Water management

Bill McCormick, Science, Technology, Environment and Resources

Key issue
Water security is about ensuring water quality and quantity, as well as protecting associated ecosystems.
The Murray-Darling Basin Plan aims to address climate variability and climate change but its implementation will decide whether it succeeds in delivering sufficient water for industrial and domestic use as well as the environment.

Australia, the world’s driest inhabited continent, has highly variable rainfall. The threat of drought is a constant factor in much of the country. Consequently, water security is a frequent concern, especially in regional Australia and also, at times, in our cities. But the term ‘water security’ means more than just having sufficient water. The Australian Water Association (Australia’s biggest water network promoting sustainable water management) refers to the UN definition which includes not just access to adequate supplies of clean water but also the maintenance of aquatic ecosystems:

… the capacity of a population to safeguard sustainable access to adequate quantities of acceptable quality water for sustaining livelihoods, human well-being, and socio-economic development, for ensuring protection against water-borne pollution and water-related disasters, and for preserving ecosystems in a climate of peace and political stability.

There can be considerable year to year variability in water use in Australia. A total of 15,670 gigalitres (GL) were used in 2016–17, principally for irrigation (70%) and urban use (20%).This compares to 23,500 GL in 2013–14. The recent drought will further reduce the amount of water available for agricultural use in south-eastern Australia in the coming financial year.

Water harvesting, storage and distribution have been vital for urban and regional development in Australia, as they have helped minimise the impacts of rainfall variability. Although dams and associated irrigation areas have increased water availability, they have also sometimes damaged the natural environment, causing long-term ecological decline in some rivers and wetlands. The resulting environmental degradation and poor water quality can affect local communities and industries.

Waterways and groundwater also receive various wastes and pollutants discharged from individual ‘point’ sources (such as industry and housing) and diffuse sources (such as runoff from agricultural land). By regulating and treating water discharges, so as to minimise pollutants entering the waterways, managers must ensure that the water quality of these receiving waters is maintained. The risk of pollution, and its associated impacts on water for consumptive use or on freshwater-dependent ecosystems, increases when water flow declines due to drought or excessive water diversion for agricultural or industrial use.

Urban and rural water

Most of the water supply to major urban areas is from surface water storages. Significant quantities are also supplied by groundwater, desalination plants, recycling (such as groundwater replenishment in the Perth region) and stormwater harvesting. Water use increased by 9% in major urban areas between 2016–17 and 2017–18, with the increase being met from surface water. Water scarcity may become an increasing issue for urban water supplies in the future, with inflows into storages in Perth, for example, decreasing due to climate change while, at the same time, population growth increases demand.

The 20% decrease in rainfall in south western Western Australia over the past 50 years led to the construction in Perth of two large capacity seawater desalination plants at Kwinana (2006) and Binningup (2011). These plants can supply 48% of the city’s water regardless of rainfall.

The Millennium Drought was prolonged and caused significant decline in water storages around the country. This led other mainland state capitals (Adelaide, Brisbane–Gold Coast, Melbourne and Sydney) to construct large seawater desalination plants as additional sources of water. These plants require considerable energy to operate; when the dams filled at the end of the drought, the use of the plants diminished. They were put on stand-by, turned off or supplied only small quantities of water due to the cost. Recently, however, the Sydney plant has been restarted after water storages dropped below 60% in January 2019.

The quality of drinking water is usually good in our cities, but is more variable in regional areas due to a limited ability to properly treat the water. For example, a 2010 report found that 17 of the 106 NSW non-metropolitan utilities failed to comply with Australia’s water quality standards.

Water storage and diversion

To help cope with its naturally variable rainfall and frequent droughts, Australia has the highest per capita surface water storage capacity of any country in the world. The Bureau of Meteorology calculates the capacity of the nation’s 305 water storages as 80,824 GL, and they are 46.5% full as at 20 May 2019.

The Australian Government provides funds for dams and water infrastructure projects through the $2 billion National Water Infrastructure Loan Facility (NWILF) and the $1.3 billion National Water Infrastructure Development Fund. To date, one loan has been granted under the NWILF. Two large dams have been constructed since 2010, and funding has been committed to two further large dam projects: Dungowan Dam in NSW and Rookwood Weir in Queensland.

Deputy Prime Minister Michael McCormack said that a re-elected Government would establish a National Water Grid, a statutory authority that will:

[u]se the best available science to examine how large scale water diversion projects could be established to deliver reliable and cost effective water to farmers and regional communities.

Since Federation, there have also been a number of plans to divert water from wetter to drier regions. Only one such proposal, the Snowy Mountains Scheme, has been completed. The lack of other completed schemes is perhaps related to the significant environmental and economic problems associated with these projects. One of the most famous proposed schemes is the 1938 Bradfield Scheme, which aimed to divert waters from Queensland’s Tully, Herbert and Burdekin rivers inland to the Flinders and Thomson rivers. A 1982 study found that, because of inaccuracies in the land elevations caused by the instruments used at the time, the total water from the scheme would be less than half that estimated by Bradfield and could only supply water to irrigate 72,000 ha of land west of the Great Divide.

Barnaby Joyce, former Minister for Agriculture and Water Resources, argues that the Bradfield Scheme should now be built to supply additional water to the Murray-Darling Basin (MDB) via the Warrego and Darling rivers. Mr Joyce said:

Estimates to build the Bradfield Scheme range from $15bn upward, depending on the extent of [the] distribution system, and leading infrastructure and financial experts believe it could be self-funding with no risk to taxpayers.

However, this suggestion is contentious.

Murray-Darling Basin

The MDB covers 14% of Australia, and accounts for about 40% of Australia’s agricultural production worth about $22 billion annually, one-third of which utilises irrigation. The MDB also supports 9,200 irrigated agriculture businesses. While two thirds of Australia’s irrigation water is used in the MDB, only 6% of Australia’s runoff is generated in the Basin. The demand for water in the MDB has led to significant pressures on freshwater-dependent ecosystems and significant degradation of water quality in parts of the Basin.

Management of water resources in the MDB, as elsewhere in Australia, had been the responsibility of the states. But during the Millennium Drought, the Australian government came to the conclusion that water resources in the MDB had been chronically over-allocated by the states. It asked the states to refer their powers to the Commonwealth to enable it to address this issue through new governance arrangements and a sustainable cap on surface water and groundwater use in the MDB.

The Water Act 2007 established this framework under which a Basin Plan would be prepared and implemented by a newly established Murray-Darling Basin Authority (MDBA). The Basin Plan would include long-term average sustainable diversion limits (SDL) for the annual amount of surface water and groundwater that can be taken for consumptive use.

Basin Plan

The Basin states, through the Murray-Darling Basin Ministerial Council, were part of the process that developed the 2012 Basin Plan. The Plan specifies the surface water and groundwater SDLs for the entire MDB and the water resource plan (WRP) catchments. These SDLs will come into operation from 1 July 2019 along with the mechanism for their adjustment.

Under the Basin Plan, the Basin states will manage the water resources in their jurisdictions under their water legislation. They have to revise their WRPs for their MDB catchments to be consistent with the Basin Plan by 30 June 2019. These revised plans will include SDLs that will come into force for the individual catchments. After this date, the MDBA will be able to take action to stop activities that are not permitted under the Basin Plan or the WRPs. The WRPs will have to describe how the water resources will be managed in extremely dry periods and how this management could be changed in the future due to climate change.

The Plan also includes an Environmental Watering Plan, a Water Quality and Salinity Management Plan, water resource plan requirements, matters relating to Critical Human Water needs and Water Trading Rules. The Basin Plan will not be fully implemented until 30 June 2024 with the completion of agreed constraints measures and ‘supply’ and ‘efficiency’ measures under the SDL Adjustment Mechanism. One of the Plan’s objectives is ‘to ensure that water-dependent ecosystems are resilient to climate change and other risks and threats’.

The SDLs must reflect an environmentally sustainable level of water use or take, which is defined to mean the level that would not compromise key environmental assets, key ecosystem functions, the productive base of the area or key environmental outcomes for a specific water resource. For the purpose of the SDLs for the MDB, two zones were created, the southern Basin and the northern Basin (comprising the catchments of the Darling River above the Menindee lakes).

SDLs and water buybacks

The most contentious issues relating to the Basin Plan have been the size of surface water SDLs and how water is recovered to achieve the environmental aims of the Basin Plan. South Australia wanted at least 3,200 GL per year recovered as environmental water, while NSW and Victoria wanted less than 2,750 GL/y recovered. As a compromise, the Australian government put two mechanisms in place:

  • the SDL Adjustment Mechanism to permit the raising or lowering the SDLs by up to five percent (544 GL/y) and
  • providing $1.77 billion over ten years, until 2023–24, to fund efficiency projects to generate an additional 450 GL/y of environmental water provided there would be no negative socio-economic outcomes.

The surface water SDL for the catchment of the MDB was set at 10,873 GL/y which required the recovery of 2,750 GL/y of water for the environment. This figure was increased to 10,945 GL/y in 2018 after the SDLs were increased by 70 GL/y for the northern Basin following a four year review by the MDBA (see below).

Supply measures deliver water for the environment more efficiently so less water is needed. This permits the SDLs to be increased while achieving the same environmental outcomes. Efficiency measures are water use practices that save water for the environment, such as improved irrigation methods, and add to the progress in environmental water recovery. There are also ‘constraints projects’ which are changes designed to remove physical barriers (for example crossings and bridges) or change operating rules, allowing water managers more flexibility in releasing and moving water in the system.

The MDBA determined that supply projects would enable the SDL to be increased by 605 GL/y. However this increase was dependent on 62 GL/y being recovered through efficiency projects by 30 June 2019, otherwise the increase would be lowered to the 5% of the SDL figure or 543 GL/y. The ALP questioned whether these projects will produce the claimed environmental outcomes and the Government needed to keep options open to obtain necessary amounts of water for the environment.

While the SDLs will come into effect on 1 July 2019 once the WRPs for the various catchments have been accredited, the Minister for Agriculture and Water Resources has granted timeframe extensions for some WRPs. The MDB Ministerial Council agreed that key WRP commitments will be in place by 1 July 2019. If not accredited by then, Basin states and territory governments will enter into bilateral agreements with the Commonwealth to ensure that ‘key elements of the water resource plans are given effect’.

Water buybacks

Farmers and irrigation groups are concerned about water being purchased and used to meet the SDL target for the MDB. This led to the passage in 2015 of amendments to the Water Act that limit water purchases to a total of 1,500 GL/y, well below the level required to meet the SDL. In 2017, it appeared that the SDL target could be achieved by July 2019 through ‘supply’ and ‘efficiency’ projects, without the need for additional water buybacks. The Opposition committed to removing the limit if this target was not met.

Concerns have also been raised about the August 2017 water buyback of 28.7 GL of overland flow water from Eastern Australia Agriculture in southern Queensland, for $78.9 million. The process was questioned since the purchase was made without a tender. In response, the Department of Agriculture and Water stated in April 2019:

The water purchase was consistent with Commonwealth Procurement Rules and paid at a fair market rate, as informed by independent market valuation.

The Government has asked the Auditor-General to look at all water purchases since 2008. Prior to the election, the Opposition indicated it would establish a Commission of Inquiry into this particular water purchase.

Darling River

The Darling River has less consistent inflows than the Murray River and as a result has intermittent flows which severely affect both the riverine ecosystems and the communities along the river. The flows have been low for the past six years, other than for two major floods in 2012 and 2016. At present all dams in the northern Basin are at or below 25% capacity.

In 2017 there were allegations of water theft by some irrigators along the Darling. The NSW Government commissioned an inquiry into NSW water management and compliance. It reported in November 2017 that there was a poor standard of compliance and enforcement. There were also other inquiries including the MDBA’s Basin-wide Water Compliance Review and the Australian National Audit Office Assurance review of New South Wales’ Protection and use of Environmental Water in the Basin.

In the last Parliament, the Opposition decided not to support the Greens disallowance motion for the Basin Plan Amendment SDL Adjustments Instrument and another relating to the 70 GL/y increase in the northern Basin SDL. Instead, the ALP came to agreement with the Government in May 2018 for action relating to the Basin Plan. This included: strengthening protection of environment flows, strengthening compliance with Basin water laws, improving outcomes for Indigenous people and addressing the social and economic impacts of the MDB, improving confidence in the Northern Basin Review data, and strengthening the SDL Adjustment Mechanism.

Darling fish kill

There have long been occasional blue green algal blooms and fish kills in areas of the MDB, including the lower Darling. However, three events in the Darling River near Menindee in December 2018 and January 2019 resulted in the deaths of hundreds of thousands, if not millions, of native fish, and was of a scale greater than most previous events. The impacts on the populations of Murray Cod, Silver Perch, Golden Perch and Bony Herring could last for many years.

Large numbers of fish were isolated in weir pools near Menindee, and experienced extremely hot and dry conditions during 2018 and into 2019. As a result, an algal bloom developed and the weir pool water became stratified so that the bottom waters lacked oxygen. The trigger to the fish kills was a series of cool changes that caused the deoxygenated water to come to the surface. The fish had no means of escape from the pools and died from lack of oxygen.

An Independent Panel report determined that while the fish deaths were primarily caused by these local hydrological and climatic conditions, they were also ‘shaped by a broader climatic, hydrologic and basin management context that placed the lower Darling River at risk of such fish deaths’. Floods in 2012 and 2016 filled the Menindee Lakes and, coupled with environmental flows, this enabled a large increase in the fish population. Except for these two high flow events, there have been minimal flows in the Darling River below Bourke since 2012. An increased number of extremely hot days had a major impact on water quality on remnant pools in the river.

The NSW Government had also changed water access arrangements in the Darling River, prior to the 2012 Basin Plan being approved, that permitted irrigators to take water from the river during low flow periods. The report noted that the river models used to underpin these new arrangements tended to underestimate the impacts of these extractions during dry times because they overestimated streamflows during these periods. The report stated that:

… whilst we would not assert that excessive water extractions caused the lower Darling fish deaths in 2018–19 per se, it is clear that historic patterns of extractions in the northern Basin over the last two decades (and particularly since 2012) have reduced the resilience of riverine ecosystems in the lower Darling … water access and water sharing arrangements in the Barwon–Darling should be reviewed and modified.

The Australian Government’s response to the recommendations included a commitment to secure ‘A class’ licences to protect low flows in the Barwon Darling.

Drought and the MDB

Dry conditions have persisted over much of eastern Australia in the past two years, affecting water resources in the MDB. Rainfall levels in some areas of NSW are the lowest since 1920, and have been exacerbated by record high temperatures. Cool season rainfall in the MDB over these two years is 15% below the previous lowest on record in 1940–41. Streamflows for the Barwon, Darling, Macquarie and Murrumbidgee River catchments were the lowest for April since 1980. Water storages have diminished as a result, with dams at or below 25% capacity in the Darling catchment. For example, the Keepit Dam on the Namoi River is at 0.6%, while Burrendong Dam, near Wellington NSW is currently at 6% and falling, with record low inflows. Unless conditions improve, NSW authorities will be cutting river flows in the north-west and:

… regulated flows along the Macquarie River below the town of Warren will cease from early spring to prioritise water supplies for towns and key users.

South Australian Royal Commission

The South Australian Murray-Darling Basin Royal Commission reported on 29 January 2019. Among other matters, the report found that there is no reasonable prospect of all WRPs being compliant with the Basin Plan and delivered in full, and that all WRPs are premised on the wrong SDLs.

In its initial response to the report, the MDBA rejected any assertion by the Commission that it has acted improperly or unlawfully in any way. The Greens have called for a wide-ranging federal Royal Commission into the MDB. The Centre Alliance supports the Greens proposal for a Royal Commission but has also called for a referendum to give the Australian Government constitutional power to manage Australia’s water resources.

Further reading

R Vertessy, D Barma, L Baumgartner, S Mitrovic, F Sheldon and N Bond, Independent Assessment of the 2018–19 fish deaths in the lower Darling, final report, March 2019

South Australia, Murray-Darling Basin Royal Commission Report,2019.


Back to Parliamentary Library Briefing Book

For copyright reasons some linked items are only available to members of Parliament.

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.