WATER ALLOCATIONS

In reply to the Hon. SANDRA KANCK (11 September 2007).

The Hon. G.E. GAGO (Minister for Environment and Conservation, Minister for Mental Health and Substance Abuse, Minister Assisting the Minister for Health): The Minister for the River Murray has provided the following information:

1. This Government is fully aware of the establishment of new plantings of almonds, apples and other crops in the Riverland and Victoria. These plantings are being established using existing ongoing licensed water entitlements and annual water allocations transferred from existing licence holders in South Australia, New South Wales or Victoria. These developments do not involve the allocation of new water.

This Government actively supports the trade of water licences and water allocations within this State and across the southern Murray-Darling Basin. This position is consistent with the Council of Australian Government (COAG) 1994 water reform framework and the 2004 National Water Initiative, which all jurisdictions in Australia have agreed to implement.

Providing effective and efficient water markets and opportunities for trading, within and between States and Territories, ensures that water is moved to its highest and best value use.

2. In South Australia, River Murray water can only be allocated or transferred in accordance with the Natural Resources Management Act 2004 and the adopted Water Allocation Plan for the River Murray Prescribed Watercourse. Under the Water Allocation Plan, no new water can be allocated for irrigation purposes. However, water can be transferred from existing licence holders within South Australia or from New South Wales or Victoria for use on new plantings, subject to salinity accountability, water use efficiency and environmental requirements being met. The use of ongoing water entitlements for new developments in South Australia is subject to the Notice of Restriction on the taking of water from the River Murray, which will increase to 32 per cent of entitlement from 14 December 2007

The restriction on the taking of water from the River Murray also applies to SA Water. To achieve the required water savings, SA Water has had to impose water restrictions on its customers (households). SA Water is also working with industries to facilitate the preparation of individual water efficiency plans to achieve a total net decrease in water consumption.

COAG has not temporarily forced South Australians to water their gardens using buckets. During this unprecedented drought, tough decisions have had to be made by this Government to ensure that South Australia continues to receive sufficient water from the River Murray to meet critical human and irrigation needs.

The 2007-2008 water sharing arrangements in the Murray-Darling Basin negotiated by Senior Officials from each State are based on, among other requirements, all basin States implementing specific conservation measures, including tougher restrictions on outside watering. The decision to provide water for critical human needs, on this restricted basis, was a collective decision of all basin States and was endorsed by the Prime Minister. Failure to meet the restriction on outside watering requirements could jeopardise South Australia's strong position in the current and future water negotiations.

The level of restriction imposed on outside watering in South Australia is kept under constant review and may be adjusted based on water use and availability, as occurred with the relaxation on the use of buckets from 1 October 2007.

I reiterate that any new or additional irrigation development using River Murray water has been undertaken within the constraints of the highly restricted water available for consumptive use in the Murray-Darling system, which has only been provided to irrigators after water was provided for critical human needs.

3. South Australia does not oppose the establishment of new plantings using water that has been purchased or leased on the water market, as has occurred in Victoria and in the Riverland in South Australia.

This Government like those of New South Wales, Queensland and Victoria strongly opposes the allocation of any new water and continues to actively support the Federal Government's plans to address the over-allocation of water resources, particularly in the Eastern States.

4. The allocation of water from the River Murray in South Australia has been capped since the late 1960s. Water for new plantings can only be obtained by purchasing existing licensed water entitlements or annual allocations on the transfer market within South Australia or from New South Wales or Victoria.

The local and interstate markets have resulted in significant additional volumes of water being available to irrigators within South Australia on a permanent or temporary basis, for use on new and existing developments.

The interstate market in particular has been instrumental in making additional water available to irrigators during the recent prolonged drought, with approximately 35 gigalitres being transferred into South Australia from July to early November 2007, primarily for use on permanent plantings located predominantly in the Riverland. A further 20 gigalitres is flagged for transfer into South Australia. This water has moved from lower value or annual crops in NSW and Victoria and is a continuation of the market trend, which developed during 2006-2007.

A further 24 gigalitres of water has been transferred between licence holders within South Australia, with the majority of this water being transferred from annual croppers and dairy farmers along the lower reaches of the River Murray to permanent plantings above Murray Bridge. It is anticipated that this movement of water away from annual croppers and dairy farmers will continue as access to water and water quality issues become more problematic.

No applications for water transfer for use on new plantings within South Australia have been refused, because all applications received to date have satisfied the requirements of the Natural Resources Management Act 2004 and the Water Allocation Plan for the River Murray Prescribed Watercourse.

5. The Government regularly consults with growers on a variety of River Murray issues, including the transfer of water allocations for new and existing developments. Given that no new allocations of water have been granted, there has not been a need for any specific consultation on this issue.