Water rights

Operating rules and constraints

Operating rules for water right holders

Water right holders in the Sydney region operate within the provisions of the Water Act 1912 (New South Wales) except in the Kangaroo River area. The Water Sharing Plan for the Kangaroo River Water Source which is in accordance with the Water Management Act 2000 (New South Wales) provides the operating rules for the Kangaroo River. In addition to this legislation, water management licences issued to major water utilities guide them in the fulfilment of the responsibilities assigned to them (Table A1). For water right holders (major water utility, local water utility or individual holder), provisions made in legislation and water management licences define:

  • water entitlements
  • temporal, spatial and volumetric conditions of using the entitlements
  • environmental and any other obligations.
Water restriction rules

Urban water utilities introduce water restrictions in the Sydney region when there are supply limitations. Water restrictions for the area managed by Sydney Water are authorised by the Minister administering the Sydney Water Act 1994 in New South Wales. For the other areas within the Sydney region, respective urban water utilities decide and authorise water restrictions. For further information on water restrictions in the Sydney region, see the note Water restrictions under Water access information.

Water entitlements

New South Wales Office of Water (NoW) manages the entitlements in the Sydney region in accordance with the Water Act and the Water Management Act.

All licenses are registered with the Lands Title Office (LTO). Any change to the water title (water access licence) goes through LTO. NoW manages the day-to-day operation of the entitlements including the maintenance of allocation accounts.

Licences operating under the Water Act 1912 (New South Wales) are not categorised by licence type, but each licence has purposes attached to it. These purposes are given a proportion of the overall licence entitlement and provide an indication of both what the licensed water is to be used for (in a specified land) and its level of security.

Licences operating under the Water Management Act 2000 (New South Wales) are separated into licence categories that provide both:

  • a separated water entitlement that can be traded or sold independently of land
  • an indication of the security level associated with the licence.
General notes on water entitlements in the Sydney region

The legislative water resource management framework applicable for the Sydney region is being transitioned from the Water Act 1912 (New South Wales) to the Water Management Act 2000 (New South Wales). These changes are occurring on a phased basis while water sharing plans are put in place and Water Act 1912 licences (which applied to abstraction/extraction of water across the whole State) are converted to the new water access licences. Therefore NSW is currently operating under the two Acts.

The Water Management Act 2000 (New South Wales) sets the priorities for water sharing and defines them depending on water access licence/entitlement categories. The environment has first priority, followed by basic rights (domestic and stock rights, harvestable rights and Native title rights) and then all other licensed rights.

Water access entitlements

As defined on the NSW Office of Water website water access licences entitle licence holders to specified shares in the available water within a particular water management area (the share component) and to take water at specified times, rates or circumstances from specified areas or locations (the extraction component). 

The share component of the access licence is similar to the entitlement volume applied under the Water Act 1912 and is expressed as a unit share or in the case of specific purpose licences (such as a local water utility and domestic and stock) a volume in megalitres. The amount of water a licence holder is allocated as a result of an available water determination and the amount they can take in any one year is based on their share component. Other rules, such as carry-over, are also based on the share component.

An announcement regarding the water availability determination is made with regards to a water source and access licence category and applies to all access licences in the water source with that licence category. The key elements of an announcement are:

  • water source
  • licence category
  • announcement type
  • date or period that the announcement applies to.

Shares in available water may be assigned generally or to specified categories of water access licences. The specified categories of water access entitlements defined in the Water Management Act 2000 (New South Wales) are available on the NoW website.

There are three basic landholder rights applicable to the Sydney region (domestic and stock, Native title and harvestable rights). These are outlined below along with other water rights for the region.

Domestic and stock rights

Under the Water Management Act 2000 (New South Wales), an owner or occupier of land which is overlaying an aquifer or has river, estuary or lake frontage can take water without a licence under domestic and stock rights for the following purposes:

  • for domestic consumption, e.g. drinking, cooking, washing, watering household gardens and filling swimming pools associated with domestic premises on the property
  • to water stock on the property.

This water cannot be used for irrigating crops that will be sold, bartered or used for stock fodder, for washing down machinery sheds or for intensive livestock operations.

In the 2011 Account domestic and stock rights are classed as riparian rights.

Native title rights

Native Title Rights allow Aboriginal native title holders (as determined under the Native Title Act 1993 (Commonwealth) to extract water for a range of personal, domestic and non-commercial communal purposes. In the National Water Account these are referred to as Cultural rights.

Harvestable rights

Harvestable rights allow landholders in most rural areas to collect a proportion of the runoff on their property and store it in one or more farm dams up to a certain size. Since they do not involve extraction directly from the river they are generally not provided for in water sharing plans.

Groundwater basic rights
Groundwater entitlements and rights represent less than 6% of all water rights in the Sydney region. Currently there is no reliable quantification method to estimate the extractable or used volumes of groundwater. Therefore, information about groundwater assets and use is not included in this accounting report.

Hydro-electric power generation

Eraring Energy is entitled to interchange up to a maximum of 4,021 ML between Lake Yarrunga and Fitzroy Falls Reservoir and 880 ML between Bendeela Pondage and Lake Yarrunga at any time for hydro-power generation (source: Eraring Energy Water Management Licence). Eraring Energy is permitted to increase the interchanging volume between Lake Yarrunga and Fitzroy Falls Reservoir under the following circumstances:

  • during periods of unusually high power demand
  • in the event of failure of other generating stations in the State energy network or major power failure
  • at times when Fitzroy Falls Reservoir is spilling to Yarrunga Creek, subject to any environmental flow requirements in Yarrunga Creek.

Further details of Water rights applicable to the Sydney region can be found under  Water rights in the Water access notes.

Water allocations

The water year for water allocations and use in the Sydney region is from 1 July to 30 June. There is no formal process for allocation announcements in the Sydney region. An entitlement holder is able to draw their maximum entitlement volume unless, due to a limited supply of water, authorities announce on an as needs basis restrictions to those entitlements. In the latter case, the amount an entitlement holder can take in any year is calculated as a percentage of their annual share component stated on the entitlement.

For some licence categories, individual entitlement holders and authorised local water utilities can abstract twice the annual allocation in a given year if water is available. They are (i) regulated water access entitlements (urban class/arrangement) and (ii) unregulated water access entitlements (urban holders, individual holder for stock and domestic and other lumped holders). However, the holder should not abstract more than three times the annual allocation in any consecutive three years.

There is no allocation determination for basic rights per se; however, in times of limited supply, there may be restrictions on taking water for domestic and stock uses under riparian rights and groundwater basic rights.

Trades and water rights transfers

Water market rules: interstate trading

The rules for interstate trading are not yet in place for the Sydney region.

Water market rules: inter-valley and within-valley trading

Water trading rules were defined for the Kangaroo River unregulated water source in the Water Sharing Plan for the Kangaroo River Water Source in accordance with the Water Management Act 2000.

For the other areas in the Sydney region, Division 4C – Transfer of water allocations of the Water Act 1912, makes provisions for water transfers. However, the required mechanisms for such transfers do not currently exist. As a result no water trading is recorded in the Sydney region.


Restrictions on trade

As the mechanisms for the trading of water are not yet in place there is currently no trading in the Sydney region.