Price hike: Albanese pays premium for Murray Darling Basin water

The Federal Government has paid a premium to buy irrigators’ water to boost the Murray Darling Basin’s environmental flows. See the details.

Water prices have lifted across NSW on the back of federal water buyouts.

The Albanese Government has paid a 15-20 per cent premium for the first parcel of water it purchased towards boosting the Murray Darling Basin’s environmental flows by 41,100 megalitres.

The NSW Water Register shows the federal government paid Lachlan Valley irrigators MI Booth $1850/ML for 500ML of general security water, which prior to it entering the market traded for $1550/ML to $1600/ML.

The $925,000 trade was registered on February 2, just two days after irrigators and brokers accused the Government of “double standards”, in demanding market transparency from supermarkets, while refusing to detail the source, type and volume of water it purchased in the Basin.

Water brokers told The Weekly Times the 15-20 per cent premium the Commonwealth paid in the Lachlan Valley was in line with what they had seen elsewhere, with it buying below choke NSW high security water for $11,000/ML, well above the pre-tender price of $9000/ML.

The federal government’s goal is to buy 10,000ML out of the NSW Murray system, where brokers said it had paid $2100 to $2150 a megalitre for above-choke general security water, which had previously traded for $1800/ML.

The 15-20 per cent premium is also close to that paid by the former Rudd-Gillard Labor Governments from 2008 to 2011, when it bought Victorian high-reliability water shares off irrigators for $2200 to $2400 per megalitre, which had previously traded for $1800/ML to $2000/ML.

National Irrigators Council chair Jeremy Morton said the first round water tender was for a relatively small volume.

He said the real test would come when the Albanese Government entered the market to recover some of the 450,000ML it has committed to recover under the amended Water Act.

“If they’re looking to recover significant volumes, there’s no way they get it for a premium of 15-20 per cent,” Mr Morton said.

The Austender website shows that since the government’s first water tender opened in March last year, it has spent $56 million buying 34 parcels of water shares from irrigators.

The latest parcel to be purchased was an undisclosed volume, sold to GP & PM Bramley of Wingello in NSW, for $430,000.

The Weekly Times has been told the Department of Climate Change, Energy, the Environment and Water is about to upload many more trades on the Austender website.

Federal Water Minister Tanya Plibersek has previously stated the government received about 250 tender responses across the Basin, totalling more than 80,000ML, but failed to reveal what premiums irrigators were demanding.