Submission to the Standing Committee on Agriculture and Water Resources: Inquiry into water-use efficiency in Australian agriculture

The issue of water-use efficiency can only be answered by first looking at the reasons why the Australian Government is subsidising the uptake of water-efficient capital and water-efficient practices.The Murray-Darling Basin Plan (the Plan) is designed to rebalance consumptive extractions so that society benefits. To achieve the Plan’s goals a set of water property rights (entitlements) is required to provide physical water resources for environment benefits (e.g. wetland watering events to support bird breeding and fish habitat). Public finances have been used to recover at least 2,750GL (gigalitres) of water rights from farmers, through either the Restoring the Balance (buyback) or Sustainable Rural Water-use Investment Program (SRWUIP) programs. Another quantity of water may also been gained from investing in environmental capital works, but this is outside the scope of the inquiry.The final portfolio of recovered water entitlements will have spatial and reliability characteristics providing environmental, economic, social and cultural benefits throughout the Murray–Darling Basin(Basin). One benefit includes reducing the level of salinity within Basin river systems, which provides irrigators with opportunities to expand their production choices.Assuming the minimum 2,750GL of recovered water rights discussed above, a recent decision to cap buyback water recovery at 1,500GL means that the SRWUIP program must recover the other 1,250 GL. Where that 1,250GL recovery cannot be achieved, and the government are unable to reach their sustainable diversion limit (SDL) objectives, Australia will experience a net reduction in expected national public benefits from tax-payer investments. The Plan may also need to be revised downwards,resulting in net environmental losses for the Basin.