Ongoing water entitlements and annual water allocations
Water access entitlements and water allocations are the two main tradeable water rights in South Australia. The difference between them is outlined below:
Water access entitlement
A water access entitlement is an ongoing right to an exclusive share of water from a water resource (named a ‘consumptive pool’) as defined in the relevant water management plan (known as a ‘water allocation plan’).
In South Australia, the water entitlement share is specified on a water licence.
In the River Murray for example, each unit share may equate to a maximum of 1 kilolitre (kL = 1000 litres) and may be less depending on water availability.
In unbundled areas, a water entitlement is a property right that can be transferred independently of a water allocation.
The transfer of a water entitlement is commonly referred to as ‘permanent’ trade, although entitlement transfers can be:
- for all or part of an entitlement
- for a defined period (i.e. a temporary lease arrangement).
A temporary lease arrangement passes the benefits and responsibilities associated with holding the water entitlement from the seller to the buyer for the agreed period (30 June in the specified year). After that period, the entitlement will return to the original holder.
Water allocation
A water allocation is the right to access a volume of water for use or trade in the water year (1 July to 30 June):
- The volume of water allocated to a water access entitlement share is determined in accordance with relevant legislation and Water Allocation Plans.
- The allocated volume can change depending on the water that is made available in the relevant consumptive pool by the Minister.
- The allocated volume is first determined on the water licence and is then credited to the relevant water account.
- A water allocation is a property right that can be transferred independently of a water entitlement (in unbundled areas).
- A water allocation can also be obtained via a water allocation transfer or from unused water from the previous water use year (known as ‘carryover’ allocation)
- The transfer of water allocation is the transfer of the right to access a volume of water from the seller to the buyer.
- Once a transfer has been approved, the water allocation is credited to the water account of the buyer and is then available for use, trade or potential carryover.
- The transfer of water allocation is commonly referred to as ‘temporary’ trade.
- You can only transfer water allocation that has not been used in the current water use year.
Example of the difference between a water access entitlement and a water allocation
An entitlement holder could have a water access entitlement of 100,000 shares. If full allocation equates to 1 kilolitre per share, then at full allocation the entitlement holder has access to 100,000 kilolitres (100 ML). However, when low rainfall leads to a reduction in the volume of water available to the consumptive pool, then the Minister may need to make allocations at a reduced rate. If the reduced rate is say, 50 per cent allocation (instead of 100 per cent), the entitlement holder continues to hold 100,000 shares but the value of each share is 0.5 kilolitre, giving the entitlement holder access to 50,000 kilolitres of water (or 50 ML) in that year.
