Murray Darling Basin water-trade loophole to be closed

A loophole in Victoria’s water rules allowing irrigators to bypass restrictions on trading from the Goulburn to Murray valleys will be closed by December.

Erosive flow: Irrigators will no longer be able to bypass restrictions on water trade out of the Goulburn (above) to Murray Valleys. Picture: Andy Rogers

WATER Minister Lisa Neville will close a regulatory loophole allowing irrigators to squeeze a $100-a-megalitre profit out of bypassing restrictions on trading water from the Goulburn to Murray valleys.

An inter-valley trade limit of 200,000 megalitres in net trade out of the Goulburn to the Murray has been in place since the beginning of the 2019-20 irrigation season, leading to a widening gap in pricing between the two valleys.

But irrigators have been bypassing the IVT limit by lodging applications with Goulburn Murray Water to establish Goulburn Allocation Accounts that are tagged (linked) to their Murray Water Use Licences.

The motivation was clear, given Murray irrigators can sell their allocation at $630/ML locally and then replace it with Goulburn water brought in on their tagged account for $530/ML.

The only restriction is that the Murray irrigator uses the Goulburn water on their property.

Irrigation industry insiders say last season almost 50,000ML was moved from Goulburn Valley ABAs to tagged Murray licences.

The Weekly Times sought answers from Goulburn Murray Water last Friday on why it allowed irrigators to make the transfers outside the IVT, given Murray Darling Basin Plan (Chapter 12.23) rules demand tagged and untagged trades be subject to the same restrictions.

But today Minister Neville stepped in, releasing the government’s response into a review of the Goulburn IVT.

Ms Neville’s media release stated that from December all trades from the Goulburn system, including water use from tagged accounts, would be treated consistently and abide by the Basin rules.

She pointed out that tagged water moving from the Goulburn to the Murray outside the 200,000ML Goulburn IVT limit, had risen from less than 10GL in 2012-13 to 120GL in 2017-18.

In fact total flows had jumped from just 60,000ML in 2013-14 to 320,000ML in 2017-18 and 433,000ML in 2018-19.

Ms Neville instigated the review in May, due to concerns at the impact — both on the community and environment — of ever growing volumes of water flowing out of the Goulburn into the Murray, especially during summer.

Her office stated ongoing monitoring and advice from a scientific expert panel had confirmed prolonged high unseasonal flows were causing damage to the river banks, loss of vegetation and a reduction in habitat for native fish.

Murray Darling Basin Authority live river data shows Goulburn River flows at McCoys Bridge surged from about 1000ML/day in early December to 3000ML/day in early January, remaining at that level until late February.

The minister also announced two other measures to reduce the risk the environmental damage to the lower Goulburn and to get the market settings right for Goulburn to Murray trade, which were:

AN INTERIM operational regimen that achieves variable summer flows in the Goulburn well below recent volumes, to be implemented before the high-risk period begins this summer; and

THE start of public consultation in January next year about long-term options to change the current Goulburn to Murray trade rule to maximise trade opportunities within environmental thresholds.

“We want a sensible approach to managing this issue that gets water to users who need it, but not at the expense of the lower Goulburn River environment,” Ms Neville said.

“Announcing these changes before the season starts enables people to make early decisions on when they move water — striking the right balance with community consultation and protecting the health of the Goulburn River before this summer.”

But irrigators are worried further restrictions will simply widen the price gap, given it would further limit Goulburn dairy irrigators’ ability to offload water into the Murray system, where demand for permanent plantings is on the rise.

“She’s (Ms Neville) been influenced by dairy stakeholders in the Goulburn system who want to diminish allocation prices,” one Murray irrigator said.

“It’s all about access to cheaper water. But is being dressed up as environmental concern.”

One water broker, who did not wish to be named, said further tightening of the IVT was effectively a dairy-farmer subsidy and had little to do with the environment.

Opposition water spokeswoman Steph Ryan said irrigators were “sick of people profiting from water trade because the Andrews Labor Government has been too slow to close loopholes.

“This further reinforces the need for a central trading platform to provide transparency across the southern Basin,” Ms Ryan said.