Basin buyouts: Plibersek admits budget will fund “buybacks” of irrigators’ water

The amount of money the Albanese government will spend on buying irrigators’ water has been hidden to get “good value for money”.

Federal Water Minister Tanya Plibersek and Treasurer Jim Chalmers have listed budget measures to deliver Murray Darling Basin water that are “not for publication due to commercial sensitivities”.

Federal Water Minister Tanya Plibersek has finally admitted money has been set aside in this week’s federal budget to buy irrigators’ water to boost the Murray Darling Basin’s environmental flows.

Yesterday federal Water Minister Plibersek told The Weekly Times budget funds committed to delivering the MDB Plan “may include voluntary buybacks”.

But this morning she told Sky News the funds would go to buying out irrigators’ water.

“It includes buybacks, infrastructure and water efficiency projects,” Ms Plibersek told Sky News.

Last night’s budget papers included a table titled Murray Darling Basin – delivering on water commitments, which simply states “nfp” under each spending category, with an explanation that “the financial implications for this measure are not for publication (nfp) due to commercial sensitivities”.

Ms Plibersek said the budget amounts had been hidden “because if you walk into negotiations with the amount you’re prepared to pay, published, you don’t get good value for money”.

Budget paper 2 – Murray Darling Basin – delivery on water commitments – "nfp" means not for publication.

But what impact the announcement has on water markets remains uncertain.

H2OX water trading platform chief executive Lex Batters said “at this stage I haven’t had a rush of buyers or sellers pulling orders” on anticipation they could get more once the federal government enters the market.

“Perhaps the pendulum has swung slightly, but it all depends on whether the states let it happen,” Mr Batters said.

NSW and Victorian governments have repeatedly stated they would not tolerate buyouts, strategic or otherwise, given the economic impacts on irrigation communities.

NSW Water Minister Kevin Anderson has rejected any buyouts, while his Victorian counterpart Harriet Shing strongly opposes buybacks towards the 450 gigalitres or any other target.

Irrigated dairy farming faces a bleak future if the Federal Government buys more water out of the Basin, as competition for a swindling pool pushes farmers off the land. Picture: Alex Coppel

National Irrigators Council chairman Jeremy Morton said everyone was talking about a showdown between the federal government and irrigators, “but it’s a showdown with the states”.

“There’s no substitute for water, so any water you recover (for the environment) is a straight reduction in the amount of food and fibre we can produce,” he said.

The budget also appears to show the government is preparing to defer the June 2024 deadline on delivering the Basin Plan’s baseline target of 2680GL and the delivery of 450GL of “upwater” for South Australia.

To date federal Water Minister Tanya Plibersek has refused to comment on warnings seven key water savings and constraints projects would not be delivered by the 2024 deadline and that an extension was needed.

But last night’s budget shows funding for these and other key water recovery programs has already been rolled over into 2024-25.

Budget Paper Two states “the government will also extend the end date for the Sustainable Rural Water Use and Infrastructure Program to 30 June 2025 and re-profile $153.8 million of unallocated funding from 2023-24 to 2024-25”.

Irrigation communities have already lost 1990GL of their water to the environment, so that more wetlands can be flooded.

But just how much the government is prepared to spend on irrigation water buyouts for the environment and how it will bypass legislative hurdles remains unclear.

Both an extension of the June 30, 2024 deadline and buying more water off irrigators would require amendments to the Federal Act 2007.

Senator Davey said the government seemed to be setting itself up for an extension of the deadline and the Coalition would be open to discussions on the issue.

Labor also appears to be kicking the can down the road on its Water for Australia plan, in which it promised to “future-proof Australia’s water resources by establishing a National Water Commission and broadening the National Water Grid Investment Framework”.

Yet the budget has put re-establishing the NWC on the backburner, allocating just $500,000 “for initial scoping work to establish a National Water Commission”.

Ministers agreed they will meet again in February next year to agree actions to deliver the remaining shared Basin Plan commitments.