Water sharing under the Murray-Darling Basin Agreement

Image above: the Hume Dam at the start of the River Murray.

The water sharing arrangements we have today under the Murray-Darling Basin Agreement have largely been in place for the last one hundred years. The Agreement and its rules have withstood droughts and floods. It has also been adaptable to the emergence of issues related to increasing development and water use, salinity and environmental degradation.

The fundamental principle of “equity” has underpinned the Agreement since it was first struck in 1914. Changes to the Agreement over time, for example to construct infrastructure, cap water use, allow the trade of water rights, or protect critical human water needs (CHWN) during extreme droughts, have always been by consensus, with the fundamental principle that with any changes, no State should be worse off.

How water sharing works

• The Agreement defines the agreed rules for how the available pool of water in the “River Murray system” is shared between New South Wales, Victoria and South Australia. The geographical extent of the River Murray System and its inflows is fundamental to the rules for water sharing.
• The available water comprises of inflows from the tributaries upstream of Doctors Point (near Albury) – those into Hume Dam, Dartmouth Dam and from the Kiewa River – and inflows to Menindee Lakes where this storage is under Murray-Darling Basin Authority (MDBA) control. It does not include inflows from the major State tributaries of the southern Basin.
• Inflows from State tributaries, including Murrumbidgee River and Billabong Creek in New South Wales and the Goulburn, Ovens, Campaspe and Loddon Rivers in Victoria, are assigned to the respective state of origin under all tiers of water sharing unless an explicit agreement is reached to do otherwise.
• South Australia’s Entitlement is an essential part of the Agreement, as are the water shares that are provided to New South Wales and Victoria. If South Australia does not receive 1850 gigalitres (GL) every year. South Australia’s Entitlement is reduced when conditions are dry and water availability is limited. In this regard, it should be noted that in better times, the volume of water available to New South Wales and Victoria continues to increase once South Australia’s Entitlement has been provided, while South Australia remains ‘capped’.
• CHWN is the highest priority water use and each State is responsible for putting aside its own CHWN. South Australia must put water aside for CHWN without affecting the water availability for New South Wales or Victoria. South Australia does this in accordance with the requirements of Clause 91 and Schedule G of the Agreement.
• Conveyance water is required to ’run the river’ and deliver CHWN. Hence, the first water available in the River Murray system is put towards the conveyance requirements for the current year and to a reserve for the following year. Following this, water is distributed to the States. As well as CHWN, conveyance water enables consumptive allocations to be delivered to all water users.
• The system conveyance requirements include river losses upstream of the South Australian border, South Australia’s Dilution and Loss Entitlement and evaporative losses in the major storages. It does not include conveyance water within irrigation delivery systems. Within South Australia, the Dilution and Loss Entitlement provides for losses from the border to Wellington. The dilution component ensures that water of suitable quality for human consumption can be extracted before it flows into Lake Alexandrina.
• Following the accounting for system conveyance, water is then shared between the three States. When water availability is low, South Australia does not receive its full Entitlement. Instead, for consumptive purposes, South Australia receives a one third share of the available water in the River Murray system, up to a maximum of 1154 GL. For example, as of the end of February 2020, South Australia had only 899 GL available for the 2019-20 water year.
• When quoting the volume of water available to South Australia, the figure almost always includes the 696 GL Dilution and Loss Entitlement. However, this does not provide transparency around the components of this water and their purposes, particularly when the other system conveyance volumes are usually not reported in the water availability records of other States. As such, system conveyance requirements should not be included in any comparison of water available to each State.

Storing water from our Entitlement

The conveyance and CHWN requirements were included under the Agreement (and in the Basin Plan) following the extremely low water availability conditions experienced during the Millennium Drought. It also led to new inclusions such as a Storage Right for South Australia.

Prior to 2007, South Australia had no explicit storage rights. South Australia may now store part of its Entitlement in upper River Murray storages for CHWN and private carryover in future years. However, South Australia’s stored water must not adversely affect water availability for New South Wales and Victoria. This was a non-negotiable condition to the upstream States’ agreement to the new provisions. This effectively means that South Australia’s stored water spills first.

By South Australia storing water for CHWN and private carryover, there are benefits to all States in dry years – it does not reduce allocations to upstream irrigators. This is because South Australia will have enough water to provide for CHWN and will not need an “advance” or loan of water from an upstream State for this purpose. This in turn means that irrigation allocations will increase more quickly in all States as inflows occur.

Using water from our Entitlement

A critical principle underpinning the Agreement is that each State is entitled to decide how to use its own share of the available water resource. Each State Government retains discretion to allocate the water in accordance with its own water policy and legislative framework.

For South Australia, allocations are made to water access entitlement holders in accordance with the River Murray Water Allocation Plan, which forms part of the accredited South Australian River Murray Water Resource Plan.