Basin buyout: Urban water corps hold 133GL in excess entitlements

Victoria’s urban water bodies are sitting on 133GL of excess water entitlements, which could be bought or leased to the federal government.

Federal Water Minister Tanya Plibersek (left) and Senator David Van struck a deal to encourage more leasing, rather than federal buyouts of water off irrigators for the environment.

Victoria’s urban water corporations are sitting on 133 gigalitres of excess Goulburn and Murray water entitlements, as the Commonwealth forges ahead with plans to strip irrigation communities of their wealth.

Excess water holdings include 75GL owned by Melbourne’s South East, Greater Western and Yarra Valley Water.

Regional urban water corporations hold another 58GL, with Coliban Water holding 22.8GL, Goulburn Valley Water 15GL, while North East and Lower Murray Water have an excess of 10GL each.

Goulburn Valley Water’s latest annual report shows it holds bulk entitlements totalling 46.88GL, of which it used just 26.8GL in 2022-23.

Selling excess urban water could generate from $700 million to more than $1 billion, given the transaction savings for the Commonwealth from dealing with just a few water corporations.

The alternative is to let the federal government to come knocking at hundreds of irrigators’ doors, a proposition the Victorian government its Water minister Harriet Shing has long opposed.

But to date Ms Shing and her bureaucrats have failed to detail how they could stop the Federal Government simply wading into Victorian water markets to buy what they want to boost environmental flows under the Murray Darling Basin Plan.

Victorian Farmers Federation water council chair Andrew Leahy said “you have to look at everything”, when it comes to the federal government’s push to buy water.

He said it would be far better if the Federal Government leased water off Victoria’s urban water corporations, with an allocation trigger below which water went back to meet urban needs.

“If it doesn’t rain then people come before the environment,” Mr Leahy said. “(But) I don’t know if you’d get them (the Commonwealth) to do it.”

Victorian Farmers Federation Water Council chair Andrew Leahy says “you have to look at everything”, when it comes to the federal government’s push to buy water”.

He also warned leasing or selling urban entitlements to the Commonwealth would still have an impact of regional Victoria, given Melbourne’s and regional towns’ water corporations currently sell seasonal allocations against their entitlements to irrigators.

During negotiations to amendment the federal Water Act last month to allow more water buyouts, Federal Water Minister Tanya Plibersek struck a deal with Victorian Senator David Van to pursue more leasing deals.

The deal calls on the government to use leases more frequently and make it clear to potential water sellers that:

LEASING is an instrument open to them and explain how leasing will work, for example, that lease terms can range from 1 year, to 5 years or 30 years; and

LEASING is a mechanism that is open and easy for water access entitlement holders to use.