that have been granted for use. A percentage of entitlement may be available for abstraction during the year, subject to allocations announcements (see Water allocations) and other licence conditions. However, access to water conferred by statutory rights may not all be subjected to allocation announcements.

In each State and Territory, WAEs and water allocation planning exist in a framework of state legislation and water management plans. Terminology and mechanisms for water sharing rules, WAEs, their granting, associated attributes and conditions, and the announcement of allocations vary between the States and Territories. A comparison of jurisdictional WAEs and their attributes is made in Table R1.

WAEs may be issued within regulated (called ‘supplemented’ in Queensland) and unregulated ('unsupplemented' in Queensland) systems in the MDB region. In a regulated system, licensees can call upon water against their available allocation from storages. In an unregulated system, licensees cannot order any water against their entitlement, but may extract water under specified flow conditions or events. WAEs in unregulated systems can specify maximum volumes that can be abstracted, either in one year or a period of several years.

In some MDB jurisdictions, diversions of water are possible in extreme events such as floods. Usually these flow events cannot be captured or retained within public storages. The corresponding diversions are known as off-allocation diversions, supplementary flows, water harvesting, overland flows or spillage sales.

It is possible that the National Water Account 2010 (the 2010 Account) categorisation of entitlements differs to jurisdictional definitions. The 2010 Account entitlement categorisation is based on flows (regulated or unregulated), not systems. The 2010 Account categorisation of an unregulated flow means that this type of flow can occur in both the unregulated and regulated system – for example, in the event of a flood.

As part of their commitment to the National Water Initiative, States are separating the bundled components of the right to access a share of the water resource (WAEs, where they exist) from the land and from the other water rights such as the right to abstract water – or have it delivered – right to use water for a given purpose and right to build a work.

Across the MDB, licences have been issued for hydropower generators. They are not reported on in this account as they are non-consumptive and not expressed in terms of volume.

 

    Table R1. Comparison of jurisdictional water access entitlements (WAEs) and their attributes 
Attributes New South Wales Victoria South Australia Queensland Australian Capital Territory
WAE – name issued by state legislation Water Access Licence 2000 Water share Water access entitlement Water access entitlement Water access entitlement
  Water Licence 1912 Bulk water entitlement   Water licence  
  Supplementary water access licence Water licence   Interim water allocations  
    Environmental entitlements      
WAE – name issued by irrigation corporations from a state-conferred bulk entitlement WAE issued by irrigation corporations/trusts   WAE issued by irrigation corporations/trusts    
Term Perpetual Perpetual1 Perpetual Water allocation – perpetual Perpetual
        Water licence has a term of between 5 and 10 years  
Access priority High security High reliability n/a

Supplemented water: high priority, high class A and high class B

n/a
  General security Low reliability n/a supplemented water: medium priority, risk class A and risk class B n/a
  Supplementary water   9 classes of licences have been established   n/a
  Available water determination Seasonal determination Water allocation Announced entitlement n/a

n/a = not applicable

  1. Water shares are perpetual, but licences for unregulated surface water systems and groundwater have limited terms and must be reissued periodically.

 

Australian Capital Territory water access entitlements

The Australian Capital Territory operates an unbundled system of entitlements. A WAE is an entitlement to the amount of surface water or groundwater stated in the entitlement. The amount must be stated as the lesser of the following (Water Resource Act 2007):
  1. a percentage of the total amount of the surface water or groundwater available for taking from time to time in the water management area stated in the entitlement
  2. a stated maximum volume.

A licence to take water, which specifies the location from which water can be taken, must accompany a WAE.

The water supply to Canberra is considered a regulated urban system, where water is diverted from storages.

New South Wales water access entitlements

  1. Water access licence: under the Water Management Act 2000, a WAE that entitles its holder to a share in the available water resource (the share component) and to abstract water (the extraction component). It is separated from the land and is tradeable. The share component of an access licence may be expressed:   
       
    • as a specified nominal volume over a specified period, or
    • as a specified proportion of the available water, or
    • as a specified proportion of the storage capacity of a specified reservoir or other storage work, and a specified proportion of the inflow to that reservoir or work.
             
        Water access licences can exist in regulated and unregulated surface water systems and in groundwater systems. In regulated systems, they are defined as either high security, general security or supplementary access. There are also specific purpose water access licences on issue - for example, local water utility, stock and domestic, conveyance (held by irrigation corporations to account for losses in their distribution systems).
     
  2. Water licence: under the Water Act 1912, a bundled entitlement that confers to its holder the right to take a specific volume of water as well as the works to be constructed in those water sources (rivers, lakes and groundwater aquifers) where water sharing plans have not commenced.  
  3. Supplementary water access licence: confers to the holders a right to abstract water during announced periods when flows exceed those required to meet other licensed obligations and environmental needs.
  4. WAEs: issued by irrigation corporations to their members through their membership agreements, and enable holders a right to access water as a proportion (as per their agreement with the irrigation corporation) of the irrigation corporation's WAEs conferred to it by the State. Holders of such WAEs are subject to the same terms and conditions of the WAEs as conferred to the irrigation corporation by the State, and are also subject to the corporation’s rules.

Queensland water access entitlements

  1. Water allocation: a permanent, unbundled (separated from land) and tradeable WAE that can exist in supplemented or unsupplemented systems. Is created only under a resource operations plan (ROP), either through the conversion of existing entitlements or issuing of new water allocations. 
  2. Interim water allocation (IWA): as all surface water systems within the MDB are covered by a ROP and a water resource plan (WRP), there are no WAEs in the region.
  3. Water licence: a bundled WAE, attached to land and not tradeable without land, that is valid for a fixed period of time, usually between five and ten years. Water licences include area-based licences and water-harvesting licences, which give access to unregulated flows in both supplemented and unsupplemented systems.

Supplemented WAE priorities are defined as either high priority or medium priority, and represent water allocation security objectives.

South Australia water access entitlements

South Australia implemented the unbundling of water rights for the River Murray from 1 July 2009.

The River Murray Water Allocation Plan (River Murray WAP) has been amended to support unbundled water rights. Water licences were unbundled into four unbundled instruments – WAEs, water allocation, water resource works approval and a water use approval.

The new WAE provides the holder with an ongoing right to a share of a specific class of water. Classes have been established to reflect the reliability and transferability of the water in the South Australian section of the River Murray. Table R2 details the new classes and the previous purpose stated on the previously bundled water licence.

 

  Table R2. Classes of River Murray WAEs 
Class Purpose
Class 1 Domestic and/or stock watering
Class 2 Country towns reticulated public water supply
Class 3a Irrigation and holding
Class 3b Irrigation Qualco–Sunlands Groundwater Control Trust Area
Class 4 Recreation
Class 5 Industrial and industrial dairy
Class 6 Metro Adelaide reticulated public water supply
Class 7 Environment
Class 8 Environmental land management
Class 9 Wetland management
source: Department for Water (2011a)

Victoria water access entitlements

Traditional water rights, and take and use licences in 'declared (regulated surface) water systems' have been unbundled into three component rights:
  • Water share: a WAE that gives access to a share of the water available to be taken from a defined water system. It is specified as a nominal volume of seasonal allocation that may be made against that share. Water shares are classified as high reliability or low reliability, according to the frequency with which full seasonal allocations are expected to be available.
  • Delivery share: the right to have water delivered by a water corporation and a share of the available flow in a delivery system, expressed as a share in terms of unit volume per unit of time of the total amount of water that can be drawn from a water system at a certain point. Linked to land.
  • Water use licences: the right to use water on a specific piece of land for irrigation. Also, water use registration, which is an authorisation to use water for purposes other than irrigation.

The retail WAEs issued under bulk entitlements (see Surface water: water management plans) are recorded in the Victorian Register; their volumes are reported in this account, but not the portion set aside for losses.

Volumes of environmental WAEs, held by the Minister for the Environment during 2009–10, are also reported in this account. Since 1 July 2011, these entitlements are held by the Victorian Environmental Water Holder.

Volumes of surface water access entitlements in the MDB

As at 30 June 2010, the total volume of surface water entitlement and basic rights in the MDB region have been evaluated to be 17,616,877 ML (see detail in Table R3). Further detail is given in the note Water rights, entitlements, allocations and trade, which highlights the data gaps and uncertainties affecting the values reported.

  Table R3. Surface water entitlements as at 30 June 2010 (basic rights and unregulated flows are estimates) 
State and MDB Plan region High security1 (ML) General and low security2 (ML) Other regulated flows3 (ML) Surface water basic right4 (ML) Unregulated flows5 (ML) Total6 (ML)
ACT            
Murrumbidgee     71,000   4,386 75,386
ACT subtotal      71,000   4,386 75,386
NSW            
Barwon–Darling 0 0 0 696 173,000 173,696
Border Rivers 1,233 263,238 1,900 10,245 150,718 427,334
Condamine Balonne 0 0 0 666 13,314 13,980
Gwydir 14,878 509,665 6,580 7,862 215,232 754,217
Lachlan 30,905 614,531 47,773 6,511 20,212 719,932
Lower Darling 7,633 78,100 11,518 3,727 250,000 350,978
Macquarie/ Castlereagh 18,213 631,716 24,383 3,439 118,742 796,493
Moonie 0 0 0 23 1,063 1,086
Murray 191,603 1,667,723 380,715 2,319 287,783 2,530,143
Murrumbidgee 377,435 1,888,070 435,493 6,578 261,374 2,968,950
Namoi 4,788 285,857 21,109 4,148 234,343 550,245
Paroo 0 0 0 816 541 1,357
Warrego 0 0 0 256 9,571 9,827
NSW subtotal 646,688 5,938,900 929,471 47,286 1,735,893 9,298,238
Queensland            
Border Rivers     109,490   399,339 508,829
Condamine Balonne     118,449   2,211,386 2,329,835
Moonie     0   77,921 77,921
Paroo     0   70 70
Warrego     2,612   122,670 125,282
Queensland subtotal     230,551   2,811,386 3,041,937
South Australia            
Murray 302,659   573,523     876,182
South Australia subtotal 302,659   573,523     876,182
Victoria            
Campaspe 42,366 24,104 52,005   8,697 127,172
Goulburn–Broken 1,090,792 645,101 44,426   84,482 1,864,801
Loddon 22,832 10,728 3,890   31,402 68,852
Murray 1,303,686 611,281 51,784   48,905 2,015,656
Ovens 26,165   7,832   40,056 74,053
Wimmera–Avoca 139,910       34,690 174,600
Victoria subtotal 2,625,751 1,291,214 159,937   248,232  4,325,134
Total 3,575,098 7,230,114 1,964,482 47,286 4,799,897 17,616,877

ACT = Australian Capital Territory; NSW = New South Wales

  1. High security includes New South Wales and South Australia high security, and Victorian high reliability. 
  2. General and low security includes New South Wales general security and Victorian low reliability. 
  3. Other regulated flows includes: ACTEW diversions from reservoirs in the Australian Capital Territory; all priority types of supplemented flow licences in Queensland; South Australian River Murray licences (exclude entitlements for urban, environment and individual holder for stock and domestic purposes); New South Wales stock and domestic, local water utility and conveyance licences on regulated rivers; and Victorian urban bulk entitlements and other licences on regulated rivers. This does not include access to supplementary flows or unsupplemented flow licences in regulated systems. 
  4. Surface water basic rights are those that enable individuals to take water for stock and domestic purposes where licences are not normally formally issued for these rights. Information was only available for some New South Wales rivers for surface water basic rights. Basic rights do exist in other States, but volumes were not available. 
  5. Unregulated flows are all flows in unregulated systems and any additional access to supplementary flows (New South Wales) or unsupplemented flows in regulated systems (Queensland).
  6. Entitlements with different reliabilities have been added to form the values in the ‘Total’ column.


Groundwater water access entitlements in the MDB

As at 30 June 2010, the total volume of groundwater entitlements and basic landowner rights in New South Wales and Victoria was estimated as 1,365,970 ML (see Table R4). Further detail is given in the note Water rights, entitlements, allocations and trade that highlights the data gaps and uncertainties affecting the values reported.

 

  Table R4. Approximate groundwater water entitlements as at 30 June 2010 for the groundwater management units selected for the National Water Account 2010 
State and MDB Plan region Basic landholder rights1 (ML) Licensed entitlements2 (ML) Supplementary3 (ML) Total (ML)
Lower Gwydir Alluvium 700 32,430 13,930 47,060
Lower Lachlan Alluvium 4,000 108,000 21,238 133,238
Upper Lachlan Alluvium
Lower Macquarie Alluvium 1,730 68,545 2,396 72,671
Lower Murray Alluvium 1,525 83,572 48,454 133,551
Lower Murrumbidgee Deep Groundwater source 1,000 270,786 41,196 312,982
Lower Murrumbidgee Shallow Groundwater source 3,000 5,210 8,210
Mid Murrumbidgee Alluvium
Lower Namoi Alluvium 3,304 86,001 20,874 110,179
Upper Namoi Alluvium 2,832 115,842 32,327 151,001
New South Wales subtotal 18,091 770,386 180,415 968,892
Campaspe Deep Lead Water Supply Protection Area 46,096 n/a 46,096
Katunga Water Supply Protection Area 59,450 n/a 59,450
Shepparton Irrigation Water Supply Protection Area 235,591 n/a 235,591
Mid Loddon Water Supply Protection Area 34,014 n/a 34,014
Balrootan (Nhill) Groundwater Management Area 1,522 n/a 1,522
Goroke Groundwater Management Area n/a
Kaniva TCSA Groundwater Management Area n/a
Murrayville Water Supply Protection Area 9,634 n/a 9,634
Nhill Groundwater Management Area n/a
Telopea Downs Water Supply Protection Area 10,682 n/a 10,682
Victoria subtotal 396,989 n/a 396,989
Total 18,091 1,167,375 180,415 1,365,881

– = no data available; n/a = not applicable

  1. Basic landholder rights are an estimate of the rights existing at the commencement of the management plans in New South Wales. Volumes from other States were not available for this table. The rights enable individuals to take water for stock and domestic purposes where licences are not normally formally issued for these rights. 
  2. Licensed entitlements include all licences issued under the respective management plans, excluding New South Wales supplementary licences. Volumes from Australian Capital Territory, Queensland or South Australia were not available for this table.
  3. Supplementary licences are a category of licence within New South Wales only, where it has already been established that the total volume being extracted from the aquifer needs to be reduced. These licences have reducing allocations to zero over the life of the management plans.

 

Water Allocations

The water sharing rules and water accounting policies in effect vary throughout the MDB.

In the case of surface water, water allocation is the predominant mechanism to share regulated flows. It involves the initial determination of available water for consumptive use at the commencement of the water year (1 July across the MDB region). Responsible water authorities assess water in storage (the volume is carried over from the prior water year), and assess the outlook for future inflows and losses under a worst-case scenario. Announcements are then made by the relevant agency ranging from 0% to 100% availability, depending upon the class of entitlement and water source. During the year, allocations may increase as water availability increases. Subsequent allocation announcements are made to adjust the volume that can be taken.

On 1 July each year, subsequent to allocation announcements and carryover rules, the water account of entitlement holders is credited with their water allocation and the carried over volume from the previous year. This volume of water may be abstracted, traded or stored (for use later in the year or where allowed under the carryover rules to be carried over to the following year). At the end of the water year, different carryover rules in each state and management plan define the amount of allocation that can be carried over and accessed in the next water year. There are usually limits or rules that apply to the volume that can be carried over in any year.

Unregulated surface water flows, however, can only be accessed once predetermined flow conditions are met, and consistent with abstraction conditions specified in the works or use licences:

  • In New South Wales, Victoria and Australian Capital Territory, there is no water allocation in unregulated systems and 100% of the water entitlement may be accessed by default, providing that all flow and abstraction conditions that may be specified by the plan or the licence are met, unless the water management plan is suspended because of insufficient water. In that case, water restrictions are imposed on the various reaches of the unregulated system.
  • In New South Wales, in either regulated or unregulated systems, supplementary flow announcements may be made based on water availability that make additional water available to supplementary licence holders.
  • In Queensland, announcements of water harvesting periods are made that allow access to unsupplemented flows, in either supplemented or unsupplemented systems.
An alternative water sharing methodology referred to as ‘continuous accounting’ is operating in the Border rivers, Namoi and Gwydir regions (in New South Wales) and in the Condamine–Balonne (in Queensland).

Continuous accounting is an alternative approach to water allocation, where users are allocated a share of system storage capacity and a share of inflows.

In continuous accounting, a WAE holder’s water account balance is updated daily and automatically for system losses, inflows, evaporation and storage capacity. Each WAE holder is assigned a share of the storage capacity.

This approach does not require water to be set aside for future losses. Instead, each WAE holder is responsible for their own evaporation losses from the storage. Inflows are credited to WAE in proportion to their share in the storage.

Under continuous accounting, water account balances do not need to be reset at the end of each water year and there is no requirement for an announced allocation (however, there are incremental allocation announcements).

Access to groundwater is either made under formal allocation announcement and/or is by default 100% of the entitlement unless restrictions apply.

Trades and Water Right Transfers

 

Water users are able to trade water entitlements and allocations in the MDB region. Trading of entitlements and allocations occurs between and within valleys, and across state borders.

Water Market Rules: Interstate Trading

Interstate surface water trade is primarily available in the southern-connected MDB region among New South Wales, Victoria and South Australia, and between New South Wales and Queensland within the Border rivers region.

Trade in the southern-connected MDB region is conducted under Schedule D of the Murray–Darling Basin Agreement, which appears as Schedule 1 to the Water Act 2007 (Cwlth).

The framework for interstate trade in the Border rivers region is provided in the New South Wales – Queensland Border Rivers Intergovernmental Agreement 2008 and managed through protocols established under the agreement. The New South Wales – Queensland Border Rivers Act 1946 provides the legislative framework.

Figure R1 indicates the areas where trading occurs between the states.

 

Figure R1. Map of interstate trading areas within the MDB region

Figure R1. Map of interstate trading areas within the MDB region



Since July 2007, the interstate allocation trade market in the southern-connected MDB region (inclusive of trade in the central and southern zone) has resulted in the net movement of water into South Australia, generally to support permanent horticultural and viticulture plantings, as well as other factors such as South Australian Government purchases to assist in drought management.

Water market Rules: Inter-valley Trading

Inter-valley trading (IVT) rules are defined in State legislation, water resource plans and the MDBA agreement. Some interstate trading rules also cover inter-valley trading. Inter-valley water trading is generally available within the southern-connected MDB region rather than in the northern MDB region.

Within valley trading, rules are also defined in State legislation and water resource plans. Surface water trading within valleys is usually available within regulated systems. Groundwater trading within an aquifer is available in limited areas, usually only where a water resource plan has been developed.

Restrictions on Trade

Generally, trade of water entitlements between and within water resource systems is restricted if there are one or more of the following factors:
  • physical constraints
  • environmental constraints
  • hydrologic connections and water supply considerations
  • low hydraulic connectivity.
The National Water Commission’s Australian Water Markets Report 2009–10 reported some restrictions at the start of 2009–10 that were subsequently eased or removed, including:
  • a 4% annual limit on the total entitlement volume able to be traded out of each Victorian irrigation district
  • a Victorian 10% limit on ownership of entitlements by non-water users
  • New South Wales embargo preventing the sale of entitlements for environmental purposes to the Australian Government
  • a temporary embargo on allocation trade from the Murrumbidgee Valley into the Murray Valley. The underlying rule limits the balance of the IVT account to 100 GL (going out of the Murrumbidgee). Trade that would increase the volume going out of the Murrumbidgee to more than 100 GL is not permitted and the embargo operates when this limit is reached
  • a ban on entitlement and allocation trade between Queensland and New South Wales on interconnected rivers other than those covered by the Border Rivers Intergovernmental Agreement.