Basin buyout: Plibersek has $613m on hand to buy 100GL in 2024-25

Federal Water Minister Tanya Plibersek intends to spend $613.4m in 2024-25 to strip 100 gigalitres out of irrigation communities.

National Irrigators Council chair Jeremy Morton says the budget plan to recover another 100GL of water out of irrigation communities in 2024-25 “just isn’t realistic”.

The Albanese Government intends to spend at least $613.4 million stripping 100 gigalitres of water entitlements out of Murray Darling Basin irrigation communities in 2024-25.

A table buried on page 143 of this week’s Budget Paper four, shows the government intends to draw down its Water for the Environment Special Account by $613.4m in the new financial year.

Just how much of that sum will go towards buying out irrigators versus investing in water saving infrastructure remains unknown.

But irrigators doubt the government will be able to reach its 100GL target in 2024-25, whatever method it uses.

National Irrigators’ Council chairman Jeremy Morton said there just wasn’t that sort of volume being traded, nor the investment in off-farm water saving infrastructure.

The NSW Water Register shows the total volume of surface water entitlement trade across the whole state in 2023-24 to date amounts to 53GL.

“It just isn’t realistic,” Mr Morton said. “Even if you were trying to flush out more volume (from sellers), you’d have to pay big money to get it.”

The only other option is for the government to try and lure some of the nation’s institutional investors in water entitlements to sell, such as Duxton Water or Argyle Capital Partners to sell.

But Mr Morton said those investors had a lot of water tied up in their own or others operations and would want a hefty premium.

During its first water tender, which was focused on recovering just 44.3GL of mainly NSW northern Basin entitlement, the Albanese Government paid an average $7692 a megalitre of long-term diversion limit equivalence water.

But in the southern basin, where reliability of supply is backed up by massive water storages, Mr Morton said the government would have to pay a premium of 20 per cent or more on water that already traded for $8000/ML.

At this stage the federal government is refusing to divulge how much it will allocate to water purchasing, over and above the $613.4m listed in the budget.

The Department of Climate Change, Energy, the Environment and Water’s 2024-25 portfolio budget statement details (on pages 76 & 77) its annual water recovery targets as:

•100GL in 2024-25

•100GL in 2025-26

•100GL in 2026-27

•150GL in the first six months of 2027-28.

Opposition water spokeswoman Perin Davey said: “This budget is about as clear as a carp-filled waterway for anyone wanting to see how much the Labor Government is going to, or is prepared to, spend on delivering their version of the Murray Darling Basin Plan.”

“The numbers that we can see are an exercise in sleight of hand where they shift existing funding around, cut funding from other areas and tell people they are making an investment,” she said.

“What is clear, is Labor have a target of recovering 100GL per year for the next four years, most likely through buyback, and they are not prepared to tell the taxpayers how much of their money they are going to spend to do so.”

Despite the budget allocating $613.4m towards recovering the 450GL, Ms Plibersek dodged a question on the issue, referring the matter to her departmental bureaucrats, who stated “the government is not disclosing the details of funding set aside for water recovery due to commercial sensitivities”.