National frameworks

Traditionally, water management in Australia has been the responsibility of the states and territories. However, in the early 20th century, it was recognised that the Australian Government had a role to play in the management of the Murray–Darling Basin because it crossed 5 jurisdictions and was a critical area for agriculture. In 1914, New South Wales, Victoria and South Australia signed the River Murray Water Agreement. The River Murray Commission was established 3 years later to ensure that the agreed water shares were delivered – a role it continued until 2008. The first version of the Murray–Darling Basin Agreement was signed by the Australian Government and Basin state governments in 1987.

At a national level, the period from the early 1900s to the late 1970s saw a focus on the development of water resources. However, by the 1980s, it was recognised that the existing water management systems were inefficient, expensive and causing significant environmental damage (Doolan 2016). In 1994, a broad, nationally agreed set of policy commitments was endorsed by the Council of Australian Governments (COAG) as the Water Reform Framework. The framework addressed overall water pricing and cost recovery, clarification of water entitlements, arrangements to facilitate water trade, and allocation of water to the environment.

COAG refreshed its commitment to water reform in 2004 by agreeing to the National Water Initiative (NWI). Since the introduction of the NWI, the Australian Government has taken a leadership role to drive national water reform.

National Water Initiative

The NWI is the national blueprint for water reform (DAWE 2019). The NWI is a shared commitment by governments to increase the efficiency of Australia’s water use. It is designed to provide greater certainty for investment for rural communities and for the environment (DAWE 2019). The NWI built upon the 1994 COAG Water Reform Framework.

Under the NWI, governments commit to:

• prepare comprehensive water plans
• achieve sustainable water use in overallocated or stressed water systems
• introduce registers of water rights and standards for water accounting
• expand trade in water rights
• improve pricing for water storage and delivery
• better manage urban water demands.

Assessments of progress in implementing the NWI are required to occur every 3 years; the latest assessment by the Productivity Commission was undertaken in 2020.

The findings, which were released in September 2021, found that jurisdictions have made good progress against the current NWI, with 62% of commitments (33 out of 53 sub-elements) being assessed as largely or fully achieved. It is considered that the NWI has served Australia well: most actions under the NWI have been implemented, and reform has brought sizeable benefits to regional communities and irrigators, the environment, the water sector and customers (Productivity Commission 2021).

However, the recent drought has exposed weaknesses in achieving agreed environmental outcomes in some systems, and the assessment found that independent economic regulation needed to be extended to some utilities. The provision of safe drinking water in regional and remote communities has also not been achieved.

In addition, improved engagement with Indigenous people and the inclusion of Indigenous values and uses in water planning are required. Some states and territories have progressed, but the NWI does not explicitly address the need to provide water for economic development for Indigenous Australians, and all jurisdictions need to undertake further work in this area. The Productivity Commission (2021) report also stated that more importance should be placed on Indigenous communities controlling and managing their own water resources and rights.

The assessment concluded that the case for continuing reform is strong, given the projections of a drying climate, and more severe and frequent droughts and extreme events, coupled with growing demand. A revised overarching goal is required, with refreshed objectives, to take into consideration the changing climate and Indigenous needs. The proposed revised goal is (Productivity Commission 2020):

To increase the productivity and efficiency of Australia’s water use to service the changing needs of rural, urban and remote communities and to ensure the health of river and groundwater systems and their surrounding landscapes whilst adapting to a changing climate. In continuing to implement this agreement, the Parties also acknowledge the importance of water to the lives of Aboriginal and Torres Strait Islander people.

The NWI renewal was established and progressed following the release of the Productivity Commission issues paper (May 2020) (Productivity Commission 2020) and the follow-up report on national water reform (September 2021) (Productivity Commission 2021). This process included establishment of the Committee on Aboriginal Water Interests to provide advice on appropriate content in this major review of national water reform in Australia. It is anticipated that a draft renewed NWI will be prepared by December 2021, and a final draft will be provided to jurisdictions after the July 2022 National Water Reform Committee meeting. It is anticipated that jurisdiction signatures and an action plan on implementation will be sought by November 2022.

Water Act 2007

The Water Act 2007 (Cth), and its associated Regulations, support the NWI and provide the legislative framework for managing Australia’s largest surface-water resource – the Murray–Darling Basin – in the national interest, as well as for providing information on Australia’s water resources

Under the Act, the Murray–Darling Basin Authority (MDBA) was established as an independent expertise-based statutory agency with responsibilities for planning the Basin’s water resources, with all planning decisions made in the interest of the Basin as a whole.

The MDBA’s statutory functions are to:

• prepare, implement and review an integrated plan for the sustainable use of the Basin’s water resources
• operate the River Murray system and efficiently deliver water to users on behalf of partner governments
• measure, monitor and record the quality and quantity of the Basin’s water resources
• support, encourage and conduct research and investigations about the Basin’s water resources and dependent ecosystems
• advise the Australian Government Minister for Water Resources on the accreditation of state water resource plans
• provide water rights information to facilitate water trading across the Basin
• have regard to Indigenous values and uses and cultural flows
• engage and educate the Australian community about the Basin’s water resources.

The Act also gives the Bureau of Meteorology specific powers and obligations in relation to compiling and disseminating water information, in addition to its weather and climate functions under the Meteorology Act 1955.

The Bureau of Meteorology’s statutory functions include:

• collecting, interpreting and disseminating water information
• conducting regular national water resources assessments
• publishing an annual National Water Account
• providing regular water availability forecasts
• issuing national water information standards
• advising on matters relating to water information
• enhancing understanding of Australia’s water resources.

Progress against statutory functions

Since 2016, the Bureau of Meteorology has continued to meet its statutory responsibilities by publishing monthly updates of rainfall statistics, streamflow status, streamflow salinity and storage volumes; preparing regional information on the state and trends of rainfall, streamflow, groundwater, storage volumes, salinity, water use and major water balance components; and delivering annually a national overview of Australia’s water availability and use in the context of longer-term trends and climate influences.

The number of regions included in the National Water Account has increased to 11 with the addition of the Fitzroy region in Queensland. The 2020 National Water Account (BOM 2021i) is the 11th to be prepared, providing a ‘bank’ of accounts that show how water has been used and managed over the previous 11 years.

The publication of the National Water Account by the Bureau of Meteorology and the Water Account Australia by the Australian Bureau of Statistics was causing confusion among users, although the 2 publications are complementary. The 2 bureaus therefore collaborated to produce an integrated account for the Canberra region for the 4 financial years from 2013–14 to 2016–17 (BOM 2018b). Since 2017–18, the Bureau of Meteorology has prepared the Australian water markets reports. These provide a comprehensive review of water markets across Australia and complement the water markets dashboard, which enables information on water entitlements and allocation trade to be viewed and compared.

Each fortnight since December 2019, the Bureau of Meteorology has prepared an overview of the water currently in storage and the commitments that have been made for this water to different users, including the environment, for 16 catchments covering the whole of the Murray–Darling Basin.

Functional and efficiency review of Commonwealth water functions

The funding provided for water functions was for a period of 10 years, terminating on 30 June 2017. In 2016, a functional and efficiency review of Commonwealth water functions was undertaken to inform decisions about their future funding. The review included the MDBA, the Water Information Services Division of the Bureau of Meteorology, the Water Division within the then Australian Government Department of Agriculture and Water Resources, and the Commonwealth Environmental Water Office.

The review assessed the progress made by each organisation against its statutory responsibilities linked to the Water Act 2007:

• MDBA – develop and review the Basin Plan and functions under the Murray–Darling Basin Agreement to deliver programs set out in the agreement
• Commonwealth Environmental Water Office – manage the Commonwealth environmental water holdings
• Water Division, Department of Agriculture and Water Resources – hold responsibility for water resources policy
• Bureau of Meteorology – provide water information.

The review also analysed alternative delivery models of the responsibilities through contestability and options to improve performance.

The review concluded that each of the 4 organisations played a vital role in supporting the government’s policy agenda around water management and concluded that the new policy proposal submissions put forward by each organisation for continued funding should be approved (EY 2016).

Murray–Darling Basin Plan

The Murray–Darling Basin Plan was established under the Water Act 2007 to ‘rebalance the system and respond to the severe pressures the millennium drought placed on the Basin’s rivers. The Basin Plan is the largest water reform of its kind in the world and aims to achieve a sustainable healthy system for the benefit of all users – the environment, communities, cultural and recreational users as well as irrigated and dryland agriculture’ (MDBA 2020b).

The Basin Plan is being implemented over 12 years (2012–24). Key milestones are:

• 2015 – long-term state environmental water plans published and roll-out of the Aboriginal Cultural Flows Health Indicator
• 2016 – northern Basin review completed
• 2017 – interim evaluation of the Basin Plan and adjustment of sustainable diversion limit determined
• 2019 – initial environmental water recovery completed and review of the Basin environmental watering strategy
• 2020 – report on the effectiveness of the Basin Plan published.

The 2020 Basin Plan evaluation, released in December 2020, found that progress has been made and measurable outcomes have been observed. Limits on water use; improved compliance measurement; and improvements in water metering, monitoring and accounting are now in place and are improving sustainable and adaptive water management.

Flows are now provided by releasing water for the environment. These are restoring the health of rivers and wetlands and helping to mitigate issues such as fish deaths and algal blooms that occurred during the recent drought (see Environmental and cultural flows).

The Basin Plan has contributed to some positive social, economic and cultural change, although this varies across the Basin and is focused on non-Indigenous people. There have been significant variations in this contribution and important differences in the distribution of impacts on communities, ranging from significant negative impacts on some small regional communities to generally positive impacts on most other Basin communities.

Elements of the Basin Plan are yet to be delivered, including:

• sustainable diversion limit adjustment mechanism, which requires a suite of projects to be implemented, some of which will allow Basin Plan environmental outcomes to be achieved with less water
• remaining water resource plans from New South Wales
• a range of projects in the northern Basin to progress to development and delivery on the ground, including licensing and measurement of floodplain harvesting and overland flows
• roll-out of remaining ‘Northern Basin Toolkit’ measures.

There are also gaps in information needs. Greater and more practical information is needed to support water users’ participation in water markets. The 2020 Basin Plan evaluation (MDBA 2020a) recommends that this should be developed in combination with more consistent and coordinated effort by the Basin governments and the MDBA to help water users to work within the new framework. Monitoring programs are being implemented for information collection, but these vary at temporal and spatial scales. Significant data gaps need to be addressed to improve analysis of Basin condition.

Compliance compact

In June 2018, the Murray–Darling Basin Ministerial Council agreed to the Murray–Darling Basin Compliance Compact, following widely publicised criticism of the management of water resources in the Murray–Darling Basin. The compact was developed in response to reviews into the integrity of Basin water management and compliance. It sets out a range of commitments, work programs and timeframes for delivery. The commitments address transparency and accountability, compliance frameworks, metering and measurement, water resource plans, and protection and management of environmental water.

Consistent and timely public reporting is important for transparency, maintaining momentum and meeting compact obligations. As part of new compliance reporting activities, the MDBA reports on progress by Basin governments to implement their compact obligations. The Independent Assurance Committee also reports on the MDBA’s progress with its obligations and compliance program.

Under the compact, all governments have committed to ensuring that new and replacement meters comply with the Australian Standard (AS 4747) for non-urban water meters, and to progressively improve the accuracy and reliability with which water take is measured.

In the 2021 annual compliance compact review (MDBA 2021d), it was reported that:

• market constraints on meter availability and accuracy have been overcome
• in the past 2 years, the number of certified meter installers in New South Wales has increased from 30 to 140
• in New South Wales, all large surface-water pumps have been required to be compliant with the new metering policy from 1 December 2020, and all pumps in the New South Wales northern Basin will be compliant from 1 December 2021
• South Australia and Victoria have continued to improve their metering frameworks by adopting Australian Standard 4747.

Water resource plans in the Murray–Darlin Basin

An integral part of the Murray–Darling Basin Plan is the preparation of water resource plans (WRPs). The Water Act 2007 (Cth) gives responsibility for the preparation of the plans to the Basin states. The plans include water-sharing and management rules that ensure the equitable sharing of water between environmental, cultural and consumptive uses, and the maintenance and improvement of the quality of the water.

The Murray–Darling Basin Plan (2012) requires state WRPs to have regard to Indigenous values and uses, based on identified objectives and outcomes. In states where WRPs have been accredited, they have also been assessed by Indigenous Nations relevant to the plans to ensure that Indigenous objectives and outcomes have been adequately identified. New South Wales is the only Basin state where all WRPs have not yet been accredited.

As part of the Basin Plan, the Basin has been divided into 33 WRP areas, including 14 covering surface water and 14 groundwater (Figure 40).

Under the terms of the Compliance compact (MDBA 2018), the Basin Plan provides that sustainable diversion limits (SDLs) come into effect on 1 July 2019. WRPs are the means through which SDLs are given operational effect. However, in the March 2021 quarterly report (MDBA 2021b), although all 33 WRPs had been submitted by 30 June 2020, only 13 had been accredited (Table 6). Further, as of June 2021 (MDBA 2021c), the WRPs for the Gwydir Alluvium, Gwydir Surface Water, Lachlan Surface Water, Murrumbidgee Surface Water, Namoi Alluvium, Namoi Surface Water, NSW Border Rivers Alluvium, NSW Border Rivers Alluvium, and NSW Murray and Lower Darling Surface Water had all been withdrawn for amendment.

National Groundwater Strategic Framework

The National Groundwater Strategic Framework 2016–26 focuses on 3 priority objectives where action is required to sustain our groundwater resources and enable ongoing access to this increasingly valuable water resource (Figure 41) (Australian state and territory governments 2017a). The 3 objectives are:

• sustainable extraction and optimal use – supporting the value of groundwater, including values of cultural significance to Indigenous Australians, and improving understanding of groundwater resources to support optimal use
• providing investment confidence – providing confidence for investment through risk-based, consistent and efficient regulation of groundwater resources
• planning and managing now for the future – developing integrated water supply planning to improve future water security.

These strategic objectives will be achieved by:

• recognising and supporting groundwater values
• understanding the resource and developing new knowledge
• implementing risk-based approaches to groundwater management and use
• adopting more efficient and effective regulatory processes
• improving access to information for decision-making
• identifying innovative opportunities to use groundwater as part of the integrated water cycle.

The framework states that there are areas of groundwater extraction in Australia that are overallocated, and urgent action is required to reduce licence entitlements, especially given predictions of a drying climate. Reducing overallocated systems is a state and territory responsibility, but it is extremely difficult and unpopular. The Productivity Commission 2021 report has not recommended a clear path to deal with unused and sleeper licences. Redressing of the problem is uneven, and significant work needs to be done for our groundwater use to become sustainable in Australia. Furthermore, enforcing compliance with groundwater licence conditions (notably maximum extraction volume) is unevenly managed across Australia; the low number of cases leads to few prosecutions from the courts, often with small and inadequate penalties for licence breaches. Without a concerted national effort with stricter penalties enforced by the judiciary, there is little incentive for changes in behaviour and for Australians to comply.

One of the actions in the framework was to support implementation of the National Water Knowledge and Research Platform (since defunded) by reviewing it, and liaising with researchers on research priorities and adaption. The Productivity Commission (2021) report stated that, although knowledge and capacity-building needs were identified in the NWI, and the National Water Knowledge and Research Platform identified priority themes in 2012, today, few parties to the NWI have a clear process for identifying and updating water research priorities.