Water prices surge: How much higher will they go if Labor wins?

Water entitlement prices will surge if the ALP is victorious on Saturday, after a new MDB promise from Anthony Albanese’s camp.

Labor’s thirst: Labor Leader Anthony Albanese and his team are set to push Murray River water entitlement prices up to $11,000 a megalitre, if elected.

Water entitlement prices are set to surge if Labor is elected to govern on Saturday, after the party promised to deliver 450 gigalitres of “upwater” towards the Murray Darling Basin’s environmental flows.

Irrigators fear Labor Leader Anthony Albanese and his team will simply raid the water market to recover the 450GL, in a bid to meet the June 2024 deadline on its delivery, pushing up prices and draining Basin communities of their wealth and jobs.

The Victorian Water Register shows that in December water was trading in the basin’s biggest market – the Lower Murray – at $6100 a megalitre, reaching an average of $7000/ML in April, before bumping up $7400/ML this month.

Big sip: Irrigators fear that the ALP will raid the water market. Picture: Toby Zerna

Both NSW and Victorian water brokers say it’s difficult to work out what’s driving the current price rises, but all agreed a Labor win would put far greater upward pressure on markets.

“It (the 450GL recovery) sends a message to entitlement holders that the value of water will increase,” H2OX water exchange business development manager Craig Feuerherdt said.

Some irrigators and brokers are already factoring in high reliability entitlement hitting $11,000/ML.

To date 2106GL of water has been recovered for the environment under the plan, of which 1228GL was stripped from communities using buyouts.

Labor has refused to detail how it will recover the extra 450GL, with a spokesman stating “we’re not ruling out (using) any tools to uphold the Murray Darling Basin Plan”.

Victorian Farmers Federation water council chairman Andrew Leahy said Labor needed to answer the question – “Which irrigation districts and towns does it want to shut down” as it goes about draining another 450GL out of irrigation communities?

“Where I live in the Torrumbarry there’s about 200GL of high reliability water, so do they want to shut down Cohuna, Kerang and Swan Hill?”

The Murray Darling Basin Authorities own progress report shows 520GL of the 802GL it has recovered from Victoria to date, mainly came from the buyouts of former Labor Federal Governments dating back to 2008.

VFF analysis of MDBA community profiles shows that from 2001 to 2016 a total of 5116 jobs were lost across Victorian irrigation communities.

But just how many more jobs would be lost from draining another 450GL out of irrigation communities is unknown.

Irrigators fear Labor will once again target Lower Murray high reliability water, given inter-valley restrictions on getting water out of the Goulburn, Murrumbidgee and Upper Murray, plus the low reliability of Darling River flows.

National Irrigators Council chairman Jeremy Morton said he hoped Labor would take a pragmatic approach to water recovery, without damaging productivity.

But Mr Mortimer admitted trying to recover 450GL by June 2024 would be “extremely difficult.”