Water buyback tender opens

By Fiona Lloyd

Mar 27, 2023

Flow-on effects: The Federal Government has opened a voluntary tender process to begin buying 44.3 gigalitres of water to ‘bridge the gap’ under the Murray-Darling Basin Plan. Photo by Bianca Mibus

The Federal Government’s tender to buy water, including 10 gigalitres from the NSW Murray catchment, opened on March 23.

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The government is currently seeking 44.3 gigalitres of water from catchments in NSW and Queensland to meet the Murray-Darling Basin Plan’s ‘bridging the gap’ target of 2075Gl of water savings.

Offers of parcels of 10 megalitres or more of water are being sought via AusTender with the tender closing at 5pm on Friday, May 19.

A number of communities, MPs and farm groups are concerned about the broader socio-economic impacts of this latest round of water buybacks.

Federal Shadow Water Minister Perin Davey said the issue with buybacks in NSW’s Murray region was that the southern Murray-Darling Basin was a connected market where water could be traded across state borders.

“It doesn’t matter whether the water is bought out of the NSW Murray or South Australia, it will drive up the price of water, especially in times of drought when permanent plantings like almonds and grapes drive prices beyond those which many agricultural industries like dairy can afford to pay,” she said.

“We know that the water bought back to date has resulted in an increased price of temporary or allocation water by around 25 per cent across all seasonal scenarios.”

National Irrigators’ Council chief executive Isaac Jeffrey said the open tender could see water offered tied up for months.

“The tender documents say they will be evaluated between May and July, and acceptances will be made between July and August this year,” he said.

“This is in stark contrast to a line further into the documents revealing the government could choose to accept them up to May 19, 2024 ... this extended acceptance period may mean water holders are tied up for 12 months and won’t likely be able to withdraw the offer or change any details.”

He said he also was concerned that because the government was looking at the water entitlement’s long-term average annual yield, a water accounting measure which helps compare different types of water entitlements, it may actually need to buyback more water in the catchment than indicated “on paper”.

“With an interrelated system and market, buybacks will hurt everyone as they force up the price of water and that will flow on to higher costs at the checkouts for all Australians,” he said.