National Water Account 2017

Murray–Darling Basin: Water rights

Water access entitlement holders and other statutory right holders can abstract water in 36 water resource plan areas in the Murray–Darling Basin region. Licences to take water for consumptive use are administered by Department of Natural Resources, Mines and Energy (Queensland), Department of Industry – Lands and Water (New South Wales), Department of Environment, Water and Natural Resources (South Australia), Department of Environment, Land, Water and Planning (Victoria) and Environment Planning and Sustainable Development Directorate (Australian Capital Territory).



Operating rules and constraints

The wide range of hydrological characteristics and water infrastructure existing within the Murray–Darling Basin 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 and State and Territory water legislations [including state water resource plans]) in effect plan and manage the Murray–Darling Basin region's water resources and impose operating rules and constraints.

The Murray–Darling Basin Cap (the Cap), was established in 1995 and has provided a framework for water sharing in the Murray–Darling Basin region. 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. The Cap does not restrain groundwater extractions.

The Cap is managed in accordance with the set of formal rules in Schedule E of the Australian Government Water Act 2007 (Water Act). It 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 (MDBA) accredits Cap models for Cap compliance and assesses compliance of the States and Territory annually. The MDBA also audits Cap models and reports Cap compliance.

The Basin Plan adopted in November 2012, aims to balance the water needs of the environment and other uses through the introduction of 29 surface water sustainable diversion limit (SDL) resource units and 81 groundwater SDL resource units for the whole region. It is anticipated that in coming years those valleys managed under the Cap framework will transition to management within an SDL framework as set in the Basin Plan.

Each State and Territory can differ in the way they manage water in the Murray Darling Basin. Further information can be obtained from the Queensland Department of Natural Resources,Mines and Energy, the NSW Department of Industry – Lands and Water, the ACT Environment and Planning Directorate, the Victorian Department of Environment, Land, Water and Planning, and the SA Department of Environment, Water and Natural Resources.


Water entitlements and other statutory water rights

Water access entitlements (WAEs) when added to other statutory (non-entitled) water rights (e.g. basic rights for stock and domestic purposes) 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, water availability under statutory rights is normally not subjected to allocation announcements.

In each State and Territory, WAEs and water allocation planning exist in a framework of State and Territory legislation and water resource 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.

In the Murray–Darling Basin region, WAEs may be issued within regulated and unregulated systems (called 'supplemented' and 'unsupplemented' systems in Queensland). 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 over a period of several years.

In some jurisdictions within the region, diversions of water are possible only during 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 2017 Account categorisation of entitlements differs to jurisdictional definitions. Details regarding the categorisation of entitlements in the 2017 Account are available in the Water rights, entitlements, allocations and restrictions note.

As part of their commitment to the National Water Initiative, States and Territory separate 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 Murray–Darling Basin region, licences have been issued for hydropower generators. They are not reported upon in the 2017 Account for the Murray–Darling Basin region as they are non-consumptive and not expressed in terms of volume.

For more information on water rights specific to each State and Territory, visit the relevant National Water Account regions: Queensland (South East Queensland region); New South Wales (Sydney region); Australian Capital Territory (Canberra region); Victoria (Melbourne region) and South Australia (Adelaide region).


Water allocations

The water sharing rules and water accounting policies in effect vary throughout the Murray–Darling Basin 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 Murray–Darling Basin 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%–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 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 Territory 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 in a manner that is consistent with abstraction conditions specified in the works or use licences:

  • In New South Wales, Victoria and the Australian Capital Territory, there is no water allocation in unregulated systems, and 100% of the water entitlement may be accessed by default provided 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 regulated and unregulated systems in New South Wales, 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 both supplemented or unsupplemented systems.

An alternative water sharing methodology that is referred to as 'continuous accounting' operates 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 water resource plan area (in Queensland).

Under the continuous accounting methodology, 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, WAE holders are individually 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.

For more information on water allocations rules specific to each State or Territory, visit the relevant National Water Account regions: Queensland (South East Queensland region); New South Wales (Sydney region); Australian Capital Territory (Canberra region); Victoria (Melbourne region) and South Australia (Adelaide region).


Trades and water rights transfers

Water market rules: interstate trading

Water users are able to trade water entitlements and allocations in the Murray–Darling Basin region. Trading of entitlements and allocations occurs between and within valleys, and across State and Territory borders but generally not across the region boundary.

Interstate surface water trade is primarily available in the southern section of the Murray–Darling Basin region in New South Wales, Victoria, and South Australia. In the northern section, interstate surface water trade is available between New South Wales and Queensland within the Border Rivers water resource plan (WRP) areas.

Trade in the southern section 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 WRP 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 section of the region 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 water supply to Adelaide and country towns. In addition, allocation trading mechanisms have been used to facilitate the delivery of environmental water across zones and State and Territory borders, particularly in South Australia in recent years.


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

Inter-valley trading rules are defined in State and Territory legislation, WRPs 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 section of the region rather than in the northern section.

Rules for trading within valleys are also defined in State legislation and WRPs. 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 WRP has been developed.


Basin Plan and other water trading rules

The Basin Plan water trading rules apply alongside existing State and Territory and irrigation infrastructure operator trading rules. Objectives of the Basin Plan water trading rules are to reduce restrictions on trade and to improve market confidence and transparency in trading.

In addition to Basin Plan, State and Territory and irrigation infrastructure operator trading rules, the Commonwealth Water Minister makes the water market rules under the Water Act. The Australian Competition and Consumer Commission applies these rules through its monitoring, enforcement, advisory and, price-setting roles.


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 Australian Water Markets Report 2016-17 provides details of trading restrictions applicable during the 2016–17 year.