450GL water buyout to begin: Plibersek bypasses socio-economic test

Federal Water Minister Tanya Plibersek will wade into the water market to buy up to 450 gigalitres, bypassing socio-economic tests.

Federal water buyouts will drain irrigation communities of their wealth, inflate water prices and drive down dairy, winegrape and rice production. Picture: Alex Coppel

The Albanese Government is set to wade into Murray Darling Basin’s water markets early in the new year to start draining irrigation communities of up to 450 gigalitres for the environment.

Federal Water Minister Tanya Plibersek is due to table amendments in parliament this week that strip the Federal Water Act 2007 of barriers to buyouts, which are likely to be passed by the Senate with the Greens and two crossbenchers’ support.

The Water Act currently blocks the government from using any of the $1.775 billion set aside under the Water for the Environment Special Account to buy the 450GL of upwater, needed to deliver the basin plan “in full”, as Prime Minister Anthony Albanese promised.

The Act states that under WESA, the Commonwealth will “not conduct open tender rounds … to purchase water access rights”, with recovery of the 450GL limited to efficiency and supply projects that have no negative socio-economic impacts.

But in what irrigators have labelled a tricky move, it appears Ms Plibersek will introduce amendments that bypass the WESA, by claiming buyouts are not projects and are therefore not subject to the socio-economic test.

The Weekly Times understands Ms Plibersek’s amendments will parcel water purchases towards the 450GL into a new additional Held Environmental Water account, which will not be subject to any socio-economic test.

National Irrigators Council chair Jeremy Morton said the Albanese Government was “tearing up an 11-year agreement that the 450GL wouldn’t be bought back and always subject to a socio-economic neutrality test”.

“We know buybacks are the most destructive form of water recovery,” Mr Morton said.

Ms Plibersek recently struck a deal with NSW, South Australia and Queensland to buy the 450GL on the basis that any negative socio-economic impacts from water purchases would be offset by “providing funding for community adjustment assistance”.

But Victoria has refused to sign onto the deal, with the state’s Water Minister Harriet Shing reiterating the Andrews Government’s long-held position of opposing any water buyouts.

Ms Shing said: “We will continue to advocate for the social economic criteria and work with the Albanese Government to deliver the Basin Plan in a way that will not harm our rural and regional communities.”

One irrigator group, who had been briefed on the federal governments amendments, raised concerns that the Albanese Government would withhold structural adjustment funding to offset its buyouts in Victoria, unless the Andrews Government signed up to the interstate agreement.

However The Weekly Times understands that while the Commonwealth will hand structural adjustment funding to NSW, SA and Queensland to administer, it will manage the Victorian rollout.

Mr Morton said just where and how the money would be rolled out remained unknown.

“They haven’t said what industries and what regions they’ll target,” he said.

He said irrigation communities reliant on dairy, rice and winegrape growers were particularly vulnerable to buyouts, particularly as the Basin dried out in the face of an El Nino season.