Water

INFRASTRUCTURE

Policy position:

Citrus Australia supports further government planning and funding into water infrastructure, to ensure water deliverability into citrus growing regions and rural communities reliant on irrigated horticulture.  Citrus Australia supports government and private co-funded investment in infrastructure projects.  It is reported that 93% of fresh produce consumed in Australia is grown in Australia; consumers across the country rely on irrigators to put food on their tables and government must underpin the system with infrastructure that can deliver water efficiently and sustainably.

Issues:

1. Governments must ensure sufficient, sustainable flow past the Barmah Choke in the Murray River whilst minimising the risk of flooding or further degradation of river banks.
2. Water storage in the regions is inadequate to drought proof for future years. Planning and building of dams to reserve more water during wetter periods will provide long term sustainability of irrigated horticulture in rural and regional Australia.
3. Holding water closer to where it is used has the potential to minimise environmental impacts of running a high river and provides surety to irrigators of water deliverability in peak use periods
4. Planning more infrastructure development to ensure adequate water allocation to agricultural production areas in inland Queensland.
5. Continuing to test and forecast the ability of underground aquifers to recharge in a timely matter in Western Australia.
6. The situation in the Murray Darling Basin where the high demand and low supply of water and symptoms of a changing climate, set a strong precedent and incentive for government to ensure close management of water availability, as well as protection of existing users and their personal infrastructure investments around aquifers and dams.

WATER MARKETS

Policy position:

Citrus Australia accepts that water markets provide opportunity for water trade between water users and further acknowledges that water market prices fluctuate based on natural events and availability of this precious resource.  Citrus Australia opposes however market manipulation including artificial shortfalls created by large parcels of water being held from the market by speculators.  Citrus Australia supports increased compliance, regulation and transparency of the water markets across the Basin.

Issues:

1. Up until 2014 Victoria had specific regulations to limit the amount of water traded on non-water use entitlements. These regulations were removed to align with the Murray Darling Basin Plan free trade policy. Such restrictions protected water users from those who sought to develop large holdings of water for the purpose of manipulating the market.
2. The water market currently has little regulation of traders and brokers. There is a need for the design of a marketplace with regulation that includes declaration of conflicts of interest, linked accounts under different names, and public acknowledgement when they own over a certain volume of water. Citrus Australia echoes calls for regulation in the water market similar to the Australian Stock Exchange.
3. Current levels of transparency in water trading are inadequate.
4. Enforcing better regulation around carryover for non-water users. Traders without an Annual Use Limit (AUL), or other appropriate delineation, should not be able to carryover between seasons, to prevent hoarding water which creates a short supply and raises prices.  Carryover should be reserved for those with agricultural businesses, for financial and risk management, as it was intended.
5. Governments should consider creating a central trading platform between the three states, with timely accurate price and volume information for ease of comparison.
6. Governments should consider implementing a broker accreditation system, where brokers must meet a ‘fit and proper persons’ test in order to receive their accreditation, and can be reported for misconduct.
7. Governments should act to ensure that during drought conditions, water traders can only trade to those with an Annual Usage Limit (AUL), or other appropriate delineation, in an effort to ensure that there is enough water for those who have a use for water (other than speculation).
8. Governments should consider tracking parcels of water on the temporary market and tagging them so that they can only be traded once per year.
9. Governments should enforce full disclosure by state and federal politicians of their (and their spouse’s) ownership of water when declaring pecuniary interests at the commencement of their term in public office.

MURRAY DARLING BASIN PLAN

Policy position:

Citrus Australia supports the continuation of the Murray Darling Basin Plan (the Plan) to completion, with consideration of the points noted below.

Issues:

1. Cancelling the Plan at this point will not stop the fact that Australia (in particular the Murray Darling catchment) is in drought.
2. The River Murray Waters Agreement 1915 (now known as the Murray-Darling Basin Agreement) initially determined water sharing between New South Wales, Victoria and South Australia as a form of drought protection. This is now managed by the Murray Darling Basin Authority.  Cancelling the Plan will not stop how much water is allocated to each state through the agreement.
3. The current concerns with unethical behaviour in the water market are separate from the Plan, as water markets were operating prior to its implementation. It is worth noting that prior to 2014, Victoria had a specific trade rule that a ten per cent limit applied to non-water user ownership of entitlements to prevent ‘water barons’ buying up excessive amounts of water.  This was removed to fall in line with the Plan, which required trade to be free of any restrictions.
4. Environmental water is owned by the Commonwealth Environmental Water Holder (CEWH) in the form of 80 entitlements. The CEWH was established as part of the Water Act 2007, to manage a suite of water projects, including the Plan.  Cancelling the Plan may mean the water would not be used the same way, but it would not mean the water would be returned to the consumptive pool unless the CEWH decided to release it back on the market.
5. It is beneficial for the 36 Sustainable Diversion Limit (SDL) adjustment projects being managed by the three states, as part of the Plan, to be completed, as some allow environmental outcomes to be achieved with less water. If not completed, the Plan states that the Federal Government can buy more water back from irrigators.  Failure of these projects could also cost the taxpayer $500M for water recovery.  It is worth noting that these projects are overdue and by some reports unachievable in the time frame (or at all).
6. It is pertinent that decisions about river operations in the Basin are made are on the basis of effects to the entire river system, and not solely made by one state. Exiting the Plan would likely result in more difficult working relationships between the states, longer decision making processes, and more lengthy negotiation periods.
7. Governance and transparency of the Basin Plan should be implemented by the Basin governments as per the Productivity Commission’s recommendation (2018), to ensure the 36 SDL adjustment projects are delivered in a timely manner. Our position echoes statements made by the National Irrigators’ Council, and the National Farmers Federation.
8. The need for more astute regulation of water metering in New South Wales.

CAPACITY AND DELIVERABILITY

Policy position:

Citrus Australia calls for a review of the Victorian, New South Wales, South Australian and Queensland governments’ capability to meet present and future agricultural water needs, given the state governments’ responsibility for issuing water licences, planning, and building permits, with consideration of the points noted below.

Issues:

1. The AITHER report commissioned by the Victorian Department of Environment Land Water and Planning (DELWP) in 2019 highlights that water from the Murray may only be able to meet 40 per cent of existing permanent horticulture in extreme dry conditions.
2. Acknowledgement of the decision by the Hon Lisa Neville, Victorian Minister for Water, to put in place an extraction licence limitation in Victoria to manage water shortfall risks, as the irrigation demand has increased to a point where it is now higher than water availability. Citrus Australia suggests that New South Wales and South Australia consider the same action until there is an agreed resolution to work towards ensuring availability for current and future needs.
3. Acknowledgement made by the Murray Darling Basin Authority (MDBA) and the Ministerial Council, that there are severe water deliverability issues along the southern Basin, and that this may impact the future growth of the industry in the tristate.
4. The Queensland Government’s limited transparency, modelling, industry consultation, and communication to constituents, in the lead up to their decision to lower the wall of Paradise Dam which reduces capacity to 42 per cent.

Citrus Australia’s recent news on Water

12 May 2021 – Goulburn to Murray trade review

23 December 2020 – Citrus Australia’s response to the interim report for the ACCC’s inquiry into MDB water markets

23 December 2020 – Is there enough water to sustain growth below the Choke?

23 December 2020 – Leading the way to transparency in permanent trade