Climate change, energy and the environment Water

Budget Review 2009-10 Index

Budget 2009 10: Climate change, energy and the environment


Bill McCormick and Louise Emmett

Five of the six 2009–10 budget measures related to water were the result of agreements negotiated to facilitate the passage of the Nation Building and Jobs Plan in February 2009—with the Greens the bioremediation and revegetation trials, and with Senator Xenophon the accelerated water buy–backs for the Murray–Darling Basin, national stormwater funding, local plans for a future with less water and the small block irrigators exit grant package expansion.

Driving reform in the Murray–Darling Basin

The funds from the Driving Reform in the Murray–Darling Basin component of the Water for the Future package have been reallocated. This budget measure transfers $185.3 million over eight years from the $12.9 billion Water for the Future package in the Department of the Environment, Water, Heritage and the Arts (DEWHA) to the Murray–Darling Basin Authority, along with $7.5 million to the National Water Commission and $3.4 million to the Australian Competition and Consumer Commission, both over two years.[1]

This measure will enable these agencies to undertake new responsibilities arising from amendments to the Water Act 2007 and the signing of the Intergovernmental Agreement on Murray–Darling Basin Reform on 3 July 2008.[2]

The reallocation will involve a net decrease in funding to the Water for the Future package over 2009–10 and 2010–11, providing savings of $16.4 million.

Bioremediation and revegetation trials

The Greens negotiations resulted in $10 million in funding in 2008–09 through 2010–11 for bioremediation and revegetation trials around Lake Alexandrina and Lake Albert. This is intended to result in ecosystem stability and resilience; as well as stabilise sand, soil and dust movement.[3]

Accelerated water buy–backs for the Murray–Darling Basin

The negotiations with Senator Xenophon resulted in the acceleration of the Government’s program of buying back of water entitlements for return as environment flows within the Murray–Darling Basin. A total of $500 million that was to be spent in 2013–14 through 2015–16 will be brought forward four years to 2009–10 through 2011–12, including $250 million in 2009–10.[4] Shadow Parliamentary Secretary for Water Resources Mark Coulton was critical of this proposal.

It is staggering that while Senator Wong continues to sit on almost $6 billion that was allocated for water infrastructure by the Coalition Government she has chosen to forge ahead with the misguided approach of buying up water entitlements.

The Government has allocated an additional $250 million to buy back water entitlements over the next three years, but it has failed to mention the targets it has in terms of how much water they expect to purchase.

There is also a complete omission of exactly where the Government will purchase this water.[5]

National stormwater funding

Stormwater harvesting was to be funded under the $1 billion National Urban Water and Desalination Plan outlined in the 2008–09 Budget.[6] However, after negotiations with Senator Xenophon the Government agreed to fund stormwater harvesting as a new component under the Plan with at least $200 million of the $1 billion to fund projects over the next four years that use urban stormwater to reduce demand on potable water supplies.[7] The guidelines under the Plan were expanded to make it easier for smaller project proponents to apply.[8] Government funding can be up to 50 per cent of project costs, to a maximum of $20 million. In order to increase opportunities for smaller towns and cities to participate, the minimum cost of an eligible project has been reduced from $30 million to $4 million.[9]

Local plans for a future with less water

Under a new initiative agreed with Senator Xenophon, local municipalities in the Murray–Darling Basin can apply for grants for use in planning for future water constraints and to invest in associated local water savings initiatives. There is no additional cost for this three–year $200 million measure, which will be funded from within the existing resources of the $5.8 billion Sustainable Rural Water Use and Infrastructure program.[10] No information is available about the guidelines or other parameters of these grants on the DEWHA website.

Small block irrigators—exit grant package—expansion

Eligibility for exit grants of up to $150 000 available under the $57.1 million Murray–Darling Basin Small Block Irrigators Exit Grant Package was originally limited to farms less than 15 hectares (ha) and was to end on 30 June 2009. From 13 February 2009, this eligibility criterion was amended to allow farms of up to 40 ha to apply.[11] These exit grants are to allow small block irrigators with permanent water entitlements of at least 10 megalitres who wish to cease irrigation farming to sell their water entitlements to the Australian Government.[12] Senator Xenophon negotiated the increase in eligible block size as well as an increase in the taxable grants available for the removal of irrigation plantings and infrastructure from ‘up to $10 000’ to ‘up to $20 000’. As a result of these changes funding of the scheme has increased by $45.4 million and the funding extends through 2009–10. Budget Paper No. 2 indicates that the total program funding is $107 million.[13] Within this total, funding of $4.0 million was provided after the 2008–09 Budget to Centrelink to deliver the program as well as $0.5 million to the Department of Agriculture, Fisheries and Forestry.[14] As with the Local plans budget measure above, this additional funding will also be met from the $5.8 billion Sustainable Rural Water Use program.[15]

The Federal Member for Mallee, John Forrest, and the State Member for Mildura, Peter Crisp, had concerns that the complexities of the package could see growers, who wanted to leave horticulture, being unable to qualify:

Mr Forrest said selling water out of an irrigation district attracted significant fees which could devalue the package substantially, and there was no co­–ordination between selling the water and receiving the $150,000 grant.

“An applicant might sell the water, remove the farm infrastructure and then be advised they don’t qualify for the grant,” Mr Forrest said. In addition, all permanent plantings must be removed before the grant can be paid.”

…During the five years after grant payment, applicants named in the grant are disqualified from inheriting any tradeable water entitlement. In addition, the loss of tradeable water in the system would impact on remaining farmers who needed to buy temporary water to get a crop in times of low allocation.[16]

Adelaide desalination plant expansion

The Government’s commitment for $228 million from the National Urban Water and Desalination Plan to fund a potential expansion of the Adelaide Desalination Plant at Port Stanvac from 50 gigalitres (GL) to 100 GL per year is not a new budget measure.[17] The promised funding is in addition to the $100 million already committed for the 50 GL plant. South Australian Premier, Mike Rann has welcomed the additional commitment stating that South Australia will match the Federal Government’s allocation to double the capacity to 100 GL per year and commented that this will mean an end to water restrictions.[18] Senator Sarah Hanson–Young was critical of this:

The news of the extra $228 million in Budget funds for Adelaide’s desalination plant was promptly received by the South Australian Premier as a sign that Adelaide’s water supply would be guaranteed ‘for decades to come’, as he irresponsibly stated, signalling ‘the end of household water restrictions’.

Even the subsequent qualification that Premier Rann meant ‘punitive’ water restrictions does not unmuddle the mixed messages coming out of the State and Federal Governments about the need for all to be water–wise for a sustainable future.

The Federal Government must make it clear to the South Australian Government that its Budget funds were not provided so that Adelaide could splash around its new, expensive, energy–intensive, effluent–producing water supply, especially given the growing challenges presented by climate change.[19]

[1].    Australian Government, Budget measures, budget paper no. 2: 2009–2010, Commonwealth of Australia, Canberra, 2009, p. 208, viewed 20 May 2009,

[2].    Budget measures: budget paper no. 2: 2009–2010, p. 208.

[3].    Australian Government, Portfolio budget statements 2009–10: budget related paper no.1.6: Environment, Water, Heritage and the Arts Portfolio, Commonwealth of Australia, Canberra, 2009, p. 20, viewed 20 May 2009,

[4].    Budget measures: budget paper no. 2: 2009–2010, p. 412.

[5].    M Coulton, Failed water buy–backs again favoured in Budget, media release, 13 May 2009, viewed 21 May 2009,

[6].    L Emmett, L Nielson and A Talberg, Budget 2008–09: environmental and scientific issues, Parliamentary Library, Canberra, 2008, viewed 21 May 2009,

[7].    Budget measures: budget paper no. 2: 2009–2010, p. 208.

[8].    M Abraham and D Bevan, ‘Interview with Penny Wong’, ABC Radio 891, transcript, Australian Broadcasting Corporation (ABC), 24 March 2009, viewed 21 May 2009,;query=Id%3A%22media%2Fpressrel%2FIQLT6%22

[9].    Budget measures: budget paper no. 2: 2009–2010, p. 208.

[10]. Budget measures: budget paper no. 2: 2009–2010, p. 207.

[11]. Department of the Environment, Water, Heritage and the Arts, ‘Murray–Darling Basin small block irrigators exit package’, viewed 21 May 2009,

[12]. P Wong, Small block irrigators exit grant package expanded, media release, 24 April 2009, viewed 21 May 2009,

[13]. Budget measures: budget paper no. 2: 2009–2010, p. 87.

[14]. Australian Government, Mid–year economic and fiscal outlook 2008–09, Commonwealth of Australia, Canberra, 2008, p 145, viewed 22 May 2009,

[15]. Budget measures: budget paper no. 2: 2009–2010, p. 87.

[16]. J Forrest, Small irrigator exit package must be modified, media release, 16 February 2009, viewed 21 May 2009,

[17]. P Wong (Minister for Climate Change and Water), Additional $228 million to help secure Adelaide’s water supply, media release, 12 May 2009, viewed 21 May 2009,

[18]. S Morris, ‘Funds boost desalination fix for parched capital’, Australian financial review,13 May 2009, viewed 18 May 2009,; G Kelton, C Russell and T Zed, ‘Water bans to end’, Advertiser, 14 May 2009, viewed 18 May 2009,; H Gout, ‘Money flowing like desalinated water’, Independent weekly, 15 May 2009, viewed 18 May 2009,

[19]. S Hanson–Young, Mixed messages on water from Govts muddle SA’s water future, media release, 19 May 2009,

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