Labor announces $300m Basin support package

The Albanese Government has committed $300m in support for Murray Darling Basin communities to offset water recovery impacts, but whether the amount is adequate or not remains a concern.

Minister for the Environment and Water Tanya Plibersek during Question Time at Parliament House in Canberra. Picture: Martin Ollman

The Albanese Government has committed $300m to offsetting the impact of stripping another 450 gigalitres out of the Murray Darling Basin communities, while predicting irrigators will only have to pay 9.5 per cent more for allocation water if it buys half the amount.

Ms Plibersek said: “We understand there may be social and economic impacts of recovering water.

“That’s why we’re providing a record $300 million support package for Basin communities before water recovery impacts are felt, supporting jobs and economies. It will ensure regional communities are as strong as possible as the Basin Plan is rolled out in full.”

National Irrigators Council chair Jeremy Morton said the $300m was “chicken feed” and woefully inadequate considering the size of the basin and the impact of stripping another 450GL out of communities that had already delivered 2107GL to boost environmental flows under the Basin Plan.

“What we’ve observed (in the past) is lots of the funds will be chewed up in ticking all the boxes, on compliance, not on the ground,” Mr Morton said.

In announcing the $300m community support package, Ms Plibersek also released an ABARES report, as part of an addendum to the Basin Plan regulatory impact statement that found the Albanese Government wading into the market to buy 125GL, 225GL or 325GL of irrigators’ water entitlements, would result in seasonal allocation prices rising by 5 per cent, 9.5 per cent and 15 per cent respectively.

But the ABARES modelling was limited to the average price of allocation water from 2015-16 to 2020-21, did not consider downstream impacts resulting from reduced agricultural production and did not model the effect on the Northern Basin.

Mr Morton dismissed the analysis, given it was based on average prices and that “the less water the harder it swings”, such as in the spring of 2019 when below choke allocation water prices peaked at $940 a megalitre on the back of a dry winter, then dropped to $200/ML 12 months later as heavy rainfall swept through the Basin.

ABARES modelling also tried to estimate then impact of federal water recovery on the amount of water use by various irrigation sectors.

“In percentage terms, water use is estimated to decrease the most for rice (8 per cent) and pastures (6 per cent), and least for almonds (0.2 per cent) and other horticulture (1 per cent),” ABARES reported.

“From a regional perspective, the largest estimated reduction in average water use occurs in Northern Victoria, 6 per cent”.