Murray–Darling Basin
Water rights

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, inter-jurisdictional cooperation is required to manage water resources because they are shared by several jurisdictions. Inter-jurisdictional arrangements (in particular the Murray–Darling Basin Agreement [Murray–Darling Basin Commission 2007]) 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, has provided a new framework for water sharing in the MDB (Murray–Darling Basin Authority 2012h). 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 (Murray–Darling Basin Commission 2007). 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 Australian Government Water Act 2007 (Water Act). The Cap is managed based on diversion limits set at the valley level, with the designated Cap valleys defined in Schedule E to the Water Act. 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 of the Cap compliance.

The Basin Plan 2012 adopted in November 2012 aims to balance the water needs of the environment and other uses, through introducing 29 surface water sustainable diversion limit (SDL) units and 66 groundwater SDL units for the region. It is anticipated that the Cap on diversion limits set would align with the sustainable diversion limits proposed in the Basin Plan 2012 in the coming years.


Water entitlements and other statutory water rights

Water access entitlements (WAEs), when added to other statutory (non-entitled) water rights (e.g., landowner basic rights) represent the total volume of water rights that have been granted for use. A percentage of an 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 the Territory. 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 during the prescribed irrigation season. 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 and regulated systems with continuous accounting rules 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 2013 Account categorisation of entitlements differs to jurisdictional definitions. Details about the 2013 Account entitlement categorisation are available in the Water rights, entitlements, allocations and restrictions note.

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), the right to use water for a given purpose and the right to build a work.

Across the MDB, licences have been issued for hydropower generators. They are not reported upon in the 2013 Account for MDB as they are non-consumptive and not expressed in terms of volume.


Table R1  Comparison of jurisdictional WAEs and their attributes

New South Wales


South Australia


Australian Capital Territory

WAEname issued by state legislation Water Access Licence 2000 water share WAE water allocation WAE
Water Licence 1912 bulk water entitlement  n/a water licence  n/a
supplementary water access licence water licence  n/a Interim water allocations   n/a
 n/a environmental entitlements  n/a  n/a  n/a
WAEname issued by irrigation corporations from a state-conferred bulk entitlement water entitlement issued by irrigation corporations/trusts  n/a n/a (Irrigation trusts in South Australia manage irrigation rights and not WAEs)  n/a  n/a
term perpetual perpetual1  perpetual water allocation – perpetual perpetual
 n/a  n/a  n/a water licence has a term of between five and ten years  n/a
access priority high security high reliability n/a

supplemented water:

  • high priority
  • high class A
  • high class B
general security low reliability n/a

supplemented water:

  • medium priority
  • risk class A
  • risk class B
 n/a  n/a nine classes of licences have been established  n/a n/a
supplementary water  n/a n/a  n/a n/a
water allocation determination name available water determination seasonal determination water allocation announced allocation (surface water) and announced entitlement (groundwater) n/a

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. The Australian Capital Territory  Water Resource Act 2007 stipulates that a WAE is an entitlement to the amount of surface or groundwater stated in the entitlement. The amount must be stated as the lesser of the following:

  • a percentage of the total amount of the surface water or ground water available for abstracting from time to time in the water management area stated in the entitlement
  • a stated maximum volume.

A licence to abstract water, which specifies the location from which water can be abstracted, 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

  • Water access licence: under the New South Wales 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, specified proportion of the available water, or as a specified proportion of the storage capacity of a specified storage or other storage work, and a specified proportion of the inflow to that storage 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).
  • Water licence: under the New South Wales  Water Act 2012, a bundled entitlement that confers to its holder the right to abstract a specific volume of water. This licence includes the works to be constructed in those water sources (rivers, lakes, and groundwater aquifers) where water sharing plans have not commenced.
  • 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.
  • WAEs: issued by irrigation corporations to its members through their membership agreements, these 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  conferred to the irrigation corporation by the State, and are also subject to the corporation's rules.


Queensland water access entitlements

  • Water allocation: a permanent, unbundled (separated from land) and tradeable WAE that can exist in supplemented or unsupplemented systems. This is created only under a resource operations plan (ROP), either through the conversion of existing entitlements or issuing of new water allocations.
  • Interim water allocation (IWA): all surface water systems within the MDB are covered by a ROP and a water resource plan (WRP), and there is currently one interim water allocation in the region.
  • Water licence: a bundled WAE, attached to land and not tradeable without land. Under the Water Act 2000 (Qld), the term of all licences has been extended until 30 June 2111 to increase security for licensees. 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.

These 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 classes and the purpose (stated on the previously bundled water licence).


Table R2. Classes of River Murray WAEs


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 of Environment, Water and Natural Resources (2013).

The water access entitlement, allocation, and approval to abstract water are bundled into a single licence for surface water in the Marne Saunders and Eastern Mount Lofty Ranges; and groundwater in the Angas Bremer, Mallee, Peake Roby and Sherlock, Noora, Marne Saunders, and Eastern Mount Lofty Ranges. Bundled water licences within the MDB region are not subject to formal annual allocation announcements. Water allocations are deemed to be 100% of the entitlement volume stated in the water licence and are available to the licence holder at 1 July each year.


Victoria water access entitlements

Traditional water rights and take and use licences in declared (regulated surface) water systems (Department of Environment and Primary Industries 2013b) have been unbundled into three component rights:

  • Water share: a WAE that gives access to a share of the water available to be abstracted 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. Delivery share is 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 Water management plans) are recorded in the Victorian Register; their volumes are reported in this account, but the portion set aside for losses is not.

With effect from July 2011, the Victorian Environmental Water Holder replaced the Minister for the Environment as holder of environmental water entitlements. The volumes of these entitlements during the 2012–13 year are also reported in this account.


Volumes of surface water access entitlements in the MDB

As at 30 June 2013, the total volume of surface water entitlement and basic rights in the MDB region have been evaluated to be 17,467,167 ML. Details, including a breakdown of surface water right volumes on water resource plan area basis, and the data gaps and uncertainties affecting the volumes reported, are given in the Water rights, entitlements, allocations and restrictions note.


Groundwater water access entitlements in the MDB

As at 30 June 2013, the total volume of groundwater entitlements and basic landowner rights in New South Wales and Victoria was estimated at 2,497,392 ML. Details, including a breakdown of groundwater right volumes on water resource plan area basis, and the data gaps and uncertainties affecting the volumes reported, are given in the Water rights, entitlements, allocations and restrictions note.

Water allocations

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

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. In systems with annual accounting rules, 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 abstracted.

On 1 July each year, subsequent to allocation announcements and carry-over 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 carry-over rules to be carried over to the following year). At the end of the water year, different carry-over 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 (in Queensland and New South Wales), Namoi, and Gwydir water resource plan areas (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 general, a WAE holder's water account balance is updated automatically and daily for system losses, inflows, evaporation, and storage capacity under the continuous accounting approach (there are variations where there is a bulk account for storage losses, e.g. Glenlyon storage system). 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 rights transfers

Water market rules: interstate trading

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, but generally not across the region boundary.

Water market rules: interstate trading

Interstate surface water trade is primarily available in the Southern Basin of the MDB region among New South Wales, Victoria, and South Australia. In the Northern Basin, interstate surface water trade is available between New South Wales and Queensland within the Border Rivers water resource plan areas.

Trade in the Southern Basin is conducted under Schedule D of the Murray–Darling Basin Agreement, which appears as Schedule 1 to the Australian Government Water Act 2007.

The framework for interstate trade in the Border Rivers water resource plan areas is provided in the New South Wales – Queensland Border Rivers Intergovernmental Agreement 2008 (New South Wales Government and Queensland Government 2008) and managed through protocols established under the agreement. The New South Wales – Queensland Border Rivers Act 1946 provides the legislative framework.

Since July 2007, the interstate allocation trade market in the Southern Basin (inclusive of trade in the central and southern zone) has resulted in the net movement of water into South Australia, due in part to the extended drought. Some components of trade were South Australian Government purchases to assist permanent horticultural and viticultural plantings, and to underpin Adelaide and country town water supply. In addition, allocation trading mechanisms have been used to facilitate the delivery of environmental water across zones and state borders, particularly to South Australia in recent years.

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

Inter-valley trading (IVT) rules are defined in State legislation, water resource plans and the Murray–Darling Basin Agreement. Some interstate trading rules also cover inter-valley trading. Inter-valley water trading is generally available within the Southern Basin rather than in the Northern Basin.

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 surface water resource systems is restricted if there are one or more of the following factors:

  • physical constraints
  • environmental considerations
  • hydrologic connections and water supply considerations
  • low hydraulic connectivity.

The National Water Commission's Australian Water Markets Report 2012–13 (National Water Commission 2014) provides details of trading restrictions as applicable during the 2012–13 year. A summary of these restrictions primarily applying to surface water resource systems are as follows:

  • Restrictions applied on allocation trades from New South Wales to Victoria.
  • 4% restriction on inter-regional entitlement trade has been continuing in Victoria.
  • New inter-valley and interstate trade controls on allocation trades in the Goulburn, Murray, and Campaspe systems were agreed as effective from July 2014.
  • New spill rule on Lake Hume, a 100% limit on carry-over, new water storage charges, and changes to early reserves were agreed as effective from July 2014.
  • South Australia announced a new policy titled South Australia's response to upstream suspensions of River Murray water allocation trade.
  • The NSW Government imposed a 10-year, 3% per valley limit on further buybacks of NSW water licences for environmental purposes in the Murray–Darling Basin.